Final accountability rules released
The Department of Education (ED) on Wednesday published the final regulations establishing a new accountability and transparency regime based on program completers’ earnings. As covered in opens in a new windowCommunity College Daily, the regulations are the last set of final rules issued to implement the numerous higher education components of last year’s One Big Beautiful Bill Act (OBBBA).
Starting July 1, 2027, the median earnings of program completers will be measured against those of high school graduates aged 25-34 in the institution’s state. If the program’s earnings are lower than the comparison group for two out of three years, failing the so-called “Do No Harm” standard, the program will lose the ability to offer Direct Loans.
ED convened a negotiated rulemaking committee in January to consider OBBBA’s new accountability system to measure the earnings of program completers against a comparison group of high school graduates. The group also considered changes to existing Gainful Employment/Financial Value Transparency regulations. The committee reached consensus, with all but one member affirmatively approving the regulations. Because the committee reached consensus, ED was bound to use the version of the draft regulations agreed to by the committee in its Notice of Proposed Rulemaking(NPRM) and, to a certain extent, in its final rules.
In one of the more controversial provisions coming out of the rulemaking, an institution can lose its ability to offer both Direct Loans and Pell Grants for students enrolled in failing programs if more than 50% of programs at an institution fail the earnings test, or if more than 50% of Title IV funds awarded to the institution go to failing programs. AACC objected to this provision in its written comments on the NPRM, arguing that it overreaches ED’s statutory authority. ED made a slight adjustment to this provision based on feedback from AACC and others. In the final rules, an institution can avoid the so-called “50-50” penalty by proactively suspending participation in the Direct Loan program for programs that would fail the earnings test.
The final rule also delays the application of the earnings metric to programs that prepare students for occupations in which tips constitute a substantial portion of income.
Trump nominates Sonderling for DOL secretary
President Trump on Monday nominated Acting Labor Secretary Keith Sonderling to serve as permanent secretary. Sonderling has served as acting secretary since April. He had previously served as the Department of Labor’s (DOL) deputy secretary since March 2025. His confirmation hearing has not yet been scheduled before the Senate Committee on Health, Education, Labor and Pensions.
As covered in opens in a new windowCommunity College Daily, Sonderling has visited many community colleges in his official capacities, touting the new Workforce Pell program and the administration’s commitment to expanding apprenticeships.
ED adds new professional degree programs for loan limits
On Monday, the Department of Education published an opens in a new windowElectronic Announcement detailing new programs that will be temporarily categorized as professional programs for the purpose of calculating loan limits. As a reminder, the One Big Beautiful Bill Act (OBBBA) directed ED to institute new annual, aggregate and lifetime borrowing limits, with different limits based on program level. Congress acknowledged that some programs, labeled professional degree programs in the statute, take longer to complete and that students may need to access greater loan eligibility in pursuit of these credentials. In crafting rules to implement the statute, ED put forth an extremely limited interpretation of programs that would qualify as professional degree programs, ultimately granting that designation to only 11 programs. Last week, a federal court issued a stay for parts of ED’s interpretation of a professional degree program, prompting ED to release an expanded list of programs while litigation continues. If ED is ultimately successful in litigation, it will likely revert to the narrower definition of 11 programs.
The new eligible programs include three nursing programs: Registered Nursing, Nurse Anesthetist, and Nursing Practice. AACC had raised concerns about preserving loan access for postbaccalaureate nursing students who serve as the pipeline for community college nurse educators in our written response to the proposed rules. Moving forward, the association hopes to see these nursing programs remain on the list of qualifying professional programs for higher loan limits to avoid undermining faculty supply.
State Workforce Pell certification form published
The Department of Education on Wednesday published a new opens in a new windowState Workforce Pell Program Certification Form that governors must complete to verify which programs have been approved as eligible, in-demand workforce programs for Workforce Pell. The Office of Federal Student Aid (FSA) Electronic Announcement details the application process: governors will provide completed forms to institutions, and institutions will upload the forms into their Applications to Participate in Federal Student Financial Aid Programs (E-Apps).
PSLF rules vacated in court
A federal judge on Tuesday vacated the Department of Education’s opens in a new window final rule on Public Service Loan Forgiveness (PSLF). The rule, which was set to go into effect on July 1, sought to institute new restrictions on employer eligibility based on the agency’s interpretation of whether the employer engaged in or supported activities with a “substantial illegal purpose.” Plaintiffs representing non-profit and public employers sued, arguing that the new rules overstepped agency authority, were arbitrary and capricious, and violated the First Amendment. The federal judge issued an order of dismissal and, as a result, the previous PSLF regulations around qualifying employers remain in effect. It is not yet known when or if ED will appeal the decision.
Upcoming AACC events
- AACC will host a opens in a new windowfederal policy update webinar on accreditation issues on July 15, at 3:00 pm ET.
- Register for AACC’s annual opens in a new windowAdvocates in Action event in Washington, D.C., on September 15 and 16. Space is limited.