Religious Colleges Get Earnings Test Reprieve

The U.S. Department of Education announced on July 6, 2026, a modification to the "earnings test" for career education programs, offering a reprieve to some religious colleges. This revised accountability measure will impose less severe penalties on programs that do not accept federal student loans, addressing concerns raised by religious institutions about the test's impact. The original "earnings test" was designed to ensure that students graduating from these programs could earn a sufficient income to repay their student debt.

Under the previous framework, programs failing to meet specific earnings thresholds could have faced significant consequences, potentially including loss of eligibility for federal student aid. This posed a particular challenge for religious colleges whose programs might not align with traditional market-driven salary expectations but still provide valuable vocational or ministerial training. The Department of Education's adjustment acknowledges these unique circumstances, aiming to balance accountability with the diverse educational missions of religious institutions.

While this change offers some relief, concerns persist within the higher education sector regarding the broader implications of federal accountability measures on specialized and faith-based programs. The Department of Education stated that the revised approach seeks to provide a more nuanced evaluation, recognizing that not all educational outcomes can be solely measured by post-graduation income. Further discussions are expected regarding the long-term application and refinement of these accountability standards across all types of educational providers.