How ED’s Final Accountability and Transparency Rule Will Help Students, and Where It Falls Short

Yesterday, the U.S. Department of Education (ED) issued its final rule under the new higher education transparency and accountability framework. The regulations implement the “Do No Harm” earnings standard from the One Big Beautiful Bill Act (OBBBA) and transparency provisions that will provide students with new information about program costs and outcomes. 

While this final rule takes an important step toward ensuring that higher education provides strong outcomes to all students, it still falls short in several important ways—weakened student protections and fewer institutional requirements to report student loan borrowing levels.  

How the final rule helps students

The final regulations create important incentives for institutions to ensure programs leave students better off by tying federal student loan eligibility to a minimum standard for program graduates’ outcomes. The regulations will hold programs accountable to an earnings premium test to assess if students are, on average, better or worse off after attending a program. For undergraduate programs, the median earnings of completers will be compared to the median earnings of high school graduates. For graduate programs, the median earnings of completers will be compared to the median earnings of bachelor’s degree recipients. If a program fails the earnings premium test for two years in a three-year period, it will lose eligibility to offer federal loans to its students.

Importantly, these final regulations apply the earnings premium test to all programs, including undergraduate certificate programs, which pose the greatest risks to students. ED estimates that 27.6 percent of undergraduate certificate students are enrolled in programs that would fail the earnings premium metric, compared to 3.9 percent of associate degree students and 0.6 percent of bachelor’s degree students. The regulations also limit the appeals process to calculation errors, ensuring that program outcomes are measured using data from the Internal Revenue Service, which is the most accurate source of earnings information.

Additionally, the final rule maintains the Student Tuition and Transparency System (STATS), a major recommendation of IHEP’s Postsecondary Data Collaborative (PostsecData) coalition supported by nearly 30 partners. The STATS framework includes crucial transparency provisions that will help ensure that students have the information they need to select a postsecondary pathway that best fits their goals. Students need access to clear, comparable, and comprehensive program-level information, especially as costs and outcomes can vary substantially across programs and institutions.

STATS will provide program-level data on costs, student debt, earnings, and other metrics, enabling insights that are unavailable through existing ED data sources, such as the College Scorecard and the Integrated Postsecondary Education Data System. Notably, ED will be required to calculate a new program-level measure on time to completion, which fills a major gap in publicly available data about how long students take to finish their credentials. With these data, students, policymakers, and institutions will have a better understanding of program costs and outcomes nationwide.

How the final rule falls short

Despite the important accountability and transparency components, the final rule falls short in three ways.

First, ED’s latest changes weaken the accountability framework and its protections for students. This includes delaying consequences for programs that fail the earnings test if they are associated with occupations where most workers report tipped income. ED also declined to adopt our recommendation to reinstate a tougher penalty for Gainful Employment (GE) programs that fail the earnings premium test. Under the 2023 GE regulations, failing programs lost access to all Title IV aid, including federal Pell Grants and Direct Loans. The final rule’s “administrative capability” provisions would cut off Title IV eligibility from low-earning programs at colleges with widespread low performance on the earnings premium test. But ED added new exceptions that weaken this safeguard. This means students will risk spending their limited Pell Grants on programs that consistently leave students worse off.

Second, the final rule removes a requirement for institutions to report the cumulative loan debt their students owe them. The Financial Value Transparency framework, the precursor to STATS, included this requirement. Without these data, policymakers, researchers, and students cannot accurately assess the true cost of enrolling in a program.

Finally, the rule fails to strengthen student warnings. Institutions must notify current and prospective students when a program is at risk of losing Direct Loan or all Title IV eligibility and ensure that students acknowledge those warnings before they receive federal grants or loans. Our PostsecData coalition recommended requiring students in programs that fail the earnings test to actively acknowledge that their programs may become ineligible for Direct Loans and requiring both ED and institutions to administer and collect student acknowledgments. Though the final rule does not include those recommendations, we urge ED to regularly review institutions’ documentation of these acknowledgments, to ensure students receive warnings when they make real-time decisions about where to enroll.

What comes next for the final rule

Institutions will be required to submit data for the earnings premium calculation and the STATS framework by October 1, 2026 and will have an opportunity to review lists of their program completers. ED will calculate the first earnings test in early 2027. Programs that fail the test in both 2027 and 2028 will be designated as “low-earning” beginning in the 2028-2029 academic year and will lose access to the Direct Loan program.  

As implementation begins, we urge the Department to provide clear guidance and robust technical assistance to institutions via a dedicated help desk throughout the reporting process. We also urge ED to integrate program-level metrics from STATS into the College Scorecard to create a one-stop resource about costs and outcomes for prospective and enrolled students. Our PostsecData coalition recommended that ED implement this integration, and notably in the final rule, the agency stated it would consider future implementation. Finally, to enhance outcomes transparency, we encourage ED to publish the program-level data that colleges have already reported as part of the FVT framework.  

The final rule marks real progress toward a system that holds college programs accountable for their students’ outcomes and gives students the information they need to choose wisely. We will monitor the implementation of these provisions and identify opportunities to strengthen policies so that every student can count on a postsecondary path that leaves them better off.