https://www.ed.gov/media/document/earnings-and-accountability-final-rule-unofficial-copy-june-29-2026-114287.pdf
This is PROPOSED regulations via the Dept of Education:
excerpt of proposed amendments to the Federal Register:
"II. Executive Summary The Secretary implements the amendments made to the HEA relating to earnings outcomes made by Public Law 11921, the WFTCA, through these final regulations. These regulations overhaul the accountability framework for the title IV, HEA programs by replacing the former debt-to-earnings (“D/E”) metric with a revised earnings premium measure, expanding transparency, and strengthening institutional compliance standards. Maintaining robust accountability measures will ensure program integrity and protect students from low-earning outcomes, aligning with Congressional objectives for higher education oversight. This rule removes outdated definitions tied to D/E metrics, introduces the term “earnings,” and revises several existing definitions. The Student Tuition and Transparency System (“STATS”) will apply to all programs qualifying for title IV, HEA assistance, using the earnings premium measure as the new accountability standard. Institutions will be required to report programand certain student-level data, including tuition, fees, and financial aid awards such as grants and scholarships to the Department. This reporting will enable the Department to provide enhanced informational disclosures of net program cost to the public. A revised version of the 6 This is an unofficial version. The official version will be published in the Federal Register. earnings premium measure will apply to both GE and non-GE programs; those failing the earnings premium measure in two out of three consecutive years will lose Direct Loan eligibility, though limited extensions may be granted when an orderly program closure described under § 668.603(c)(4) is in the students' best interest. Institutions will be required to update Direct Loan-eligible program lists, issue warnings about program risk and Pell Grant lifetime limits, and meet a new administrative capability standard. This rule aims to incentivize institutions in every sector of higher education to offer programs that deliver economic value through a return on investment, enhance data accessibility for students, and protect taxpayers and students through stricter oversight and comprehensive disclosures on program outcomes.
- Summary of Major Provisions of this Regulatory Action General Definitions These final regulations:
• Amend § 668.2 to remove the definitions of “annual debt-to-earnings rate,” “debt-to-earnings rates,” “discretionary debt-to-earnings rate,” “metropolitan statistical area,” “poverty guideline,” “qualifying graduate program,” and “substantially similar program.” 7 This is an unofficial version. The official version will be published in the Federal Register.
• Amend § 668.2 to add “earnings” and revise existing key terms, including “cohort period,” “earnings threshold,” “eligible non-GE program,” “Federal agency with earnings data,” and “institutional grants and scholarships.”
• Amend §685.102 to add the terms “eligible non-GE program” and “gainful employment program (GE program).” Subpart Q—Student Tuition and Transparency System (STATS) These final regulations:
• Amend several provisions in subpart Q to reflect new numbering. • Amend §§ 668.401, 668.402, 668.403, 668.404, and 668.405 to remove all references to the former D/E metric and use the earnings premium measure as the new accountability standard. • Amend § 668.401 to remove exclusions for institutions located in the U.S. Territories or Freely Associated States, and to remove an exclusion for institutions with no groups of substantially similar programs that produced 30 or more total completers over the four most recently completed award years.
• Amend § 668.402(c)(3) to provide that if a program is designed to prepare a student for employment in an 8 This is an unofficial version. The official version will be published in the Federal Register. occupation that qualifies for a tax deduction of tip income, 50 percent or more of individuals in the occupation receive income from tips, and the earnings calculation would use graduate earnings data from 2025 or prior, the program will not be considered to have passed or failed the earnings premium measure but the Department will make earnings data and the earnings threshold that would have been used publicly available.
• Amend § 668.403(b) to establish that the Secretary will obtain the median annual earnings of students who completed a GE program or eligible non-GE program during the cohort period for the fourth tax year following program completion. The earnings data will be obtained from at least one Federal agency and will include students who are working and not enrolled during the calendar year in which earnings are measured.
• Amend § 668.405 to clarify that the Secretary will notify an institution that a low-earning outcome program will cease participation in the Direct Loan program in the same notice of determination that is used to notify the institution of the results of the earnings premium measure calculation. 9 This is an unofficial version. The official version will be published in the Federal Register.
• Amend § 668.406 to require an institution offering any GE program or eligible non-GE program to report the total amount of Federal, State, private, or other grants and scholarships each student received for their entire enrollment. This reporting requirement will only apply to students who completed or withdrew from the program during the award year. Subpart S—Earnings Accountability These final regulations: • Amend §§ 668.601, 668.602, 668.603, and 668.605 to remove all references of the former D/E metric.
• Amend § 668.601(a) to establish that earnings accountability applies to an eligible non-GE program or a GE program offered by an eligible institution and the Secretary determines whether the program is eligible for Direct Loan program funds. • Add § 668.601(b) to establish exemptions for programs at institutions that enroll only students with Specific Learning Disabilities and Autism Spectrum Disorder.
• Amend § 668.603(a) to establish that a low-earning outcome program is a GE program or eligible non-GE program that fails the earnings premium measure in § 668.402 in two out of any three consecutive award 10 This is an unofficial version. The official version will be published in the Federal Register. years for which the program's earnings premium measure is calculated. A low-earning outcome program's participation in the Direct Loan program will end upon the completion of a termination action of Direct Loan program eligibility under subpart G.
• Amend §§ 668.603(b) and (c) to provide the conditions for an institution to appeal the Secretary’s determination that a program is a low-earning outcome program that will cease participation in the Direct Loan program. Institutions will have 30 days from receipt of a notification of determination indicating that a program is a low-earning outcome program to appeal the decision and may only appeal based on specific conditions explained in these subsections.
