CAI Policy Insights: Earnings Outcomes, Workforce Alignment Guide ED Policies
After a few months away from the topic, this edition of CAI Policy Insights returns to the U.S. Department of Education’s (ED) recent negotiated rulemaking activity. Committee drafts have become proposed and even final rules in record time as ED attempts to have everything in order ahead of the July 1, 2026 effective date for a number of key One Big Beautiful Bill Act (OBBBA) (also known as the “Working Families Tax Cut Act”) provisions impacting higher education. Over recent months, ED has released final rules tied to the Reimagining and Improving Student Education (RISE) committee with a focus on student loan reforms, and the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) committee with a focus on Workforce Pell. Last month, ED also more formally announced its new proposed accountability framework that would affect nearly all Title IV-eligible programs.
Institutions now enter a compliance mobilization window for rules scheduled to take effect in just over a month’s time. That includes final regulations implementing major federal student loan changes, final regulations for Workforce Pell, and proposed rules that would create a new earnings-based accountability structure for programs participating in federal student aid programs.
For online programs, these changes can be more pronounced and challenging to navigate, with students spread across multiple states and broader geographic labor market considerations than campus-based programs. Those factors could affect Workforce Pell program approvals, earnings comparison calculations, and ultimately strategic decisions about which programs to offer to whom.
With the rush to meet the July 1 deadline on the horizon and soon-to-be in the rearview mirror, ED does not appear to be slowing down. The Department’s Accreditation, Innovation, and Modernization (AIM) committee recently reached consensus on proposed accreditation-related rules, meaning another significant regulatory package is likely to be proposed for public comment later in the summer, likely with aspirations to release a final rule by Nov. 1 to ensure a July 1, 2027 effective date. While there is a lot happening all at once, the larger picture is clear: Together, the RISE, AHEAD, and AIM committee developments point toward a higher education policy environment increasingly focused on earnings outcomes and workforce alignment.
Feature Policy Updates: From Negotiation to Implementation
During the fall and winter, CAI Policy Insights followed the RISE and AHEAD negotiated rulemaking committees as they worked through the student loan, Workforce Pell, and accountability provisions of OBBBA. At the time, the major takeaway was that consensus in negotiated rulemaking would likely give institutions a strong preview of forthcoming regulations. That preview has now become a more definitive regulatory roadmap, with ED issuing final RISE regulations, final Workforce Pell regulations, and a proposed AHEAD accountability rule—each closely following the frameworks agreed to by negotiators earlier this year.
RISE Final Rule: Student Loan Limits and Repayment Changes
The RISE final rule, released on May 1, 2026, codifies major changes to federal student loan programs. These include new annual and aggregate loan limits, changes to repayment plan availability, and the creation of a new income-driven repayment option known as the Repayment Assistance Plan.
For institutions, the most immediate planning questions may involve student communications, financial-aid counseling, and program-level affordability. Graduate and professional programs that have historically depended on higher levels of federal borrowing may need to reassess how students will finance enrollment under the new caps. Programs may also need to consider whether total cost, time to completion, and expected earnings are aligned in ways that remain viable for students under a more constrained federal loan environment.
The definition of “professional student” and “professional degree” remains especially important because professional programs are treated differently from other graduate programs for federal borrowing purposes. Programs that do not fall within the professional category may face lower federal borrowing limits, even if they are tied to licensure or advanced professional practice in ways that students and institutions may view as comparable. On May 19, a group of 25 states (including Michigan) and D.C., filed a lawsuit challenging the interpretation of the professional degree definition provided by ED as “arbitrary and capricious.” The department had argued during rulemaking sessions and in its preamble to the final rules that it could not expand the professional degree borrowing limit to programs not directly listed or directly related to existing definitions at the time. The complaint alleges that this interpretation runs contrary to legislative intent and points out that the existing definition clearly did not create an exhaustive list by offering illustrative examples. For now, institutions should maintain the status quo in working towards compliance ahead of July 1, as we await the review by the Maryland district court.
