Changes in College Accountability in 2025 Spending Act

The One Big Beautiful Bill Act (the Act), enacted in July of 2025, introduced a significant shift in the accountability methods to be used by the Federal government to monitor and regulate colleges. The purpose of the new methods is twofold: 1.) To foster the gainful employment of college graduates, and 2.) To assure a positive return on the investment needed to earn a degree or certificate. Under the new Act, colleges have a financial incentive to offer majors and programs that lead to satisfactory earnings for graduates and to discontinue those that do not. The Act’s impact on students, borrowers, and colleges will be far-reaching, affecting college admissions and affordability for the foreseeable future.

New Accountability Standards

The new standards are the centerpiece of a new college accountability framework. They establish a “do no harm” mindset to ensure that a college degree or certificate actually leads to higher earnings than does a high school diploma. However, the discontinuation of existing accountability framework will make it difficult for defrauded students to obtain relief, leaving them with limited protection against predatory practices.

The Act adds accountability requirements that apply to all Title IV post-secondary schools that receive Federal dollars on behalf of undergraduate, graduate, professional, or certification students. If a college’s majors and programs do not meet the new earnings premium tests for two out of three consecutive years, they will forfeit access to Federal student loan and Pell Grant funds, the loss of which may force them to shut down.

The new earnings tests measure:

• Undergraduate Programs:Median earnings of college graduates currently  working must exceed the median earnings of students in the same state between 25 to 34 years old with only a high school diploma.

• Graduate Programs: Median earnings of graduates must exceed the median earnings of bachelor degree holders in the state in that field.

The Act places transparency requirements directly on the college. If a major or program fails the earnings test for even one year, the college must:

• Notify enrolled students that the major/program has low earnings outcomes.

• Warn students that the major/program is at risk of losing Federal eligibility.

Below are summaries of other aspects of the new accountability standards:

1. “Workforce Pell” Quality Metrics

 The Act expands Pell Grant eligibility to short-term job training programs between 8 and 15 weeks long. These certificate programs are held to stricter accountability standards than they have been traditionally:

• Completion and Placement:Programs must maintain at least a 70% completion rate and a 70% job placement rate.

• Earnings Increase:The tuition and fees of the program cannot exceed the earnings premium, defined as the amount graduates earn above the poverty level, within three years of completion.

2. Direct College Control Over Borrowing

 In a major shift in authority, the Act now allows colleges to lower annual loan limits for specific majors and programs. Previously, colleges had to allow all students to borrow up to the Federal maximum in loans. Now, if a college identifies a major/program as having poor outcomes or high debt-to-income ratio, they can cap the amount of the Federal debt students in that major/program can take on, as long as the limit is applied consistently to all students in that program.

3. Increased Data Transparency and Reporting

 The Act uses the existing data framework but makes the data more consequential. Colleges are now required to report detailed program-level data, including:

• Total Cost of Attendance (COA), including tuition, fees, books, etc.,

• Median debt levels of degree or certification completers, and

• Post-graduation earnings data.

Regulations covering data transparency and reporting are being finalized, with full implementation planned to begin in 2026–2027. Until then, implementation will be guided through negotiation with the U.S. Education Department (ED).

4. Colleges Prepare to Transition

 To conform to the Act, many colleges are taking some or all of the following actions:

Restructuring Majors:

• Combining small departments
• Creating career pathways
• Cutting low-earning programs

Changing Admissions:

 More selective in risky fields

• Fewer seats in arts and education
• More STEM and business seats

Reworking Curricula:

• Adding internships
• Employer partnerships
• Job placement tracking

Shifting Financial Aid Strategies:

 Using institutional aid to protect vulnerable programs

• Steering students toward safe majors

 Safest Majors

 The new accountability rules will affect majors differently. Some majors will carry more risk of being discontinued than others, so applicants should research the chances that their intended major at target schools will be discontinued due to poor postgraduate earnings performance. Switching to another major or program midstream is an avoidable stumbling block in a student’s college education.

College majors are divided below into low, medium, and high risk based on the likelihood that postgraduate earnings of student will pass the earnings test.

Low-Risk:

 Engineering

• Computer Science
• Nursing
• Accounting
• Supply Chain/Logistics
• Actuarial Science
• Data Analytics

Medium Risk:

• Psychology
• Biology
• Communications
• Political Science
• Sociology

High Risk:

• Education
• Social Work
• Music/Theater/Fine Arts
• Philosophy
• Religious Studies

Summary

While the Act doesn’t directly overhaul the college admissions process, it does tie aspects of a college’s Federal aid eligibility to postgraduate earnings outcomes are depend on the quality of that college’s education.