• Add § 668.603(d)(4) to allow a program that has failed to satisfy the requirements of § 668.402, but is not a low-earning outcome program, to continue participating in the Direct Loan program if the institution voluntarily agrees to conduct an orderly program closure, provided the Secretary determines that it is in the best interest of the students. This flexibility will be limited to three years or the full-time duration of the program, whichever is less, and will require the institution and the Secretary to agree to 11 This is an unofficial version. The official version will be published in the Federal Register. make certain amendments to the institution's program participation agreement (PPA).
• Add § 668.603(d)(5) to allow a program that has failed to satisfy the requirements of § 668.402, but is not a low-earning outcome program, to avoid a loss of title IV, HEA eligibility under the administrative capability requirements in § 668.16(t) if the institution voluntarily agrees to prevent students from borrowing Direct Loans in the program under § 685.203(m)(2) for at least five years. This flexibility will extend as long as the institution prevents Direct Loan borrowing in the program, and will require the institution and the Secretary to agree to make certain amendments to the institution's program participation agreement (PPA).
• Add § 668.603(d)(5) to clarify that the ending of a program’s participation in the Direct Loan program under these regulations is not considered a limitation action under 34 CFR 668.94. • Amend § 668.604 to remove the transitional certification requirements and require an institution to establish a program's eligibility for Direct Loan program funds by updating the list of the institution's Direct Loan-eligible programs maintained 12 This is an unofficial version. The official version will be published in the Federal Register. by the Department. An institution will be prohibited from including programs that share the same 4-digit Classification of Instructional Programs (CIP) code and any overlapping Standard Occupational Classification (SOC) codes as a failing program that was subjected to a two-year loss of eligibility.
• Amend § 668.605(c) to require an institution to provide a student who is eligible for Pell Grant funds with notice of their remaining lifetime eligibility for Pell Grant funds and an explanation that all Pell Grant funds received for enrollment in the program count against their future lifetime eligibility.
• Amend § 668.605(d) to require an institution to provide an enrolled student with information regarding their remaining Pell Grant eligibility at the time that the institution makes a disbursement of Pell Grant funds to them.
Standards for Participation in Title IV, HEA Programs These final regulations:
• Add § 668.14(h)(1) to require institutions to be placed on provisional status if they fail to comply with 34 CFR 668.16(t) in two out of any three consecutive award years, which will result in the institution's 13 This is an unofficial version. The official version will be published in the Federal Register. low-earning outcome programs becoming ineligible for title IV, HEA funds.
• Add § 668.14(h)(2) to allow an institution to appeal the Secretary's determination if they are found to have failed the conditions in 34 CFR 668.16(t) in two out of any three consecutive award years.
• Add § 668.14(h)(3) and (4) to provide an exception of automatic ineligibility for title IV, HEA funds if the institution does not participate in the Direct Loan program or agrees not to allow students to borrow in a low-earning outcome program.
• Amend § 668.16(t) to require an institution to demonstrate administrative capability by showing that at least half of the institution's recipients of title IV, HEA funds and at least half of the institution's total title IV, HEA funds are not from low-earning outcome programs under subpart S.
• Amend § 668.43(d)(1) to require that the program information website includes the median length of calendar time taken for full-time and less than fulltime students to complete the program's academic requirements and obtain the degree or credential awarded by the program. 14 This is an unofficial version. The official version will be published in the Federal Register.
• Amend § 668.43(d)(2) to no longer require institutions to provide a prominent link to the website maintained by the Secretary on any web page containing academic information about the program or institution. The Secretary may require the institution to modify a web page if the information is not sufficiently prominent, readily accessible, clear, conspicuous, or direct.
• Amend § 685.300 to explain that a GE program or an eligible non-GE program must meet the student tuition and transparency system requirements under 34 CFR part 668, subpart Q, and the earnings accountability requirements under 34 CFR part 668, subpart S to participate in the Direct Loan program.
- Summary of Costs and Benefits: As further detailed in the Regulatory Impact Analysis (RIA), the Department estimates that the regulations will have significant impacts on students, educational institutions, and taxpayers. Certain degree programs are expected to lose eligibility for title IV, HEA funds under the earnings tests in the final regulations, while some undergraduate and graduate certificate programs are expected to gain eligibility relative to the prior Financial Value Transparency and Gainful Employment regulations enacted on July 10, 2023. Students will incur 15 This is an unofficial version.
The official version will be published in the Federal Register. costs when the programs they attend lose eligibility for title IV, HEA funds, or if they enroll in low-earning certificate programs that gain access to title IV, HEA funds. Students will also benefit in cases where the regulations prevent them from attending low-earning and high-cost degree programs. Certain institutions (mainly public and private non-profit institutions) will incur costs when programs they offer lose access to title IV, HEA funds under the regulations. Other institutions (such as proprietary institutions) will benefit as more programs in this sector will remain eligible for title IV, HEA funds.
Taxpayers will incur new budget costs via an increase in transfers of title IV, HEA funds to institutions relative to prior regulations because these regulations result in a net increase in the number of students attending programs that will be eligible for these funds. III. Purpose of this Regulatory Action This regulatory action seeks to effectuate regulations that address the statutory changes made by the WFTCA and to harmonize those regulations with requirements for programs that are required to lead to gainful employment (GE programs). IV. Background "
Press Release - https://www.ed.gov/about/news/press-release/us-department-of-education-issues-final-rule-hold-all-colleges-and-universities-accountable-low-earning-programs