The U.S. Department of Education is introducing an accountability measure for colleges that receive federal student aid. Under the new rule, institutions must demonstrate that their graduates earn more than comparable workers, or risk losing access to federal student loans for those programs. Programs will be evaluated over three consecutive years, needing to meet the earnings benchmark in at least two of those years.
Education Secretary Linda McMahon stated that many colleges have focused on enrollment and tuition rather than adequately preparing students for careers. She emphasized that financial incentives have led universities to prioritize revenue over student success. The average cost of a four-year college degree in the U.S. is approximately $153,080, while private universities average $234,512.
College enrollment has declined from a peak of about 70% of high school graduates in 2016 to around 62% in recent years, with approximately 60 colleges closing each year out of 4,000 degree-granting institutions. Additionally, a significant portion of Gen Z and Millennials view their college degrees as a waste of money, and many employers are increasingly dropping college degree requirements for job applicants. The Department of Education noted that this new measure aims to protect both students and taxpayers.