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Fact Sheet: Biden-Harris Administration Announces Landmark Regulations on Accountability, 

Transparency & Financial Value for Postsecondary Students

The Biden-Harris Administration is announcing final regulations on financial value accountability 

and transparency that will provide students with the most effective set of protections against 

programs that leave them with unaffordable debt or no improvement to their earnings. The 

rules include a revitalized and strengthened Gainful Employment (GE) rule, that will protect 

approximately 700,000 students a year from career training programs that leave graduates with 

unaffordable loan payments or earnings no better than what someone with a high school 

diploma (who never pursued a college credential) earns in their State. In addition, the rules 

contain a new Financial Value Transparency (FVT) framework will give all students the most 

detailed information ever available about the cost of postsecondary programs, and the financial 

outcomes they can expect. It will also help prospective students understand the potential risks 

involved in their program choices by requiring them to acknowledge viewing this information 

before enrolling in certificate or graduate programs whose graduates have been determined to 

face unaffordable debt levels.

Gainful Employment

The GE program accountability framework will improve the options available to students 

planning to enroll in certificate programs at all institutions as well as degree programs at 

private for-profit colleges. Collectively, there are 32,000 such programs that enroll about 2.9

million students who receive title IV, HEA aid (e.g., Direct Loans or Pell grants) each year.

1 The 

GE programs represent about 20% of the more than 155,000 title IV eligible programs, and 

about 15% of approximately 19.3 million title IV, HEA supported students each year. They 

account for 45% of all title IV enrollment in programs with unaffordable debt or low earnings.

GE Accountability Metrics

Under the GE program accountability framework, the Department assesses whether career 

programs meet the statutory requirement of preparing students for gainful employment in a 

recognized occupation using two separate and independent metrics:

• A debt-to-earnings rate that compares the median annual payments on loan debt 

borrowed for the program to the median earnings of its Federally aided graduates. For a 

program to pass, its graduates’ debt payments must be no more than 8% of annual 

earnings or 20% of discretionary earnings, which is defined as annual earnings minus 

150% of the Federal poverty guideline for a single individual (about $21,870 in 2023).

• A new earnings premium test that measures whether the typical graduate from a 

program who received Federal aid is earning at least as much as a typical high school 

graduate in the labor force (i.e., either working or unemployed) in their State between 

1 The statistics cited in the factsheet are generally based on data described in detail in the Regulatory Impact 

Analysis of the rule, which focuses on program level performance data for completers and total enrollment 

between the 2015 to 2017 award years.
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the ages of 25 and 34. This is equal to roughly $25,000 nationally but varies across 

States. 

The debt-to-earnings rates (D/E) measure loan affordability: the share of borrowers’ annual 

earnings that need to be devoted to making student loan payments. Past research has shown 

that when D/E rates exceed the thresholds described above, debt is unaffordable. The 

Department estimates that borrowers in programs with unaffordable debt are 25% more likely 

to default on their student loans compared to borrowers in programs with passing D/E rates. 

The D/E rates also help identify programs where taxpayers are likely to bear the costs of 

Federal loans. Since borrowers can repay their loans as a fraction of their discretionary earnings 

for a fixed number of years under income driven repayment plans (IDR), when debt is high 

relative to earnings borrowers will be less likely to repay their full balances: borrowers in 

programs with failing D/E are predicted to repay less than half the share of their loans that 

borrowers in programs that pass D/E will repay under the new Saving on a Valuable Education 

(SAVE) IDR plan.

The D/E rates establish reasonable levels of earnings that a borrower must have to sustain a 

given debt level. The table below shows how much debt a program could have depending on 

different levels of earnings for a typical graduate. The amount of debt at a given earnings level 

varies by credential level because of differences in the interest rates charged to undergraduate 

versus graduate borrowers and different periods used to calculate how long a borrower would 

take to pay down their loans. 

