Key Points
- A new federal law creates a "Do No Harm" earnings test: programs whose graduates earn less than comparable high school graduates will lose access to federal student loans starting in the 2028-29 academic year.
- 93% of cosmetology certificate programs are expected to fail. Mental health services master’s programs also face higher than average failure rates.
- 644,000 students are currently enrolled in programs expected to fail, receiving $2.7 billion in federal loans annually. Already-enrolled students are protected and can finish their degrees, but new enrollees will eventually lose loan access if their program fails two years running.
Hundreds of thousands of college students are enrolled in degree and certificate programs that, under new federal law, may soon be cut off from federal student loans. The One Big Beautiful Bill Act, requires colleges to prove their programs actually improve graduates’ earning power, and those that don't risk losing access to federal student loan programs.
The framework, informally called “Do No Harm,” sets a new standard: if a program’s graduates earn less than comparable workers who never attended college at all, the program can no longer receive federal loan funding.
The Department of Education has already released preliminary data on nearly 50,000 programs, and the results reveal a clear pattern of which fields are at risk — including some where a college credential is legally required to work in the profession at all.
Remember: It's not just about the degree (like B.S. Business). It's about the program and school (such as University of Vermont, Bachelor's of Science in Plant Sciences). It's individual programs and degrees granted by individual colleges that are at risk.
Check Your Program
Using Federal Data
This free tool analyzes the federal dataset and will tell you if your specific program passes or fails the upcoming "Do No Harm" provisions.
Would you like to save this?
We'll email this article to you, so you can come back to it later!
How The College Degree Earnings Test Will Work
The new test is anchored to a basic premise: a college credential should boost your earning power above what you’d make without one. For undergraduate programs, the benchmark is the median earnings of comparable high school graduates in the same state. For graduate programs, it’s the median earnings of comparable bachelor’s degree holders.
The Department of Education measures earnings four years after a student leaves the program. If a program’s graduates fall below the benchmark for two out of three consecutive measurement years, the program loses access to federal Direct Loans.
There is some protection for currently enrolled students: a teach-out provision allows programs that fail for a single year to keep existing students using federal student loans, as long as the school stops admitting new students and completes the teach-out within three years. Students already in a failing program when sanctions take effect will not be left stranded.
The Department will calculate the first round of performance data in early 2027 and the second in early 2028. Because two consecutive failing years are required, the earliest a program can lose student loan eligibility is the 2028-29 academic year.
Which Programs Are Most At Risk
The Department’s preliminary dataset covers nearly 50,000 programs across all credential levels. Of those, 95% of programs are expected to pass. The remaining 5% still represents 644,000 students and $2.7 billion in annual federal loan disbursements.
Certificate Programs: The Highest Failure Rates
Undergraduate certificate programs face the greatest exposure by far. Cosmetology is the clearest example: 93% of cosmetology certificate programs are expected to fail the earnings test. Medical assisting certificate programs and somatic bodywork programs also carry high failure rates.
The cosmetology figure is particularly striking because cosmetologists are legally required to hold a state-issued license and obtaining that license requires completing an accredited program.
In other words, the credential is not optional: it’s a legal prerequisite for employment. Yet nine out of ten of those programs produce graduates who earn below the high school wage benchmark.
Restricting federal loans won’t eliminate the demand for cosmetologists but it may make it harder for lower-income students to access the profession.
Associate Degree Programs
Most two-year programs pass, but two fields stand out for elevated failure rates: health and medical administrative services, and design and applied arts.
These programs often lead to entry-level administrative or creative roles where starting wages fall below the high school earnings benchmark, particularly in states with a higher median wage floor.
Bachelor’s Degree Programs
Almost all bachelor’s degree programs are expected to pass. Four-year degrees carry a large enough earnings premium over high school diplomas that clearing the benchmark is straightforward for most fields.
The exceptions are concentrated in the arts and humanities — programs in fine arts, studio art, and related disciplines where graduates’ median wages run below the benchmark.
Master’s Degree Programs: The Mental Health Paradox
At the graduate level, about 4% of programs are expected to fail — but the distribution is uneven.
Mental and social health services is the only large graduate field where a majority of programs fall below the earnings benchmark for bachelor’s degree holders. Over 60% using the data provided by the Department of Education.
Collectively, failing graduate programs receive close to $1 billion in student loan funding per year. This datapoint is also one of the driving factors behind the new distinction between graduate and professional programs.
The Mental Health Licensure Problem
Of all the programs flagged by the Department’s data, the mental health services finding is one of the most challenging because it exposes a direct conflict between what the law requires and what it now penalizes.
To practice independently as a Licensed Professional Counselor (LPC), a Licensed Clinical Social Worker (LCSW), or a Licensed Marriage and Family Therapist (LMFT), you need a master’s degree. These are mandatory qualifications set by state licensing boards. There is no pathway to independent licensure in these professions without completing a graduate program.
Yet the Department’s preliminary data shows that many master’s programs in mental and social health services fail the earnings benchmark, which compares graduates’ wages to those of comparable bachelor’s degree holders.
The core problem: many mental health professionals (especially early in their careers when they're getting the required hours and training needed) work in community mental health centers, nonprofit organizations, and government agencies, where salaries are substantially lower than private practice.
The earnings test measures median wages, which pulls heavily from these lower-paying settings.
This matters for more than just the programs themselves. The U.S. is in the middle of a well-documented mental health workforce shortage (PDF File). Restricting federal loan access for the graduate programs that train licensed counselors and social workers could reduce the pipeline of mental health providers at exactly the moment demand is rising.
Graduates who do enter the field often carry substantial debt from master’s programs (typically $40,000 to $70,000) for careers with starting salaries in the $40,000 to $55,000 range, particularly in nonprofit and public sector settings. They also do heavily rely on programs like Public Service Loan Forgiveness to get relief for those federal student loans.
The earnings test, as written, does not account for the public value of mental health services, the mandatory nature of the credential, or the structural wage suppression in nonprofit and government settings.
Whether that gets addressed through regulatory adjustments or public comment remains to be seen. There is a bill to expand the new definition of professional degrees already in Congress, but it doesn't appear set to pass at this time.
What This Means For Future Students
For students currently enrolled in programs expected to fail, the teach-out provision provides protection. You will not be cut off from federal loans mid-program.
Schools that fail the earnings test for the first time can continue using federal loan dollars to finish educating enrolled students, as long as they stop admitting new students and complete the wind-down within three years.
For prospective students, the implications are more significant. If a program fails the earnings test in both 2027 and 2028, it will lose federal loan eligibility beginning in the 2028-29 academic year. Students starting a two- or four-year program today may be finishing right as these sanctions begin to bite.
Nearly 2,000 of the nation’s 5,000 colleges and universities have at least one program expected to fail. The institution’s overall reputation tells you little: what matters is the specific degree you’re pursuing.
Don't Miss These Other Stories:
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.