In this brief we provide analyses to inform the Trump administration’s approach to the Biden administration’s Gainful Employment (GE) rule. The GE rule, which took effect in 2024, sets debt and earnings requirements for certain higher education institutions participating in federal programs. The first Trump administration repealed the Obama administration’s GE rule, but a shifting policy environment around the value of higher education raises questions about how a second Trump administration might treat the policy.

Why This Matters

The Higher Education Act requires that all nondegree programs offered by public and private nonprofit institutions, and all programs offered at private for-profit institutions, prepare students for “gainful employment in a recognized occupation” to participate in federal aid programs. Under the Biden GE rule, graduates from each program must earn at least as much as workers with only a high school diploma and loan payments must be affordable. Programs that fail these standards lose eligibility for aid starting in 2027.

The Biden GE rule is similar to the Obama-era policy that the first Trump administration repealed, and many of the original arguments against it still apply. But today’s political environment is different, with policymakers more weary of the value proposition of postsecondary credentials. The analysis in this brief offers evidence to inform those views and the Trump administration’s decision to repeal, maintain, or modify the GE rule.

What We Found

• The Biden GE rule will affect public colleges in addition to for-profit institutions, unlike the Obama-era rule, blunting the original criticisms that the rule unfairly targeted only for-profit institutions.
• We estimate 4 percent of undergraduate certificate programs at public institutions (weighted by federal aid recipients) are at risk of failing the rule.
• Most undergraduate certificate programs at public institutions (79 percent, weighted by federal aid recipients) automatically pass the GE rule because they do not enroll enough students to meet minimum reporting size.
• Programs at risk of failing the GE rule tend to produce low earnings for their credential group. For example, earnings among undergraduate certificate programs at risk of failing are typically only $18,360 in 2019 dollars ($22,500 in 2024 dollars), or about $7,000 less than what a worker earns with only a high school diploma.
• Expanding the GE rule to all programs and institutions (“GE for all”) through regulation or legislation would have limited effects on public and private non-profit institutions, partly because many programs will not meet the minimum size requirements and because debt from non-tuition expenses is excluded from the debt-to-earnings calculation.

How We Did It

We use Department of Education data on student debt, earnings outcomes, and projected GE outcomes for all programs that receive federal student aid to estimate which programs are at risk of failing the GE requirements. These data are for the pooled 2014-15 and 2015-16 completer cohort, with earnings measured three years after completion in 2018 and 2019.