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A new law holds colleges accountable if their grads don’t earn more than $36,000 a year
About 300 California programs, especially in cosmetology and the arts, failed the new earnings test and could lose federal loan access.
- Effective this month, the One Big, Beautiful Bill Act requires U.S. colleges to prove graduates earn at least $36,000 annually, matching a high school graduate's median wage, or face federal loan ineligibility.
- Congress enacted this legislation on July 4, 2025, to regulate programs with poor financial returns after years of 'regulatory ping pong' where prior department rules were repeatedly implemented then abandoned.
- Michael Itzkowitz, president of the HEA Group, found roughly 300 California programs fail this test, particularly in cosmetology and arts where some graduates earn just over $12,000 annually.
- Faculty at the California Institute of the Arts and other institutions are reviewing compliance, arguing the benchmark overlooks creative work's societal value and regional economic disparities.
- Low-Performing programs have time to adjust, but students could lose federal loan access starting July 1, 2028, or July 1, 2029, for institutions granted a one-year extension.
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Humiliation for hundreds of California colleges whose alumni earn less than high school grads
A new federal requirement that took effect this month requires colleges, universities and certificate programs to prove graduates earn at least as much as the median worker in their state with only a high school diploma.
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A new law holds colleges accountable if their grads don’t earn more than $36,000 a year
This story was originally published by CalMatters. Sign up for their newsletters. With just a high school diploma in hand, and no additional training or education, the average Californian is currently expected to earn about $18 an hour, or $36,000 a year — just above the state’s minimum wage. Effective this month, all colleges, universities […]
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Leaning Left1Leaning Right1Center4Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 17%
C 67%
R 16%
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