These regulatory updates will significantly change the student financial aid landscape. Even where academic programs remain the same, student demand, affordability, and enrollment behavior may shift with the decrease in federal loan availability. Online graduate programs, which often serve working adults and students outside an institution’s immediate region, should pay particular attention to how these changes affect student access and enrollment trends.
Workforce Pell Final Rule
The Department has also now finalized regulations implementing the new Workforce Pell program. Workforce Pell will allow Pell Grant funds to be used for certain short-term workforce programs that meet statutory eligibility criteria. In short, eligible workforce programs must satisfy a series of requirements tied to program length, workforce alignment, state approval, completion, job placement, earnings outcomes, and return on investment. These programs are intended to be shorter than traditional Pell-eligible programs and aligned with high-skill, high-wage, or in-demand jobs as determined by individual states. The final rule also addresses the interaction between Pell eligibility and other non-federal grant or scholarship aid, including circumstances where other aid equals or exceeds a student’s cost of attendance.
For online programs, one of the most critical operational issues is state approval. Workforce Pell eligibility relies heavily on a state-level process, with governors and state workforce boards playing a central role in identifying high-demand industries and approving programs. The final rule allows for some cross-state collaboration, including bilateral agreements, but does not create a simple nationwide approval pathway for distance education programs.
Workforce Pell could create new opportunities for short-form, workforce-aligned credentials, including non-degree offerings that may fit well within online and hybrid delivery models. However, the eligibility bar is high. Institutions considering Workforce Pell should evaluate not only curriculum and credential design, but also job placement capacity, employer partnerships, state authorization and approval pathways, earnings data, and whether the program can maintain eligibility over time.
Accountability and STATS Proposed Rule: A Single Earnings-Based Framework
On April 20, ED released its proposed accountability rule, which would create a new Student Tuition and Transparency System (STATS) as well as introduce a broader earnings accountability framework for Title IV programs. Unlike prior gainful employment frameworks that applied most directly to the for-profit sector as well as non-degree programs, this proposed framework would apply a more uniform earnings metric to nearly all Title IV-eligible programs. A detailed breakdown of these changes can be found in the January 2026 edition of CAI Policy Insights, with no significant changes between draft and final versions.
This framework also reflects a shift away from debt-to-earnings metrics and toward an earnings premium approach. In other words, the question is not only whether students borrowed too much relative to their income, but whether program completers are earning enough compared with similarly situated working adults who did not complete the same level of education.
The proposed accountability rule could become one of the most consequential federal program eligibility frameworks in years. Institutions may need to examine program-level earnings outcomes, data reporting capacity, student location data, modality-specific outcomes, and whether programs offered in multiple formats produce different earnings results. For online programs with geographically dispersed students, the choice between state and national comparison data may be especially important.
Accreditation Rulemaking: AIM Committee Reaches Consensus
Moving away from OBBBA rulemaking, ED’s AIM committee reached consensus last week on language for proposed accreditation-related regulatory changes. Instead of stemming from legislation, these efforts derive from the April 23, 2025 executive order Reforming Accreditation to Strengthen Higher Education. The department has framed the AIM process around accreditation reform, recognition of new and existing accreditors, credit transfer, intellectual diversity, student outcomes, and reducing barriers to innovation. Because consensus was reached, ED’s forthcoming proposed rule is expected to closely track the negotiated draft language.
Key proposals to the accreditation system reflected in the consensus framework include:
- Credit transfer. Accreditors would be expected to ensure that institutions maintain more student-friendly credit transfer policies, ensuring credit is awarded for successfully completed courses at another accredited institution when the content and learning outcomes are comparable, thereby lowering total costs for students, and shortening time to completion.
- Recognition of new accreditors. The framework would reduce barriers for emerging accreditors by eliminating the current two-year accreditation activity requirement before seeking federal recognition. New accreditors would still need to demonstrate that they have accredited at least one institution or program before recognition is granted, but the pathway towards recognition would be far easier than it has been historically.
- Changing accreditors. The consensus text could simplify the process for institutions seeking to change accreditors, while attempting to preserve ED’s review authority where a change may be used to evade oversight, delay enforcement, or undermine Title IV program integrity.
