The U.S. Department of Education announced that it has reached consensus on the third and final regulatory package to implement major reforms to higher education under the Working Families Tax Cuts Act. This marks the third time in a row that the Department has successfully agreed on regulatory language with stakeholders through negotiated rulemaking.
The finalized rulemaking wraps up the work of the AHEAD Committee (Accountability in Higher Education and Access Through Demand-driven Workforce Pell), which focused on creating a new accountability framework for all postsecondary institutions.
Reaching consensus means that negotiators on the AHEAD Committee agreed on the exact regulatory language for all components of the accountability package. In this process, participants work together in meetings to find agreement instead of debating separate positions. Consensus does not require unanimous support from every single member, but it does mean that no one blocked the agreed language and that the package reflects broad support from all represented interests.
“After more than 15 years of regulatory uncertainty under the previous three Administrations, we’ve developed an accountability framework that institutions can work with, students will benefit from, and taxpayers can rightfully expect to improve outcomes,” said Under Secretary of Education Nicholas Kent. “We deeply appreciate the AHEAD Committee negotiators and their efforts to break the cycle of student debt and poor return on investment for students and end the regulatory whiplash that has occurred for far too long. We look forward to holding all programs – across all postsecondary institutions – accountable.”
A New Accountability Framework
The Department and negotiators agreed on a framework that holds all higher education programs accountable for poor student outcomes. The framework uses earnings-based tests to assess whether graduates are earning enough compared to adults with only a high school diploma. Programs that consistently fail to meet these earnings standards face loss of access to some federal student aid programs. This marks a shift away from previous selective enforcement practices that depended on program type or institution type rather than outcomes.
“Do Not Harm” Standard Harmonized Across Rules
The new framework combines the Act’s “Do Not Harm” principle with existing regulations like Financial Value Transparency and the Gainful Employment rule. The goal is to apply consistent earnings-based thresholds across all programs, from certificates to graduate degrees, so that students and taxpayers are protected from low-value programs.
Penalties for Chronic Underperformance
Institutions that fail to meet earnings thresholds for two of three years could lose eligibility to participate in Direct Loan programs. If a significant share of a school’s programs fail, those programs could also lose Pell Grant eligibility.
Elimination of Redundant Metrics
The negotiators agreed to remove the old “debt-to-earnings” measure from the Gainful Employment rule because it largely overlaps with the new earnings-based metric and adds unnecessary regulatory burden.
For more information on the negotiated rulemaking process, see here.