Dept of Education Issues “Earnings Premium” Rule; Philosophy, in General, Should Be OK

The US Department of Education has issued a new rule that makes the availability of Federal financial aid for students conditional on whether the programs the students are enrolled in meet an “earnings premium” criteria. According to a press release from the Department of Education, the “Student Tuition and Transparency System (STATS) and Earnings Accountability rule” states that: undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor’s degree holder. If a program fails to show at least this modest financial return on investment for its graduates in two out of three consecutive award years, it will lose eligibility to participate in the federal Direct Loan program. After three years of consistently failing the earnings premium measure, the Department could also terminate eligibility for Title IV of…