- Programmatic accreditation influence and professional licensure. The framework would address concerns that programmatic accreditors and affiliated professional associations may have outsized influence in contributing to potentially unnecessary credential requirements for professional licensure and certification. (Note, however, that states, not accreditors, ultimately set these standards.) Accreditors would need to justify standards that restrict entry into an occupation and could not rely solely on trade association preferences.
- Student outcomes and return on investment. Accreditors would be expected to place greater emphasis on student success measures, including retention, completion, graduation, licensure or certification results, post-completion outcomes, and educational and economic returns. This reflects a broader federal shift away from input-based quality assurance and toward outcomes-based accountability.
- Alternative pathways. The draft text addresses customized pathways and abbreviated or modified courses or programs that recognize students’ prior knowledge, including learning acquired through employment or military service. This could be relevant for competency-based education, credit for prior learning, and workforce-aligned program models.
While each of these developments may be noteworthy in their own right, the shift from more “rubric-based” quality assurance (largely considering the ingredients of an academic program) towards outcomes-based review processes and return on investment metrics may be a monumental shift. Not only will institutions now be held to the earnings-based metrics through direct federal requirements, but institutions may also have to factor in program costs to ensure alignment with new quality assurance frameworks that could result from these rulemaking efforts.
Key Takeaways
With final rules for RISE and Workforce Pell now available, along with the proposed accountability rule, institutions should now have a relatively clear picture of the post-July 1 regulatory landscape for higher education. For online and hybrid programs in particular, several critical questions stand out:
- How will new federal loan limits affect student access, enrollment, and affordability, especially in graduate and professional programs?
- Are online, short-term programs, including microcredentials, designed in ways that could satisfy Workforce Pell requirements, and are institutions prepared to track and satisfy requirements in addition to seeking necessary approvals associated with these programs?
- Do existing data systems allow programs to analyze earnings outcomes, student location, program modality, and reporting obligations at the level of detail likely to be required? What changes need to be made to have a clearer understanding of program performance for new Title IV accountability purposes and potentially for Workforce Pell where applicable?
- How might accreditation changes affect program innovation, credit transfer, substantive change processes, and new credential development?
A common thread across these policy changes is the idea that student aid eligibility should be premised on quality assurance and accountability measures that address questions of program costs, workforce alignment and future earnings potential. Institutions developing or managing online and hybrid programs should begin assessing these rules not only as financial aid compliance issues, but as strategic program design considerations.
Other Developments Worth Monitoring
Other major policy developments impacting digital learning are outlined briefly below.
- Digital Accessibility Interim Final Rule Lawsuit. The National Federation of the Blind has filed a lawsuit against the U.S. Departments of Justice (DOJ) and Health and Human Services, challenging the DOJ’s approach to delaying implementation of its 2024 digital accessibility rule through the release of an interim final rule. The delay itself was covered in the previous edition of CAI Policy Insights.
- Canvas Cyberattack. In the aftermath of the Canvas cyberattack, U.S. Congressional letters (from both Senate and House committees) have been sent to Instructure, Canvas’s parent company, and ED has released guidance via (General-26-27): Technology Security Alert – Ongoing Cybersecurity Incident Involving the Canvas Learning Management System.
- New Study Explores Likely Financial Impact of Recent Rulemaking Efforts. A new study suggests the greatest financial risk in the wake of OBBBA rulemaking efforts falls on small minority-serving institutions, regional public universities, and institutions serving primarily graduate populations, while resilience is tied less to state funding levels than to strong governance, centralized coordination, and the ability to make difficult systemwide decisions.
- Supreme Court Tightens Contributory Liability in Copyright. Last month, the Supreme Court overturned a $1 billion verdict against Cox Communications, ruling that the internet service provider was not liable for the copyright infringement of its users because it did not intend its service to be used for infringement. The ruling helps clarify liability for institutions that allow third-parties to post content on their websites without institutional review.
Past Editions
Looking for news that first broke in a prior month or perhaps for historical context of a story featured in this article? Links to past editions of CAI Policy Insights are provided below.
