The U.S. Department of Education proposed an “earnings test” that would strip federal student aid eligibility from undergraduate and graduate programs whose graduates do not earn more than the typical high school graduate. The framework follows a consensus rulemaking process and is designed to trigger warnings and potential loss of direct loan access over multiple years. Under the proposal, programs that fail would first receive student warnings, then potentially lose direct loan eligibility and be classified as low-earning. The department would escalate sanctions if repeated failures affect enough of the institution’s students or Title IV revenue. The proposal, authorized under last year’s “One Big Beautiful Bill,” is open for a 30-day public comment period, with the department saying it could take effect as early as July. For colleges, the timetable increases pressure to validate outcomes measures, define program-level boundaries, and prepare for possible Title IV impacts tied to earnings reporting.