Which Degrees Could Lose Federal Student Loans

Starting in 2027, college programs whose graduates don’t out-earn high school graduates will start losing federal student loans. The fields most likely to fail train people for jobs that are mostly done by women, so women are the ones who will lose the most funding.
By Teona Abuladze · 7 min read

A cosmetology certificate. A massage therapy course. Training as a dental assistant, a medical assistant or a preschool teacher. A master’s degree in social work or counseling. According to the Education Department’s own projections, these are among the programs most likely to lose access to federal student loans under a rule finalized this summer.
Women do most of these jobs. Women make up 97% of preschool and kindergarten teachers in the United States, 92% of dental assistants and 91% of medical assistants. When the money for this training dries up, most of the students who lose it will be women.
What the rule actually does
The rule is real. The department finalized it on June 29 and published it in the Federal Register on July 1, 2026, under the name Student Tuition and Transparency System (STATS) and Earnings Accountability. It carries out a provision of the budget law Trump signed in July 2025.
The test is simple. Take the people who finished an undergraduate program and look at their median earnings four years later, using tax records. Compare that with the median earnings of high school graduates aged 25 to 34 in the same state. If the graduates don’t earn more, the program fails. Graduate programs are held to a higher bar: their graduates have to out-earn people with only a bachelor’s degree.
Three details matter:
It judges programs, not fields. A cosmetology certificate at one school in Hialeah is measured separately from the same certificate at a school in Orlando. Nobody is barred from borrowing because of the major they chose.
It takes time. The department runs the first calculation in early 2027. A program loses access to federal Direct Loans only if it fails in two out of three years, so the earliest anyone loses loans is the 2028–29 award year.
It mostly touches loans. Pell Grants are cut only at schools where more than half of federally aided students are in failing programs, which the department expects to be rare.
When The New Republic reported on the rule this week, the department answered on X: “This is fake news at its finest. First off, we’re not ‘banning’ any program.”
The rule judges a specific program at a specific school. It does not ban a major, and nothing is cut before 2028.
Where the projections come from
On January 5, 2026, the department’s Office of the Chief Economist presented a 22-slide deck titled “Estimated Impact of the Program Level Earnings Test.” It estimated that about 6% of programs and about 5% of students on federal aid would be in programs that fail. A later data release, in April, put the number of affected students at just over 825,000.
The deck named the fields with the highest failure rates, broken down by type of credential. The numbers below are the share of federally aided students in each field who attend a failing program:
• Undergraduate certificates: cosmetology 92.5%, massage and bodywork 89%, dental support 58.9%, medical assisting 50%.
• Associate degrees: cosmetology and bodywork both 100%, fine and studio arts 73.8%, English 69.9%.
• Bachelor’s degrees: religious studies 53%.
• Master’s degrees: religious studies 89.4%, mental and social health services 64.3%, fine and studio arts 44.1%, music 41.8%.
The credential level changes the picture. A two-year English associate degree and a four-year English B.A. are very different bets. Most bachelor’s programs pass easily; NPR reported that only about 1% are expected to fail, mostly in theater, music and studio art. “Social work and mental health counseling” is mainly a master’s-level problem. That’s where the licensed therapists come from.
Some names on the list are famous. According to department data reported by NPR, about 14% of bachelor’s programs in music are projected to fail, including those at Juilliard, the New England Conservatory and Indiana University’s Jacobs School of Music.
The department itself says these are estimates. They grouped programs into broad field codes, pooled graduates from 2017–18 and 2018–19, and hid many small programs for privacy. The real test, in 2027, will use narrower codes and newer data.
Whose jobs these are
Here is who does these jobs, according to the Bureau of Labor Statistics’ 2025 figures:
• Preschool and kindergarten teachers: 97.1% women
• Dental assistants: 91.8%
• Medical assistants: 90.8%
• Social workers: 81% to 84%, depending on the specialty
• Teaching assistants: 80.1%
• Personal care and service workers, which includes hairdressers and cosmetologists: 76.8%
• Massage therapists: 76.5%
• Mental health counselors: 72.6%
Women make up 47.1% of the whole workforce.
The pattern isn’t total. Musicians and singers are 34.1% women, and chefs and head cooks 26.4%. But most of the list is care work, beauty work and teaching small children, and those jobs are low-paid in the first place. A rule that cuts loans to programs training people for low-paid work will cut, above all, loans to women.
The American Association of University Women made this argument to the department during public comment in May. Citing its own 2021 research, the group wrote that women who borrowed for a bachelor’s degree held an average of $31,276 in debt a year after graduating, against $29,270 for men, while their expected first-year earnings were 81% of men’s. Women with certificates earned 71.2 cents for every dollar earned by men with certificates. So a program that mostly serves women “may face loss of Direct Loan eligibility not because it is a poor-quality program, but because its graduates face a discriminatory labor market.” The department kept the rule as proposed.
The fields most likely to lose loans train women for jobs that pay women little. The test counts the low pay against the school.
That’s the problem with measuring a school by its graduates’ paychecks. A community college can teach early childhood education well and still fail the test, because it doesn’t set what a daycare pays.
The case for the rule
The other side has numbers too, and they’re hard to wave away.
The problem is old. In 2015, a Brookings analysis of 671 cosmetology programs found that at 60% of them, graduates averaged between $10,000 and $15,000 a year. Only six programs had graduates averaging more than $20,000. One school it looked at, the Newberry School of Beauty in Granada Hills, California, charged $15,818 for a twelve-month cosmetology certificate.
Failure is concentrated in for-profit schools. In the department’s January estimate, 35% of for-profit programs failed, compared with 3.7% at public institutions and 3.1% at private nonprofits. About 55% of the students in failing programs were at for-profit schools.
“There are a handful of programs, like cosmetology, massage therapy and other personal services programs, where wages are just really low,” Jordan Matsudaira, an economist at American University, told U.S. News. He added that many undergraduate certificate programs are offered by lower-quality colleges.
Under Secretary Nicholas Kent put the department’s position plainly: “If a program cannot show that it leaves its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers.” The bar is modest. Graduates only have to out-earn someone who stopped after high school.
What critics say is wrong with it
Tips. Hairdressers and massage therapists earn a large part of their pay in tips, which often don’t show up fully in tax records. Cosmetology schools argued this during public comment. The final rule delays penalties for programs leading to jobs where most workers receive tips by one year, so the department can use earnings from tax years when the new “no tax on tips” deduction is in place.
Debt. The old rule for for-profit schools also checked whether graduates could afford their loan payments. The new rule dropped that. A $4,000 program and a $30,000 program with the same graduate earnings are now treated the same. Third Way, a centrist think tank, asked the department to at least keep publishing debt figures.
Timing. Four years after graduation is early in a career. A social worker’s pay after she’s licensed and supervising looks different from her pay in her first job.
There’s also an exception in the rule. After faith-based colleges objected, the department changed it so that low-earning religious programs can keep access to Pell Grants, though they can still lose loans.
What it means in Florida
Florida should pay the most attention. On the department’s state-by-state chart, about 9% of Florida students on federal aid attend a program projected to fail. That’s the highest share in the country, and nearly double the national figure of about 5%.
Colleges have to send the department program-level data for the new system by October 1, 2026, which is Thursday. The first real results arrive early next year. Until then, the list of fields is a forecast, not a list of cuts.