Maximum Allowable Median Debt

Median Earnings

Undergraduate 

Certificate or 

Associate 

Bachelor’s Master’s Doctoral/Professional 

$25,000 $16,300 $22,100 $20,000 $23,600 

$50,000 $50,800 UG Max $62,500 $73,800 

$75,000 UG Max UG Max $112,400 $132,800

$100,000 UG Max UG Max $162,400 $191,800 

Note: Maximum debt levels are rounded to the nearest $100. The undergraduate (UG) maximum is $57,500 for an 

independent student and $31,000 for undergraduate students.

The earnings premium (EP) captures the extent to which postsecondary programs enhance a 

student’s earnings potential relative to not pursuing a college credential at all. The vast majority 

of students cite improved earnings or job prospects as among the most important reasons they 

choose whether and where to attend college, and the earnings premium measures whether 

programs are meeting that basic expectation. In the GE framework, it provides added 

protection to students, including those who take on small amounts of loans but who have 

earnings so low that even low levels of debt payments are unaffordable. Among individuals 
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with at least some college experience, rates of material hardship (e.g., experiencing food 

insecurity or being behind on bills) are more than double for individuals with annual income 

below that of the median high school graduate in their State compared to those with income 

above that threshold. Given that these necessities are unaffordable at such low earnings levels, 

it is not surprising that even small amounts of debt are also unaffordable. The default rates

among students in programs that pass the debt-to-earnings ratio thresholds but fail the 

earnings premium are very high: across all GE programs, default rates are higher among 

programs that only fail the earnings premium test than programs that only fail the debt-toearnings ratio. 

Figure 1 illustrates the role these metrics play in the accountability framework to assess 

whether programs prepare students for gainful employment. Each dot in the figure represents 

a program, with the median earnings of its graduates on the horizontal axis and the median 

debt on the vertical axis. The solid line shows the boundary between programs that pass and 

fail the debt-to-earnings measure—programs with higher debt levels above the line (shown in 

dark red) fail. The vertical dashed line shows the level of earnings of a typical high school 

graduate, so programs to the left of that dashed line fail the earnings premium test.

Figure 1: Illustration of the GE Accountability Framework

Program Performance based by Median Debt and Median Earnings

Impact of GE Accountability

Programs that fail either metric in a single year will be required to provide warnings to current 

and prospective students that the programs could be at risk of ineligibility for the title IV, HEA 

Federal student aid programs in subsequent years. Programs that fail the same metric in two of 

three consecutive years will not be eligible to participate in Federal student aid programs. 
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The Department projects that about 1,700 programs that enroll nearly 700,000 students per 

year will fail at least one of the two metrics in a single year—about one-quarter of all 

enrollment in GE programs. These programs have a disproportionate share of their total 

enrollment in failing programs, accounting for nearly half of all enrollment in high-debt-burden 

or low-earning programs.

Nearly 90% of students in failing GE programs attend for-profit institutions. Among certificate 

programs, where all programs offered by all institutions are covered by the rule, about 80% of 

the enrollment in failing programs is in the for-profit sector. About 55% of for-profit institutions 

have at least one program that does not meet one of these standards. While more than twothirds of public and private nonprofit colleges offer at least one GE program, the Department 

estimates that 92% of public institutions and 97% of private, non-profit institutions have no 

high-debt-burden or low-earning GE programs.

Of the students attending failing programs: 

• about 274,000 attend GE programs that have high debt burdens but typical earnings 

above those of high school graduates; 

• about 306,000 attend GE programs that lead to low earnings but do not produce high 

debt burdens; and

• about 115,000 are in GE programs that result in high debt burdens and low earnings. 

Failing programs leave borrowers with poor financial outcomes. For instance, the median 

annual earnings for graduates is less than $15,000 at undergraduate certificate programs that 

fail the debt-to-earnings test.2 At least half of completers in failing undergraduate certificate 

programs have annual loan payments greater than (i.e., over 100% of) their discretionary 

earnings. Graduate GE programs that fail the D/E rates, meanwhile, have typical earnings of 

$42,000 compared to debt of over $79,000. 

