New Federal Student Loan Rules Target College Earnings

The U.S. Education Department is set to implement new student loan rules tying federal loan access for schools to the earning power of graduates. Programs that fail to meet earnings criteria could lose eligibility for federal loans and funding, impacting Title IV and Pell Grant eligibility.

The U.S. Education Department announced it is finalizing new federal student loan rules to connect a school's loan access with the earning potential of its graduates. This move is part of the Trump administration's pressure on colleges and universities to ensure accountability.

The new Student Tuition and Transparency System (STATS) will require undergraduate and graduate programs to demonstrate that graduates earn more than those with typical high school diplomas or bachelor's degrees, respectively. Programs failing to prove this financial return for graduates in two of three consecutive years will lose eligibility for the federal Direct Loan program.

Starting 2027, schools will be held accountable. Consistent failure could result in the termination of Title IV and Pell Grant eligibility for low-earning programs. The new regulations come amid broader efforts by the Trump administration to influence university policies on issues like Palestinian protests, transgender inclusion, and climate policy.