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.
EdTrust's analysis suggests the framework could disproportionately affect programs in health and education fields — areas facing workforce shortages but offering lower wages relative to educational requirements. While the law attempts to mitigate impacts at the master's level by allowing field-specific comparisons, similar protections don't exist for associate degree programs in these fields.
The brief recommends several improvements, including extending accountability to all Title IV-eligible programs, adding debt-to-earnings metrics, restricting Pell Grant access for failing programs, and implementing safeguards for socially valuable but lower-wage career paths.
The accountability framework represents the only provision EdTrust views favorably in legislation it has otherwise characterized as "The Great American Heist." The law eliminates Grad PLUS loans, caps graduate borrowing, changes income-driven repayment plans, and delays fraud protections for students — changes EdTrust argues will limit access and resources for low- and middle-income students.
The legislation adds an estimated $3.3 trillion to the national debt over 10 years while making cuts to Medicaid and SNAP benefits. EdTrust describes it as "a massive upward transfer of wealth" that "erodes the safety net for millions of people while including large tax cuts for big corporations and the wealthiest Americans."
EdTrust raises concerns about the federal government's capacity to implement the new framework given widespread staffing reductions at key agencies including Federal Student Aid and the Institute of Education Sciences. The brief notes that significant program-level data is missing from the College Scorecard and many federal data collections have been defunded or suspended.
"College remains a worthwhile investment for the average student, and graduate degrees can lead to higher earnings, but the U.S. is facing a college affordability crisis that calls for more scrutiny," the brief states. "If policymakers truly want to increase transparency for students and decrease waste of taxpayer dollars, students should be able to compare all their options and know which programs are more likely to pay off, not rip them off."
With more than 40 million individuals carrying debt without degrees and millions more unable to repay loans, EdTrust argues the stakes are too high to implement an incomplete accountability system. The organization calls on policymakers to strengthen protections before the July 2026 effective date.
