Hello there, Reader-
For decades, we’ve told students: college pays off.
But now, Washington wants proof.
Starting in July 2026, every degree and certificate program that receives federal aid will face a new test: Did your graduates earn more than people without your credential?
If not, the program risks losing access to federal financial aid.
That’s the core of the new Earnings Rule, part of the One Big Beautiful Bill, and it’s about to redefine how higher education is judged.
On paper, it’s a compliance measure. In practice, it’s a value test for every campus, from community colleges to Ph.D. programs.
This newsletter edition takes a recent LinkedIn article I wrote on this topic and expands it.
What the rule says
The Department of Education will use IRS and Social Security wage data to evaluate programs four years after completion, focusing on what students actually earn once they’re in the workforce.
Each program’s median graduate earnings will be compared to a benchmark group:
- Certificate, associate, and bachelor’s programs must show graduates earn more than 25–34-year-olds with only a high school diploma.
- Graduate programs must show graduates earn more than bachelor’s-degree holders in the same field.
To remain eligible for federal loans, a program must meet its benchmark two out of every three years.
And here’s the part many leaders haven’t yet absorbed:
👉 If a program fails once, the institution must notify current and prospective students that the program is “at risk” of losing federal aid eligibility.
That means front-page visibility in marketing materials, websites, and financial-aid disclosures. Long before any sanction hits, the signal will be public.
👉 If the program fails a second time within three years, it loses access to federal aid entirely.
Where the data comes from
This isn’t data your institution collects.
The Department of Education will generate its own completer lists every year for each program receiving Title IV aid, then link them to IRS and Social Security Administration (SSA) wage records.
That means the earnings numbers are:
- Actual wage data from federal tax records, not self-reported.
- Matched to individual students based on Social Security numbers tied to financial-aid records.
- Limited to graduates who are working and not enrolled elsewhere. Students who transfer or continue their education aren’t counted until they’ve fully exited higher ed.
The comparison group, the wage “benchmark,” comes from the American Community Survey (ACS), using Census data for 25- to 34-year-olds.
- For associate and undergraduate programs, the benchmark is median earnings of people with only a high school diploma.
- For graduate programs, it's the median earnings of bachelor’s-degree holders in the same field.
- If more than half of your graduates work outside your state, a national median is used instead of the state-level figure.
In other words, this is federal-level matching and comparison, completely separate from your First Destination Survey (FDS), alumni outcomes tracking, or any institutional reporting.
You can’t change the dataset.
But you can influence the outcomes it reflects through stronger employer partnerships, more intentional internships, and higher completion rates that lead to upward wage mobility.
The timeline and the uncertainty
The rule is set to take effect July 1, 2026, but there’s growing concern about whether the Department of Education can fully implement it on schedule.
After significant staffing cuts (and further reductions likely due to the current government funding crisis), DOE may struggle to manage the complex data matching, verification, and appeals this rule requires.
A delay or phased rollout wouldn’t be surprising. But even if the timeline shifts, the direction is clear: federal accountability for graduate earnings is coming.
Now is the moment to prepare, not pause.
Why this matters
This rule changes the conversation across every kind of campus.
At community colleges, the risk is immediate.
If a program loses financial aid eligibility, many students won’t be able to enroll. That shrinks access, cuts revenue, and jeopardizes the very programs that drive economic mobility: early childhood education, human services, and trades.
At four-year institutions, the challenge is uneven performance across majors. Computer science and nursing may soar past benchmarks, while English or sociology may lag despite strong long-term outcomes. Early-career wages, measured just four years out, can paint an incomplete picture, but that’s the window that counts.
At the graduate level, the bar is higher. Programs must show their graduates out-earn bachelor’s holders in the same field. That’s a steep climb for degrees in education, social work, and the arts, disciplines vital to communities but undervalued in the labor market.
The question isn’t just Did they get jobs?
It’s Did their degree move them forward economically?
And the levers that shape that answer: internships, employer pipelines, persistence, and early career advancement, all sit squarely in career services’ lane.
What career services leaders can do now
This rule pushes higher education to measure what career services has always cared about: outcomes, equity, and economic mobility, even if earnings itself is a troublesome measure.
Here’s where to start — and how to lead through these changes:
1️⃣ Get access to the data
Meet with your institutional research or effectiveness office now. Request access to program-level outcomes data and understand how wage benchmarks will be calculated.
Frame the ask not as curiosity but as risk mitigation and strategy.
When senior leaders realize these data determine funding and reputation, they’ll make room for you.
2️⃣ Map exposure across programs
Once you understand the data, identify which programs may be most vulnerable and why.
- Some will struggle due to market wages in their fields.
- Others will struggle due to completion gaps or limited employer connections.
Create a simple triage model:
- Green: Meeting benchmarks; potential exemplars.
- Yellow: Borderline; need strategic investment.
- Red: At risk; require coordinated intervention.
This shows leadership where to focus attention and demonstrates that you’re thinking institutionally.
3️⃣ Build cross-campus partnerships
Form small working groups around high-risk programs that include department chairs, deans, IR staff, and employer-relations partners.
Use these groups to design targeted, evidence-based interventions: embedded internships, advisory boards, or major-to-career mapping.
Career services doesn’t have to own every solution, but you can convene the right people to find them.
4️⃣ Engage employers as co-investors
Employers need to understand that their wage structures now shape program survival.
Host industry roundtables where you present local and regional wage data and invite discussion about career ladders, paid internships, and sustainable entry-level wages.
The message: if your pay is too low, your pipeline may disappear.
5️⃣ Strengthen completion and early career progression
Because the federal calculation counts only completers, and looks at earnings four years after, persistence and early progression matter more than ever.
Every completer who advances strengthens your institutional metrics and your mission.
6️⃣ Lead the communication strategy
Inform your campus community about this new law. They may not be aware of it.
When the first “at-risk” notices start going out, presidents will need clear talking points. Prepare them. Craft short briefings that explain:
- What the rule means.
- Which programs are affected.
- What the institution is doing to respond.
If you’re the person helping leadership communicate clearly, you move from being a service provider to a strategic advisor.
Final thought
This isn’t the time to wait for directives. 👀
🎯 Career services is uniquely positioned to lead the response, connecting the dots among academic programs, employers, and student success.
The question is no longer “Why should career services have a seat at the table?”
It’s “How soon can you get there?”
Things you might want to read
P.S. I just presented on this topic to the Maryland Community College Career Alliance. Is this a topic that would resonate with your audience? Let's talk.
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