Snapshot · The Daily
Undergraduate programs must show alumni earning more than same-state high school graduates aged 25–34, measured 4 years after graduation, or risk losing federal loan eligibility.
Where this was said
At 11:37 · chapter starts 9:30
The second plank of the new policy is an earnings test tied directly to outcomes. For undergraduate programs, alumni must earn more on average than same-state high school graduates aged 25–34, measured 4 years after graduation. Graduate programs face a parallel test: alumni must out-earn the median salary for bachelor's degree holders in the same age group. If a program fails this test in 2 out of 3 consecutive years, it loses access to federal student loans entirely — meaning students who want to enroll must find funding elsewhere. Ron Lieber, who has analyzed a dataset of more than 30,000 undergraduate majors, says religion degrees and fine arts programs at many schools are likely to fail. But he emphasizes that no consequences will materialize for at least 3 years, because of the rolling 2-of-3 structure. The underlying logic is blunt: if a degree doesn't put you ahead of a high school diploma in the labor market, what exactly has the federal government been subsidizing? [1] — Ron Lieber "Federal loans will be cut off from undergraduate programs whose graduates don't out-earn same-state high school graduates, measured 4 years…" 10:37
The Trump administration's new rules specifically call out NYU and USC — two schools in major blue cities — in the official Education Department fact sheet. Ron Lieber calls it '23% political,' but notes there has been genuine bipartisan frustration with the student loan system for years.
Federal loans will be cut off from undergraduate programs whose graduates don't out-earn same-state high school graduates, measured 4 years after graduation. Fail in 2 out of 3 years and the program is shut out of the federal loan system — potentially killing low-ROI degrees like religion and fine arts.
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