Dive Brief:
- More than 1,900 colleges either haven’t reported or have underreported the data required by two Biden-era rules, financial value transparency and gainful employment, according to a Tuesday notice from the U.S. Department of Education.
- The Biden administration released those regulations in 2023 in a bid to provide consumers with more information about colleges and to crack down on career education programs that left students worse off financially. The Trump administration is replacing those regulations with its own rule meant to ensure college graduates get an earnings bump from their education.
- However, colleges are still required to submit the first two rounds of data under the Biden-era regulations. The Education Department said Tuesday that it would give colleges until Jan. 15 to submit the data — or else risk fines and other potential sanctions.
Dive Insight:
In late June, the Education Department released a new rule that intends to ensure that college programs boost their graduates' earnings. The rule is meant to carry out one of the higher education provisions in the sweeping tax and spending bill enacted last year known as the One Big Beautiful Bill Act.
For bachelor’s programs, the rule requires them to show that at least half of their graduates earn more than a typical worker in the same state with only a high school degree. Graduate programs face a similar test, though their graduates are compared against workers whose highest level of education is a bachelor’s degree.
Programs that fail the test in two out of three consecutive years lose eligibility for federal student loans under the rule. Colleges could also lose access to Pell Grants in some cases, such as if more than half of their students who receive federal financial aid are enrolled in programs that fail the test.
The Trump administration rule doesn’t replace the Biden-era regulations until mid-2027. As such, colleges must still report the first two years of data required under the Biden-era regulations, which were due last fall. The deadline for data reporting has been pushed back several times amid concerns that colleges didn’t have enough time or guidance to meet the new requirements, but the Education Department said Tuesday it wouldn’t provide any further extensions.
The third — and final — year of data required by the Biden-era regulations is due Oct. 1, according to the Tuesday notice. However, colleges can skip submitting data no longer required under the Trump administration’s rule if they decide to implement it early.
The Education Department plans to post data from its new rule and the Biden-era rules beginning in 2027.
Some Democratic lawmakers and policymakers have sounded the alarm about the Trump administration’s regulations, arguing that they are weaker than the Biden-era gainful employment rule.
The gainful employment rule shares a similar earnings test with the Trump administration’s new regulations. It requires career education programs to show that at least half of their graduates make more than workers with only high school diplomas. However, it goes further by also requiring programs to pass a debt-to-earnings measure, which is intended to ensure programs don’t saddle graduates with unmanageable student loan debt.
The Biden-era rule threatened to strip federal student aid access — both loans and Pell Grants — from programs that failed the requirements in two out of three consecutive years.
Meanwhile, the financial value transparency rule created new reporting requirements for all colleges, including information about program costs and loan burdens. While the rule didn’t come with penalties, the Biden administration said it would post the data on a consumer-facing website.