Driving program improvement and better options for students

The Department projects that the rules will lead to program improvements that will benefit 

students and institutions. To improve the D/E rates of their programs, institutions can reduce

prices and increase institutional aid offers to students, since loan debt for the debt-to-earnings

rates calculations are capped at the net direct costs charged to a student. 

Students do not need to settle for programs with sub-standard outcomes if their programs 

cannot improve. The Department projects that the vast majority of students in failing GE 

programs have better options available to them at passing programs in a similar field nearby or, 

in some cases, even at the same institution. We estimate the typical student at a failing GE 

program has at least five other programs available in a similar field in the students’ local area. 

2 Earnings expressed in 2019 dollars, based on the 2022 Program Performance Data released during Negotiated 

Rulemaking.
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On average, these alternative options serve students better: their graduates have 43% higher 

earnings and 22% less debt. The Department also estimates that institutions with programs that 

have better outcomes, including Historically Black Colleges and Universities and community 

colleges, are likely to gain enrollment because of the rule, as they offer better performing programs 

that compete for students with institutions that will have more enrollment in failing programs.

The Department has taken care to design the rule in a way that is fair and not 

counterproductive to the crucial work being done by institutions that provide access to valuable 

career training programs for underserved students. As Figure 2 shows (for all undergraduate GE

programs) median debt levels across programs bear almost no relationship to the share of a 

program’s students who receive a Pell Grant (i.e., the fit lines, showing the average debt levels 

for programs in high- and low-tuition institutions, in the figure are flat). Measures of program 

debt do not therefore reflect income differences of students across programs. but rather 

differences in costs. The Figure makes it clear that differences in tuition have a large impact on 

student debt levels: institutions in the top 25% in terms of their tuition levels have programs 

that leave students with about $5,000 more in debt than institutions in the bottom 25% of 

tuition levels—a difference that is about the same regardless of the share of Pell students at the 

program.

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Figure 2: Program Debt Levels and the Share of Students Receiving a Pell Grant

Among Undergraduate GE Programs

3 Similar patterns hold if the analysis is limited to programs with the same credential level.
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The GE program accountability framework will help protect students from entering programs 

that do not prepare students for gainful employment, which will ultimately improve the odds 

their educational investments pay off. Evidence from prior research and an analysis included in 

the final rule show that, while underserved students enroll in failing programs at high rates, 

program and institution quality play a critical role in determining student outcomes, more so 

than student demographics. Steering these students towards better performing programs will 

advance equity and economic mobility by improving their financial outcomes.

Changes from the draft rule

The Department has made some modifications to the final GE program accountability 

framework in response to public comments on the proposed rule. The changes include: 

• We exempt institutions from all reporting requirements and coverage of the rule with 

no programs large enough to calculate the metrics underlying the GE program 

accountability framework. This will alleviate reporting burdens for nearly 700 small 

institutions (accounting for less than 1% of all Federally aided students), including many 

small Tribally Controlled Colleges and Universities, proprietary, private non-profit, and 

foreign institutions.

• We exempt institutions in Puerto Rico and other Territories and Freely Associated States

from the accountability provisions of the rule, but still require reporting under the 

Financial Value Transparency framework. Data used to calculate both high school 

earnings and discretionary earnings (i.e., the federal poverty line) are not currently 

available, so the Department will not sanction programs based on their debt and 

earnings outcomes relative to the thresholds described in the rule.

• We establish a data-driven process to identify fields where measuring earnings over a 

longer time horizon is necessary, potentially including graduate programs focused on 

mental health, due to lengthy post-graduate training requirements that limit graduates’ 

early career earnings potential.

The GE program accountability framework will go into effect on July 1, 2024, with the first 

official metrics published in early 2025. The first year that programs may become ineligible is

2026.

