Trump Student Loan Rule Could Cut Federal Loans for Degrees Whose Graduates Don't Out-Earn High School Diploma Holders

The Education Department projects that 93 per cent of short salon-training certificates will fall below the pay bar under the new test. (Credit: G. Edward Johnson / CC BY 4.0, cropped)

Students in low-paying courses could lose access to new federal Direct Loans under a federal earnings test that takes effect for most courses on 1 July 2027. The US Department of Education will compare graduates of each course with working adults aged 25 to 34 who have only a high school diploma. The department estimates that 93 per cent of cosmetology certificate programmes subject to the test will fail.

Under current rules, 99 per cent of cosmetology certificate programmes subject to the test would fail, the department says. Drama and theatre degrees face a sharp rise in risk. Programmes that fail the earnings test in two of three consecutive award years lose eligibility for federal Direct Loans for at least two years. Colleges must send in data by Thursday, 1 October.