Two federal consumer protection safeguards against unaffordable debt or insufficient earnings for postsecondary students took effect July 1, 2024. The Federal Financial Value Transparency Regulations, along with a revamped set of gainful-employment rules require that by the beginning of 2026, students will have to acknowledge having read information about the debt burden associated with a certificate or graduate program before enrolling. The aim of these regulations is to ensure that postsecondary education remains an engine for equal opportunity, upward mobility, and global competitiveness.

The Financial Value Transparency (FVT) Framework will give students in all programs detailed information about the net costs of postsecondary programs, and the financial outcomes they can expect. It will help prospective students understand the potential risks involved in their program choices by requiring them to acknowledge viewing this information before enrolling in certificate or graduate programs whose graduates have been determined to face unaffordable debt levels.  The framework estimates acknowledgments for an estimated 400 graduate programs that enroll about 120,000 students. The framework applies to all programs in all sectors but doesn’t affect financial-aid eligibility.  The Department of Education will post every program’s results on a pair of debt-to-earnings tests which compare graduates’ annual income as well as their discretionary income. If a program’s rates fail, incoming students will need to sign a disclosure before enrolling, acknowledging they’re aware of their prospective return. This new accountability mechanism will remain in play until the program’s rates return to a passing level, or if three years pass since the program was last notified of a failing score, whichever comes first.

The Gainful Employment Program Accountability Framework (Gainful Employment - GE) rule will protect approximately 700,000 students a year from career training programs that leave graduates with unaffordable loan payments or earnings no better than what someone who did not pursue postsecondary education earns in their state. Under the rule, the Department assesses whether programs offered by private for-profit institutions and certificate programs at all types of colleges meet the statutory requirement to prepare students for gainful employment in a recognized occupation using two separate measures:

• Share of annual earnings typical graduates need to devote to paying their debt (i.e., “debt-to-earnings ratio”) must be less than or equal to 8% or less than or equal to 20% of their discretionary earnings (defined as annual earnings minus 150% of federal poverty guideline). This metric captures whether a program’s debt is affordable.
• At least half of graduates have higher earnings than a typical high school graduate in their state’s labor force who never enrolled in postsecondary education. This "earnings premium" assesses whether the program enhances its students’ earnings potential.