A new federal rule from the Department of Education ties student financial aid to the earnings of college graduates in certain career paths. This could affect students who are enrolled in programs that consistently produce lower earnings post-graduation.
The U.S. Department of Education finalized the rule back in June that will evaluate college programs based on the earnings of students who have graduated and are working in the field. One of the new requirements would put programs through a federal earnings test. If they consistently fail the federal earnings test, they could lose access to federal direct loans.
According to a press release by the secretary of education, Nicholas Kent, the changes come in an effort by the Trump administration to reform higher education and hold universities accountable for lower earning outcomes.
“The Trump administration is hitting a hard reset button on higher education and implementing common sense reforms that will drive down the cost of higher education and hold all institutions, regardless of sector, accountable for low earning income,” the press release said. “If a program cannot show that it leads its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers.”
In the same press release, the Department of Education alleges that 1.7 trillion in federal student loans are defaulting because taxpayers not able to pay. According to the department, this new format will act as a way to keep Americans safe and stop students from taking on debt they cannot handle.
“This new accountability framework is a responsible policy that will safeguard American taxpayer dollars and protect students from taking on an unmanageable debt for program programs that they cannot demonstrate a reasonable return on investment,” the press release said.
This change could affect Wright State, as nearly 70% of all WSU students are awarded some type of financial aid, whether that be through scholarships, federal and state grants, or federal student loans.
According to the National Center for Educational Statistics page that was provided by the university, Wright State sees an average of $11,659,926 in grants a year; $3,544,429 of that is specifically the Pell Grant. Additionally, approximately $3,859,853 of the average student loan aid that is provided to WSU comes from federal student loans.
It is important to know that the new requirement does not automatically mean that students will lose their financial aid eligibility due to their degree. Instead, the federal government evaluates individual college programs based on the earnings for their graduates. The evaluation is focused on the program itself, rather than the student's expected income or major.
Under this new rule, programs that failed to meet the federal earnings standard in two out of three consecutive years will be classified as low-earning programs, thus losing access to federal direct loans for at least two years. This means the rule is more based on a program's eligibility rather than the major entirely.
The reason it is important to distinguish this is that the degrees' average graduate earnings do not necessarily reflect what an individual student can receive with financial aid. Students can still complete the FAFSA and receive financial aid if they qualify under normal requirements. However, if the program they are enrolled in loses eligibility for particular federal programs, the students in the program could have fewer federal financing options.
WSU has already implemented several changes to financial aid as they have had to accommodate the One Big Beautiful Bill and says they will continue to monitor and report these changes to students.
“Wright State University is closely monitoring the implementation of these changes,” Wright State's statement said.
