By Kritika Agarwal
Last week, AAU submitted a comment letter in response to a proposal from the Department of Education to implement a new earnings test to measure the return on investment of college degree programs. AAU argued that the new rules place too much emphasis on literal monetary returns on certain kinds of degree programs, while undervaluing their worth to society.
AAU’s letter noted that, in judging programs solely by how much money graduates earn in the initial years following graduation, the department's proposal overlooks other ways in which graduates achieve success over their lifetime or contribute to the public good. Further, AAU said, the proposal unfairly holds colleges and universities responsible for things they cannot control, such as the strength of the job market or the lower typical earnings in vital fields such as social work, education, and the arts.
The “Accountability in Higher Education and Access Through Demand-Driven Workforce Pell” rule, once implemented, will require undergraduate programs currently eligible for federal student aid funds to show that their graduates are earning more than individuals with high school diplomas. The rule would also require graduate and professional programs to show that their graduates are earning more than graduates of bachelor’s degree programs.
The department will cut access to federal student loans for programs that fail to meet specified earnings thresholds for two out of three consecutive years. If those failing programs account for at least half of an institution’s Title IV students or funds, they could also lose access to other federal student aid (such as Pell Grant funds). The department intends to implement the rule starting July 1, 2026.
AAU noted in its comment letter that, while it strongly supports “rigorous accountability in higher education,” the proposed rule would reduce choice for students – and especially those students wishing to pursue careers that serve the public good.
For example, AAU noted that the proposal would apply an “earnings premium framework” to programs, such as arts education, where salaries are not often the best benchmarks for measuring career success. “In the trajectory of an arts career, it may take a decade or more before careers develop and stabilize – a reflection of the nature of the arts industry and not the fault of academic programs,” the letter noted, adding: “Consider how rare it is that an arts or conservatory program graduate is immediately hired to be a principal soloist in a major orchestra or dance company or a leading actor in a Broadway play.”
Similarly, AAU argued, the proposal also does not take into consideration the many variables that are outside higher education institutions’ control but that nevertheless affect earnings outcomes. “Those variables include localized economic challenges, public service roles where the salary is allocated by the state legislatures and local policymakers, and systemic pay inequality,” the letter said. For example, AAU noted, “By losing access to Direct Loans, programs that produce public servants who are critical to society – such as education and social work – will be forced to close.”
The net effect of the proposal, AAU argued, would be to “prevent students from lower and middle-income backgrounds from making their own decisions about their education and professional futures; instead, the government will have decided for these students.”
AAU also raised concerns about the July 1 implementation date and noted that it fails to provide sufficient time for universities to facilitate compliance with the new rules and for students to make informed decisions about their education.
AAU asked the department to address these concerns before finalizing the proposal and urged it to continue engaging with stakeholders as part of its efforts to improve transparency and accountability in higher education.
“AAU and its member universities support rigorous accountability in higher education. But accountability measures must be accurate, contextually sensitive, and legally grounded,” the letter concluded.
Kritika Agarwal is assistant vice president for communications at AAU.