What’s Learning Worth?: On The U.S. Higher Ed “Earnings Test”

You borrow $40,000 to buy a product advertised to help your career. You hope your salary increases. It doesn’t. Instead, you’re gifted years upon years of loan repayment. This is the false bill of goods the U.S. Department of Education (ED) suggests masses of American college students have been sold.

So, on July 1st, ED enacted its Student Tuition and Transparency System (STATS) and Earnings Accountability final rule for postsecondary degree programs. To pass this “earnings test,” a degree-issuing program must demonstrate its students earn more than non-degree-holding peers in two out of three award years. This is calculated by comparing median earnings of degree-holders four years post-graduation with that of non-degree-holding “working adults aged 25-34.” For example, if Bryn has a master’s degree, Taylor a bachelor’s degree, and Avery a high school diploma, then Bryn’s financial return ought to be higher than Taylor’s, and Taylor’s higher than Avery’s.

Passing the earnings test ensures a program’s students remain eligible for direct federal loans. Failing “consistently” for three years, however, enables the Department to flag a program as a “low-earning outcome” and terminate its Title IV eligibility. Citing the nation’s $1.83 trillion in outstanding student loans, Secretary of Education Nicholas Kent rationalizes, “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 goal seems straightforward: protect students’ finances, and hold institutions accountable. However, until now, legislation didn’t use earnings potential as a sole determinant for which kind of learning was most worth supporting. In doing so, this policy leaves Americans with an unprecedented verdict: access to education is justified by the government’s assessment of its financial promise.

In several fields, however, monetary reward has never been an honest metric of industry value. Per the U.S. Bureau of Labor Statistics, pre-school and kindergarten teachers’ median earnings fall at $840 per week, with those of social workers and mental health professionals between $1,120 and $1,426. All require a four-year degree, even a master’s. By contrast, the myriad bachelor’s-only professions within computer & mathematics ($2,015) or architecture & engineering ($1,930) average at least a salary-and-a-half more than a substance abuse counselor ($1,120) with an advanced degree.

Even if the counseling program’s graduates earn more than their average masterless peers, the earnings test nonetheless reframes the value of the credential. That is, despite their “essential” status, the low earnings potential for careers like teaching and counseling can be used to further relegate them as labor not worth doing. When programs live or die by the heft of their graduates’ paychecks, then the dignity in pursuing the fields they represent is questioned.

This revaluation is a well-trod path beyond the U.S. Just last month, the BBC reported the University of Exeter’s proposal to reduce 150 full-time roles. “These cuts represent an existential threat to humanities and social science disciplines at Exeter,” states the Exeter’s University and College Union, petitioning against the reduction with over 35,681 signatures.

Perhaps you didn’t like art, history, or English and managed to employ yourself without use of the rule of thirds or semicolons. Nevertheless, beyond paychecks or even passion, there exists value in both your own (higher) education and amongst those with access to it, too. Those who live, work, and think alongside you are people whose judgment, actions, and preferences (whether you agree with them or not) will impact your own lived experience.

At least sixty years ago, American legislation identified academic enrichment as a self-justifying aim. In section 401, the 1965 Higher Education Act (HEA) states its purpose “to assist in making available the benefits of higher education to qualified high school graduates of exceptional financial need.” Though education’s “benefits” go undefined, this does not mean there weren’t any in mind; mid-century social and economic concerns, such as combating discrimination and poverty, remain wrapped up in today’s language of equal opportunity and education.

The 2024 Financial Value Transparency (FVT) and Gainful Employment (GE) regulations further corroborate these intrinsic value claims. Despite the FVT/GE’s purpose as financial accountability measures — the ones to be replaced by the earnings test, in fact — they introduce themselves with acknowledgement of postsecondary schooling’s “myriad non-financial benefits,” enumerating the following:

“Increasing the number of individuals with postsecondary education creates social benefits, including productivity spillovers from a better educated and more flexible workforce, increased civic participation, improvements in health and well-being for the next generation, and innumerable intangible benefits that elude quantification.” 

As back-to-school approaches, turn your heart to the innumerable, intangible, and unquantifiable, to the departments, professors, and peers you hold dear. How do you memorialize your own learning? By what metric do you measure the value of your coursework? Who should get to decide what that education was worth?

The first earnings test will be calculated in early 2027; the Department of Education is all too willing to answer for us.