Teona Abuladze is the founder and editor of Shansi Magazine.
Sources: AAUW, public comment on Docket ED-2026-OPE-0100 (May 20, 2026), citing AAUW’s “Deeper in Debt: 2021 Update”; U.S. Department of Education, press release on the final STATS rule (June 29, 2026), and “Estimated Impact of the Program Level Earnings Test and Changes to Gainful Employment,” Office of the Chief Economist (Jan. 5, 2026); FSA Partners, Federal Register notice (July 1, 2026); Inside Higher Ed, “How New Federal Earnings Test Could Affect Higher Ed” (June 29, 2026) and “Earnings Test Gets Mixed Reviews in Public Comments” (May 26, 2026); Community College Daily (June 30, 2026); NPR, “New ‘do no harm’ test targets low-earning college degrees” (June 30, 2026); Newsweek, “Trump Administration Addresses Plan to Cut Student Loans for Some Degrees” (Sept. 29, 2026), citing the Los Angeles Times; U.S. News & World Report, “Want to Major in Theater? Don’t Expect a Student Loan” (March 2026); Brookings, David Wessel, “How to find out what graduates of that cosmetology program actually make” (June 25, 2015); Just the News (June 2026); U.S. Bureau of Labor Statistics, Current Population Survey, Table 11, 2025 annual averages.