Student loans have been a millstone around the neck of many college grads for years, but the Department of Education is enacting reforms to help prevent more young people from falling into this debt trap. Ironically, some colleges, institutions that exist to provide students with an education, are furious about these loan reforms because it means their taxpayer-funded gravy train is coming to a halt.

The federal student loan program is supposed to operate on a simple principle: allowing a young person to finance an education today and repay the cost with a higher future income. That principle has been wantonly violated for too long by colleges and universities, institutions that lured young people into mountains of debt with no prospects of repayment.

That’s why the Trump administration’s new earnings accountability rule will protect future college students. It requires undergraduate programs to show that their graduates out-earn typical high-school diploma holders, while graduate programs must top the earnings of typical bachelor’s degree holders.

If a program fails this test in two out of three consecutive years, it loses eligibility for federal direct loans. Students can still choose those majors, but they won’t be able to go deeply into debt via the federal student-loan programs.

>>> American Schools Cost More Than Ever but Our Students Still Keep Failing

Whereas the Biden administration sought to foist the repayment of student loans onto the backs of taxpayers under the euphemism of “loan forgiveness,” the current Department of Education wants to close the barn door before any more horses get out by stopping the issuance of loans that will likely never be repaid.

This is about protecting young adults, many of whom are right out of high school, from falling into a financial snare. But that doesn’t stop the hyperbolic critics who decry this common-sense reform as an assault on higher education. Ironically, those far-left voices were silent when Democrat administrations implemented similar policies.

The Obama administration adopted its “gainful employment” rule in 2014 to cut off aid to career programs, overwhelming at for-profit colleges, whose graduates couldn’t earn enough to manage their debt.

Then, in 2023, the Biden administration revived that approach by pairing an earnings test with a debt-to-earnings ratio test that covered certificate programs everywhere and every program at for-profit colleges.

Those efforts had little impact, unfortunately. They not only excluded most college students, but the Department of Education spent 15 years issuing several versions of the rule with each one subsequently bogged down by legal, administrative, and operational challenges. Not one program lost eligibility.

This time, however, it’s been enshrined into statute. Congress wrote the “do no harm” earnings test into the One Big Beautiful Bill Act, enacted July 4, 2025, and the new rule applies the standard evenly and fairly, across every program, at every institution. Students are protected regardless of whether their school is nonprofit or for-profit.

This offers protection for not just the students who get buried under mountains of debt that they can never repay. It protects taxpayers, too. When borrowers can’t repay their loans, they wind up in income-driven repayment plans, “forgiveness,” or default, and the loan ends up being paid for by taxpayers, including Americans who never went to college or who paid off their own loans.

>>> Universities Need Real Debate, Not Relabeled DEI

The government has no business using taxpayer dollars to subsidize young adults going into tens or hundreds of thousands of dollars of debt with little prospect of repayment. But many schools are up in arms about this move because it effectively stops the subsidies for the schools themselves.

The gargantuan debt load that students take on is funneled to the colleges those students attend, so the federal loans act as a subsidy for higher education, not for individual students. Some of these schools are petrified at the prospect of having to warn current and prospective students when a program is at risk and then requiring signed acknowledgements from those students recognizing that their program choice is effectively a bad financial decision.

Unlike what critics say, the rule bans no particular majors, and people can still study whatever they choose. The only difference is that the federal government will no longer give young people massive loans for a program that won’t improve their earnings potential and leave them worse off financially after college than they were before.

For decades, an endless stream of federal tax dollars permitted colleges to raise the cost of attendance while selling 18-year-olds useless majors, often ending in the word “studies.” Tying loans to outcomes finally motivates schools toward caring about whether or not their graduates will be financially successful. That policy is pro-student, pro-taxpayer, and long overdue.