Colleges May Lose Loan Access Under New Metric in 2028

Colleges that fail to meet new federal accountability standards related to student earnings could lose access to federal student loan programs as early as 2028. The U.S. Department of Education is implementing a new metric that will assess the earnings of students who complete specific programs. Data from this earnings test is scheduled for release in 2027, allowing institutions to identify potential issues and take corrective actions before penalties are imposed.

Programs failing to meet the new standards will be flagged, and institutions with multiple failing programs will face consequences. These consequences could include the loss of eligibility for federal student aid, a critical funding source for many institutions and students. The timeline indicates that the first cohort of data will be collected and analyzed, with results published in 2027. Institutions will then have a year to improve their outcomes before sanctions are applied in 2028.

However, some programs have been granted an extension, a move that student advocates criticize as potentially harmful. These advocates argue that such extensions delay necessary reforms and allow underperforming programs to continue receiving federal funding, potentially trapping students in programs that do not lead to adequate employment and earning potential. The specific criteria for these extensions and the number of programs affected are not detailed, but the concern is that it could create a disparity in accountability.

The new accountability metric is part of a broader effort by the Department of Education to ensure that federal student aid is supporting programs that provide students with valuable skills and lead to gainful employment. This initiative aims to protect students from predatory institutions and programs that leave them with significant debt and limited career prospects. The focus on post-graduation earnings is intended to provide a clear, data-driven measure of program success.