How Do College Programs Measure Up Against the One Big Beautiful Bill Act’s New Accountability Standard?

Tia Caldwell, Jordan Matsudaira, and Clare McCann
October 2025

In July, Congress passed the One Big Beautiful Bill Act (OBBBA) that included significant changes to the federal government’s role in funding higher education. Among them is a new accountability standard that most college programs must meet in order to be eligible for federal student loans. Referred to by Senate Republicans as the “do no harm” standard, the law requires that graduates of most college programs earn more than the typical person who did not pursue a postsecondary credential. Undergraduate programs are compared to the earnings of high school graduates, and graduate programs are compared to the earnings of graduates with bachelor’s degrees.

Surprisingly, undergraduate certificate programs, which generally have the lowest earnings outcomes and have been the focus of past accountability efforts, were exempted from the OBBBA accountability scheme. Unlike all other programs (even very short-term certificate programs), the law does not require undergraduate certificate programs to meet any earnings standard to be eligible for federal loans. These programs are subject to standards that include an earnings test under existing Gainful Employment regulations, but it remains to be seen how or whether these rules will be implemented under the new Administration.

This brief presents estimates of which programs are likely to pass or fail the new OBBBA earnings standard. While, as noted, undergraduate certificate programs are eligible for federal loans regardless of how they perform on the OBBBA standard, we nonetheless include such programs in our analyses and assess how programs of all credential types would be categorized under the OBBBA standard. Overall, we find that few programs will fall short of the new earnings requirements, and these programs enroll fewer than four in 100 students. Low-earning programs, or those with earnings below the OBBBA earnings threshold, are not spread evenly across higher education. Rather, 52 percent of all federally aided students enrolled in such programs are in undergraduate certificate programs, despite making up only 8 percent of overall enrollment. Among the students enrolled in failing undergraduate certificate programs, 85 percent attend for-profit colleges and more than half (56 percent) are in cosmetology programs. While these programs may face consequences for their students’ poor financial outcomes under Gainful Employment regulations, they are ignored by the OBBBA earnings test.

Not including undergraduate certificate programs, even fewer students—only about 1.8 percent of all students—are enrolled in programs that fail the earnings test and could face real accountability under OBBBA. These students are concentrated in associate degree programs, as well as in the fields of study of health, the visual and performing arts, and liberal arts and general studies. This small set of programs could lose federal loan eligibility if they fail the earnings test in two of three consecutive years. For further information, we include additional tables for the figures in the brief; all underlying data used to generate the tables in the brief; and a codebook for the underlying data.
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