In July 2025, the One Big Beautiful Bill Act (OBBBA) introduced a significant policy reform in U.S. higher education. The framework is designed to ensure that students only borrow funds for higher education programs that deliver measurable financial benefits—specifically, higher post-graduation earnings than those of peers who did not pursue the same level of education.
The Education Trust in its September 2025 policy brief, Making the New Higher Education Accountability Framework Pay Off), outlines how the framework broadens accountability across all Title IV–eligible institutions, including community colleges, four-year universities, and graduate schools. The brief outlines program-level earnings thresholds, reporting requirements, and appeals processes, effective July 1, 2026.
The new framework builds on the 2008 reauthorization of the Higher Education Act's long-standing “gainful employment” provision, first established in 1965 and debated through multiple presidential administrations.
The 2025 law shifts the focus from institutional oversight to program-level performance, making earnings outcomes a key determinant of continued access to federal student loans and grants. The framework aims to:
Table on Earnings Threshold Requirements (Effective July 1, 2026)
| Program Type | Who Is Measured | Comparison Group | Requirement |
| Workforce Pell Programs (150–600 clock hours, <15 weeks) | Completers, 3 years later | N/A | Tuition and fees must be less than median earnings minus 150% of poverty level; ≥70% completion and job placement required. |
| Undergraduate Programs (associate & bachelor’s) | Completers, 4 years later, not enrolled further | Median earnings of 25–34-year-olds in the state with only a high school diploma | Must exceed comparison earnings in 2 of 3 consecutive years. |
| Graduate Programs (master’s, doctoral, professional) | Completers, 4 years later, not enrolled further | Median earnings of 25–34-year-olds in the state with a bachelor’s degree | Must exceed comparison earnings in 2 of 3 consecutive years. |
Higher education programs that fail the threshold for two of three consecutive years will lose eligibility for federal loans. Programs failing once must notify current and prospective students of the low-earnings risk. The U.S. Department of Education is required to:
EdTrust’s analysis emphasizes:
EdTrust is a national nonprofit advocacy organization dedicated to closing opportunity gaps in education from preschool through college. The organization produces policy analyses, research, and advocacy tools focused on equity, accountability, and student success.
The Education Trust. (2025, September). Making the New Higher Education Accountability Framework Pay Off. PDF link
The Education Trust. (n.d.). Official website
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