Roxanne Garza
The One Big Beautiful Bill Act, signed into law by President Donald J. Trump on July 4, 2025, includes what EdTrust calls "one silver lining": a new accountability framework designed to ensure postsecondary programs deliver adequate earnings to justify student borrowing. But the organization warns that the framework contains critical gaps that could allow predatory programs to continue operating with federal funding.
"Students are being asked to take on more debt than ever, often for programs that don't deliver the economic outcomes they were promised," said Roxanne Garza, director of higher education policy at EdTrust and author of the brief. "This law promises to hold programs accountable and provide transparency for students, but without more robust protections, it risks leaving the students who need support the most behind."
The new framework, effective July 1, 2026, establishes earnings thresholds for most postsecondary programs receiving federal student aid. Programs that fail to meet earnings benchmarks for two out of three consecutive years will lose access to federal loans — but not Pell Grants, which EdTrust identifies as a major loophole.
Under the law, undergraduate programs must produce graduates earning more than typical high school diploma holders in their state, while graduate programs must exceed bachelor's degree holder earnings. The framework measures completers four years after graduation who are working and not enrolled in further education.
However, the policy brief identifies several concerning omissions. Most notably, undergraduate certificate programs — where enrollment is rising and outcomes vary widely — are excluded from the framework. According to analysis by the Postsecondary Education & Economics Research Center cited in the brief, approximately one in five students enrolled in certificate programs would fail the earnings test, compared to just 2% in associate degree programs.
The framework also lacks debt-to-earnings metrics, meaning high-cost programs could pass earnings tests while leaving students with unaffordable debt. PEER analysis estimates over 600 programs enrolling more than 350,000 students and distributing over $3 billion in loans would pass earnings tests despite leaving students with unmanageable debt burdens.
