As part of the budget reconciliation process, Senate Republicans in the Committee on Health, Education, Labor, and Pensions have proposed to hold higher education programs accountable for students’ earnings outcomes. The plan would cut off access to federal student loans for undergraduate degree programs where former students do not earn at least as much as the median working adult with a high school diploma in the same state and for graduate programs where former students do not earn at least as much as the median working adult with a bachelor’s degree. In this brief, I estimate how this policy, if enacted, would affect institutions and students.

Why This Matters

The Senate’s proposed accountability plan is significantly different from the House’s proposal, which involves risk-sharing payments from institutions. Congress will need to decide which plan to advance in reconciliation. Policymakers should think about the incentives each plan puts forth and how they align with their broad goals for higher education quality assurance.

Key Takeaways

In my analysis of how the accountability proposal would affect institutions and students for which we have earnings data, I find the following:

• Twelve percent of associate’s degree borrowers and 1 percent of bachelor’s degree borrowers are enrolled in programs likely to fail the high school earnings test and would therefore lose access to federal student loans.
• Of the 20 largest associate’s degree fields, programs in human development, health and medical administrative services, human services, and teacher education fields would see the highest failure rates.
• Three percent of master’s degree borrowers are enrolled in programs that would fail the earnings test. Just 1 percent of doctoral and professional degree borrowers are enrolled in programs likely to fail.
• Of the 20 largest master’s degree fields, programs in mental and social health services—which often lead to high debt levels relative to earnings—are most likely to fail the earnings test.

How We Did It

I use data from the College Scorecard, the American Community Survey, and the Integrated Postsecondary Education Data System to estimate how the proposed accountability structure would affect institutions and students. Program earnings data in the College Scorecard are for the pooled cohort that completed their program in 2014–15 or in 2015–16, with earnings measured in 2019 and 2020, adjusted to 2021 dollars. I calculate earnings thresholds using the 2017–21 American Community Survey five-year estimates.