The U.S. Department of Education proposed a new “earnings test” that would strip federal Title IV loan eligibility from undergraduate programs whose graduates do not earn more than the typical high school graduate, with similar requirements for graduate programs. The proposal follows a consensus-backed framework developed through negotiated rulemaking and authorized under last year’s One Big Beautiful Bill. The department said the rule is designed to stabilize federal oversight and reduce student debt burdens caused by “low-earning” programs that fail repeated checks. Under the draft approach, a program would receive warnings, then lose direct loan eligibility if it fails again, and could ultimately lose all Title IV eligibility after subsequent years depending on the share of students or Title IV revenue affected. The rule would be effective as early as July, with a 30-day public comment period before finalization.