A visual guide to the STATS Earnings Accountability rule that measures whether college programs deliver economic value to their graduates.
How much do graduates earn 4 years after leaving?
This is the median earnings across all testable programs, measured 4 years after graduates leave school. It comes from IRS tax records linked to federal student aid records. Graduates with zero earnings — those who are unemployed, self-employed without W-2 wages, or out of the labor force — are excluded. This makes the number more favorable to programs than if non-earners were counted.
The earnings test doesn't compare programs to an arbitrary number. It asks: do graduates earn more than people with less education? The specific benchmark depends on two things: the degree level and where students come from.
Select an example to see how different programs compare against their benchmark.
The consequences are graduated, not immediate. A single year of failure does not result in loss of funding. The earliest any program can lose Direct Loan eligibility is Academic Year 2028-29.
The Department publishes results. The institution must send a written warning to all current and prospective students, notify Pell recipients of remaining lifetime eligibility, and wait 3 business days after delivering the warning before allowing a prospective student to enroll.
The institution then has 120 days to choose one of three paths:
Block students in the failing program from borrowing federal Direct Loans for at least 5 years. In exchange, the program is shielded from institution-level sanctions while students can still receive Pell Grants. Preserves Pell revenue, forfeits loan volume.
Stop admitting new students and conduct a teach-out for current students (up to 3 years or the program's normal duration, whichever is shorter). Title IV eligibility is maintained during the teach-out.
The program continues to face the test each year. If it fails again within the next two years, it becomes a “low-earning outcome program.” Once a program fails a second time, Options A and B are no longer available. This is a use-it-or-lose-it decision.
If a program fails in 2 of any 3 consecutive years, it is designated a “low-earning outcome program” and loses eligibility for federal Direct Loans. Appeals are limited to calculation errors only — not program quality or alternative data. The program cannot be reestablished (or replaced with a substantially similar program) for at least 2 years. Students can still receive Pell Grants at this stage.
If an institution's low-earning outcome programs account for more than half of its Title IV recipients or more than half of its total Title IV dollars (in 2 of 3 consecutive years), the institution is placed on provisional certification and those programs lose eligibility for all Title IV aid, including Pell Grants.
The earnings test can only measure programs with enough graduates to produce a statistic. A program needs at least 30 completers in the cohort period to be tested. Even below that regulatory threshold, IRS privacy rules suppress earnings data when fewer than ~16 graduates can be matched to tax records.
Only ~24% of programs have enough graduates to measure
The remaining ~76% are invisible to the test. The 2,880 failing programs identified in the data are likely a lower bound — many small, niche, or newly created programs simply can't be evaluated.