Trump Administration to Restrict Student Loan Access for Low-Paying Degree Programs

This rule was first proposed in April 2026, finalized in June 2026, and is set to take effect in 2027. The Department of Education will deny loans for programs that do not meet its earnings criteria beginning in the 2028-29 academic year.

Reports of the planned changes gained traction in September 2026, following articles in media outlets like the Los Angeles Times and The New Republic, which highlighted the administration's focus on restricting loans based on degree outcomes. Social media platforms, including Facebook and X, fueled the discussion, with posts claiming that certain fields would lose loan eligibility due to insufficient earnings.

The Department of Education's "earnings accountability" rule ties loan approval to proven financial returns from graduates in various programs. A fact sheet released by the department indicates that programs failing to demonstrate modest financial returns on investment for graduates in two out of three consecutive years would lose eligibility for federal Direct Loans.

A spokesperson for the department confirmed that data would be collected starting in 2027 to evaluate the first cohort of graduates under this new rule, officially known as the "Student Tuition and Transparency System (STATS) and Earnings Accountability" rule.

As The New Republic highlighted on September 27, the Department of Education responded to claims of a ban on degrees, clarifying that it would not allow federal loans for programs with historically low earnings. The department emphasized that federal student loans should not support programs that consistently fail to provide adequate returns on investment.

The finalized rule outlines that programs identified as low-earning will be at risk of losing access to the Direct Loan program. Specific fields anticipated to be most affected include mental health and social work, education, and certain arts programs. These findings suggest many public and non-profit institutions may no longer be exempt from the accountability measures.

The final ruling defines "earnings" based on data from the IRS, which includes wages and various forms of income, ensuring a comprehensive evaluation for affected programs.