NEWS ANALYSIS

The STATS rule measures a program's graduates against what a Louisiana high school graduate earns four years out. The exposure is narrow, and it is concentrated in the fields the state can least afford to lose.

By Kim M. Braud | August 12, 2026

The federal government has, for the first time, tied a college program's access to student loans to what its graduates earn. On June 29, the U.S. Department of Education issued its final Student Tuition and Transparency System (STATS) and Earnings Accountability rule, published in the Federal Register on July 1. It applies to nearly every program at nearly every institution that touches federal aid, public, private nonprofit, and for-profit alike.

The rule does not ban a single degree. That distinction matters, because the way this has been described online gets it wrong. What the rule does is quieter and, for some Louisiana programs, more consequential: it sets an earnings floor, and a program that falls below it in two out of three consecutive years loses eligibility for the federal Direct Loan program.

For a program where most students borrow, losing federal loans is not a warning. It is closing time.

What the rule actually measures

The mechanism is a single earnings-premium test. For an undergraduate program to pass, the median earnings of its graduates have to equal or exceed the median earnings of working adults aged 25 to 34 who hold only a high school diploma. For a graduate program, the comparison is to adults who hold only a bachelor's degree. The Department calls this a "do no harm" standard: a program passes if its graduates are, on the numbers, no worse off than someone who stopped at the lower credential.

The earnings are real ones, not projections. They are the median earnings of a program's federally aided completers, measured in the fourth full tax year after completion and drawn from IRS records.

The consequences escalate in two stages. A program that fails twice in three years loses Direct Loans. Separately, an institution where more than half of its Title IV dollars or recipients sit in low-earning programs can be placed on provisional status and risk its access to all federal aid, including Pell Grants. The first stage targets a program. The second can reach a whole school.

The rule took nearly 10,000 public comments before it was finalized. It implements the Working Families Tax Cuts Act, the same statute enacted in July 2025 as the One Big Beautiful Bill Act. Both names describe one law. Any account that calls it simply "the 2025 law" is leaving out the part a reader would need to look it up.

The number Louisiana programs have to clear

The floor is not a national figure. The Department calculates it from Census American Community Survey data, and for an institution that enrolls a majority of in-state students, the benchmark is that state's own median, not the country's. Louisiana's public universities generally draw most of their students from Louisiana.

That makes Louisiana's own labor market the yardstick. A bachelor's program at a Louisiana university passes if its graduates out-earn a young Louisianan with a high school diploma and nothing more. In a state with one of the lower wage floors in the country, that benchmark sits lower than it would in California or Massachusetts. The same degree can clear the bar in Baton Rouge and fail it in Boston.

The rule does not ban a single degree. It removes the loans that make some degrees possible.

This is a floor, not a dragnet

The loudest version of this story has been that college degrees are about to start failing en masse. The Department's own economists do not model it that way. In the preliminary analysis its Office of the Chief Economist prepared for negotiators, about 5 to 6 percent of programs fail under the earnings definitions the Department is using, depending on how "earnings" and "working" are drawn. Roughly one program in twenty.

So the Louisiana question is not whether the state has low-earning programs. Every state does. The question is which twenty, and who they serve.

Where the exposure concentrates

The rule judges each program on its own graduates' earnings, so no field is condemned in advance. But early analysis points consistently at the same places, and they are not the places a casual reader would guess.

The University of California, modeling its own exposure, estimated that its potentially affected students cluster in arts and humanities at the undergraduate level, and in education, social work, and fine arts among master's and professional students. Separately, an analysis presented at a July 2026 summit of the National Association of Student Financial Aid Administrators found that undergraduate certificate programs, about 8 percent of enrollment, accounted for 52 percent of students in programs identified as low-earning, while fewer than 4 percent of students overall sat in failing programs.

Read those two findings together and the shape of the risk emerges. It falls hardest on short workforce certificates and on the graduate programs that train teachers, social workers, and artists. Those are precisely the fields Louisiana's regional universities and its historically Black institutions, Southern, SUNO, Grambling, Xavier, and Dillard among them, were built to staff. A program that produces the state's public school teachers is measured against the same earnings floor as a program that produces its welders, and teacher pay in Louisiana is not high.

Critics of the design argue this is a feature of the metric, not an accident. They contend that a benchmark built on raw earnings levels penalizes programs by geography and by the students they serve, rewarding a program that admits already-advantaged students over one that lifts disadvantaged students a longer distance. That is a contested claim, and the Department's defenders answer that a floor tied to a high school diploma is the most modest possible test. Both positions belong in the record. Neither is this newsroom's to settle.

The test catches about one program in twenty. The Louisiana story is which twenty, and who they serve.

What can be checked now, and what cannot

The official failing-program rates will not exist until 2027. But the Department's measure has a close public cousin available today. The College Scorecard's field-of-study earnings figure is drawn from the same population, federally aided completers, measured at the same point, the fourth full year after completion. It is the nearest thing to a preview the rule allows.

That makes a Louisiana estimate a matter of arithmetic, not speculation: take each Louisiana program's fourth-year median earnings from the Scorecard field-of-study file, compare undergraduate programs to Louisiana's high school benchmark and graduate programs to the state bachelor's benchmark, and the programs sitting below the line are the ones to watch when the official rates arrive.

What is next

The Department has staggered the timeline. Most of the rule takes effect July 1, 2027, though the STATS reporting requirements can be implemented early beginning July 1, 2026. The first failing-program rates are expected in 2027, with the first loss of Direct Loan eligibility in 2028. Programs that prepare students for tipped-income work get at least a one-year delay, so their earnings can be measured in the years the new federal tax treatment of tips is in effect.

That runway is the window. A Louisiana program that can see itself approaching the line has until the middle of 2027 to change its outcomes, restructure, or make its case. After that, the arithmetic starts to count.

How to follow this

  • The rule is administered by the U.S. Department of Education. Program-level reporting under STATS begins July 1, 2026; first failing rates are expected in 2027.
  • Louisiana's public postsecondary institutions answer to the Louisiana Board of Regents, which reviews program viability and would manage any state-level response to programs at risk.
  • Institution-level and field-of-study data are published at the College Scorecard data site, last updated June 10, 2026.
  • The full rule and its methodology are in the Federal Register.

Where you can verify this yourself

Kim M. Braud is the Founder & Editor of Evans Cutchmore Press, an independent newsroom covering Louisiana and the Gulf South. Her reporting focuses on government accountability, infrastructure, business, culture, and the public policies that shape communities. Her work combines investigative journalism, public records research, and documentary storytelling.

© 2026 Evans Cutchmore Press. All rights reserved.

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