Thousands of college programs in low-wage fields could lose access to federal financial aid in the next few years under rules finalized by the Trump administration this week.
The Education Department approved new rules on Monday that say undergraduate programs must demonstrate that their graduates earn higher salaries than people in their state who have a high school diploma to qualify for aid. And graduate programs must show their alumni earn more than people with a bachelor’s degree in similar fields.
The agency rejected most of the major changes pushed by higher education lobbyists who warned the new regulations could have a devastating impact on programs where graduates typically have low salaries, including many Bible colleges, beauty schools, and programs in music and the performing arts.
Under the rules, college programs could lose access to federal loans if they flunk the earnings test in two out of three years. And if the program flunks the test for three years, they could also lose access to Pell Grants.
“If a program cannot show that it leaves its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers,” Undersecretary of Education Nicholas Kent said in a statement.
After receiving nearly 10,000 public comments, the Trump administration declined to make some of the major changes suggested in the comments, such as exempting religious studies or significantly altering the formula used to calculate earnings benchmarks that programs must meet to qualify for financial aid.
The new regulations are an outgrowth of controversial “gainful employment” rules promulgated by the Obama and Biden administrations to cut off aid for low-performing programs.Those efforts faced challenges from opponents who argued key parts of the rules were never approved by Congress. By contrast, the latest regulations are based on language in the One Big Beautiful Bill passed in 2025.
Rep. Tim Walberg (R-Michigan), chair of the House Education and Workforce Committee, praised the new regulations as “one of the most significant higher education accountability reforms in a generation.”
“For too long, taxpayer dollars flowed to programs that left too many students worse off financially than if they had never enrolled in the first place,” he said in a statement.
Jon Fansmith, a senior vice president at the American Council on Education, which represents nearly 1,600 colleges and other related groups, said there wasn’t enough attention on how the rules will impact colleges.
“There will be some negative unintended consequences on programs that are critically important to this country in ways that we don’t fully understand,” he said. Fansmith said parts of the rules will go into effect on July 1 and parts will go into effect a year from now. He said the earliest that programs could lose access to financial loans is the summer and fall of 2028. They could then potentially lose access to Pell Grants and some additional forms of financial aid beginning in 2029.
The concept behind the rules has won bipartisan support from some conservatives concerned about the use of taxpayer money and liberals worried that some programs saddle students with student debt they can’t afford to pay back. But the draft regulations drew significant opposition from college leaders worried they could cripple programs that serve people with lower incomes.
The administration did make a few notable changes in response to concerns.
For instance, the Education Department agreed to delay penalizing schools in fields that rely on tips so it could use data beginning with 2026, when the federal government stopped taxing many workers’ tips.
Jason Altmire, CEO of Career Education Colleges and Universities, which represents many for-profit career schools, praised the delay and the fact that the regulation does not single out for-profit schools for extra scrutiny.
“We are pleased that, for the first time, all institutions of higher education will be held accountable to the same standards,” Altmire said. But he added: “We remain concerned that the new earnings formula fails to address important factors affecting wages, such as part-time work, gender pay disparities and regional income variations.”
The final regulations also exempt programs that exclusively serve students with documented disabilities.
Education Department officials estimated the new rules could affect roughly 5 percent of college programs, with hundreds of thousands of students nationwide.
The government estimated the proposed regulations could cut off financial aid to 89 percent of religion and religious studies master’s degree programs and a majority of bachelor’s programs for religion and religious studies.
Beauty schools would also be hit especially hard. The government found that 100 percent of associate programs and nearly 93 percent of certificate programs in cosmetology and related personal grooming services would probably fail to meet the new earnings requirement, based on early data.
The Trump administration found the rules could also affect many master’s programs in low-wage fields, including film/video and photographic arts, visual and performing arts, and music, including some at elite universities.
Danielle Douglas-Gabriel contributed to this report.
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