Financial Value Transparency

The Higher Education Act acknowledges there are differences across programs and colleges,

and this means we have different tools available to promote these goals in different contexts. 

The final rule therefore creates a Financial Value Transparency (FVT) Framework that will

provide information to all students in all programs on the typical earnings outcomes, borrowing 

amounts, cost of attendance, and sources of financial aid to help students make more informed 

choices.

In advancing this FVT framework, the Department is not dismissing the myriad non-financial 

benefits generated by a postsecondary education, including better health, job satisfaction, 

overall happiness, increased civic participation, and innumerable intangible benefits that elude 
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quantification. For many students, financial considerations would, appropriately, be just one of 

many factors used in deciding whether and where to enroll. However, with college tuition at 

historically high levels and the growing need for student loans to finance these costs, it is 

critical for students, families, and taxpayers alike to have accurate and transparent information 

about the possible financial consequences of their postsecondary program options when 

choosing where to enroll.

The Department will help students be better informed by hosting a new program information

website that provides standardized information about program costs (including tuition and 

fees, books, and supplies), non-Federal grant aid, loan burden (including both private and 

Federal loans), earnings of completers, and applicable occupational and licensing requirements. 

This website will give students and families a personalized estimate of what they’ll pay out-ofpocket to earn credentials in specific postsecondary programs, along with key information on 

the debt and earnings outcomes of program graduates. 

Past research has underscored the importance of ensuring information is proactively delivered 

to borrowers at salient moments in their decision-making. In situations where students may 

face higher risks of poor financial outcomes, the FVT provides added protections for 

prospective students. The framework requires that such students acknowledge having seen the 

financial information on the website, including a plain language description of the fact that the 

program leaves its graduates with high debt burdens, before the student can enroll in the 

program. These requirements will apply to prospective students at certificate and graduate 

degree programs. The Department chose to exclude undergraduate degree programs from this 

provision in the final rule to better target the acknowledgment requirements to programs to 

which students tend to directly apply. In addition, our empirical analysis shows that high-debtburden programs are relatively rare among undergraduate degree programs outside the 

proprietary sector.

Some commenters on the rule expressed concern that programs that produce important 

societal benefits, but may lead to less remunerative careers, might be negatively affected by 

being disproportionately labeled high-debt-burden or low-earning. It is rarely the case, 

however, that such programs fail to meet the minimum standards outlined in the rule. For 

example, education training programs are less likely to fail the D/E rates or EP measure than 

other programs. Indeed, data from the National Education Association’s Teacher Salary 

Benchmark Report indicate that even States with the lowest salaries have average starting 

salaries at least $5,000 higher than the State’s EP threshold. Similarly, healthcare professions

fail at low rates—about 8.2% and 2.0% of GE and non-GE programs did not pass the D/E rates 

or the EP measure. Finally, arts programs do fail at a slightly higher rate than the average 

program, but the overall failure rate is low and the difference is small (3.7% vs. 1.2% for non-GE 

programs, with a smaller difference among GE programs (5.5% vs. 5.3%)).

The reporting requirements for these transparency provisions will start July 1, 2024, but the 

new website will be built and launched afterwards with the first acknowledgment requirements 

starting in 2026.
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Fixing a Broken System

This rule builds on and complements the Department’s previous efforts to enhance

accountability and transparency in higher education, as well as the historic steps already taken 

by the Biden-Harris Administration to fix a broken student loan system. The new SAVE plan

protects individual borrowers from unaffordable loan payments, providing insurance to 

prospective students to take risks investing in their future. The Financial Value Transparency

and GE rules are proactively aimed at preventing students from ending up with unaffordable 

debts to begin with and stopping taxpayer dollars from flowing to career training programs that 

predictably and persistently fail their students. The final rule helps to ensure the education that 

SAVE helps borrowers afford is truly valuable.