Student loan accountability starts with a very simple principle: a loan is a financial transaction, and the likelihood that it will be repaid should matter when the loan is made.
We already accept this principle almost everywhere else in finance.
If I want to borrow $500,000 to buy a house, a bank will examine my income, credit history, existing debts, down payment, and the value of the property. The bank doesn’t lend simply because owning a house would make me happy.
The same applies to a car loan or a business loan. The lender asks an obvious question: Is there a reasonable expectation that this money will be repaid?
Why should education lending be completely divorced from that question?
What the New Student Loan Accountability Rule Does
In 2026, the U.S. Department of Education finalized its Student Tuition and Transparency System (STATS) and Earnings Accountability rule.
Beginning in 2027, undergraduate programs will generally have to demonstrate that their graduates’ median earnings exceed an earnings benchmark based on working adults with only a high-school diploma. Graduate programs face a corresponding benchmark based on bachelor’s-degree holders.
A program that fails the earnings test in two out of three award years can lose access to the federal Direct Loan program for at least two years.
That distinction is important. The government isn’t declaring that music, social work, theology, or any other subject is worthless. Nor does the rule automatically eliminate federal loans for everyone studying a particular major.
It evaluates program outcomes.
That is a much more defensible principle: if taxpayers are financing education through government-backed loans, the economic results of those programs should at least be visible and relevant to whether additional federal credit is extended.
Student Loans Are Riskier Than Car Loans
There is another reason student lending deserves careful scrutiny.
A mortgage is secured by a house. An auto loan is secured by a vehicle. If borrowers stop making payments, lenders can potentially repossess and sell those assets.
There is no comparable collateral behind a college degree.
A lender cannot repossess four years of sociology classes.
That doesn’t mean education has no value. It means that educational value and collateral value are different things.
From a lending perspective, that makes the borrower’s future ability to generate income particularly important.
10 Majors Associated With Low Early-Career Earnings
We should be careful with the phrase “degrees that can’t repay their loans.” Whether someone can repay depends on tuition, the amount borrowed, interest rates, income, repayment terms and many other factors.
But earnings vary enormously by major.
Georgetown University’s Center on Education and the Workforce analyzed U.S. Census Bureau data for full-time, full-year workers and found numerous bachelor’s-degree majors with relatively low median earnings among recent graduates.
Here are 10 examples from that research:
- Zoology — $37,000. Graduates have relatively low early-career earnings, although Georgetown reports substantially higher median earnings later in their careers.
- Counseling psychology — $38,000. A bachelor’s degree may also be only the beginning for students pursuing occupations that require graduate education or professional credentials.
- Communication disorders sciences and services — $39,000. Another field in which additional education may be necessary for certain professional careers.
- Theology and religious vocations — $40,000. Religious education may have enormous personal or spiritual value while producing comparatively modest financial returns.
- Studio arts — $40,000. Artistic careers can produce highly variable incomes, and many graduates face relatively modest earnings early in their careers.
- Drama and theater arts — $41,000. Creative careers often have uncertain employment patterns and can take time to develop.
- Human services and community organization — $41,000. These occupations can provide important community services while paying comparatively modest salaries.
- Visual and performing arts — $42,000. The economic payoff can vary considerably depending on occupation, location and individual success.
- Music — $42,000. Professional musicians can have highly variable earnings, including self-employment and multiple sources of income.
- Social work — $43,000. Social work provides services that many communities consider important, but its early-career compensation is relatively low.
These numbers should not be interpreted as saying that nobody should study these subjects. They illustrate something much narrower: the financial return on different educational choices can differ dramatically.
Georgetown’s research also shows why simplistic conclusions should be avoided. Some low-paying majors experience substantial earnings growth later, and college graduates overall still earn considerably more than high-school graduates at the median.
What About the Highest-Paying Degrees?
At the other end of the spectrum, some college majors produce remarkably strong financial returns. According to Georgetown University’s research, petroleum engineering, chemical engineering, and computer engineering are among the highest-earning bachelor’s degrees, with median earnings for prime-age workers of approximately $146,000, $120,000, and $119,000 per year, respectively. These degrees generally lead to specialized, high-demand careers and illustrate why the financial value of a college education depends heavily on what and where you study. Borrowing $50,000 for a degree associated with six-figure earnings presents a very different lending risk from borrowing the same amount for a program whose graduates typically earn $40,000. This doesn’t make engineering intellectually or socially “better” than art, music, or social work; it simply makes the expected financial return—and therefore the ability to service educational debt—very different.
Valuable Work Is Not Necessarily a Good Investment at Any Price
This distinction gets lost in the student-debt debate.
Something can be socially valuable without being financially valuable enough to justify an unlimited amount of borrowing.
Social workers perform important work. Teachers educate children. Musicians create culture. Religious scholars study questions human beings have considered for thousands of years.
None of that tells us whether borrowing $20,000, $80,000 or $150,000 for a particular credential is financially sensible.
The question isn’t whether the subject has value. The question is whether the education is worth its price.
A $15,000 degree leading to a $45,000 salary presents a very different financial proposition from a $150,000 degree leading to the same salary.
You Don’t Need to Borrow Money to Learn Everything You Love
I personally love history and philosophy.
Fortunately, I don’t have to borrow tens of thousands of dollars to study either one.
Today I can read classic philosophy, university lectures, historical archives, academic papers, library books, podcasts and educational websites. Hundreds of opportunities exist to study these subjects independently for little or no money.
The same principle applies to religious studies, gender studies, literature, music history and countless other subjects.
People should be free to pursue knowledge simply because they love it.
But the freedom to study something and an entitlement to government-backed financing for it are two different questions.
What About Private Student Loans?
Students who cannot obtain federal financing for a particular program could potentially seek private financing, although approval is not guaranteed and private loans generally lack some protections available with federal loans.
A private lender has its own money at risk.
Consequently, lenders have an incentive to examine creditworthiness and repayment risk. When lenders perceive greater risk, they may demand a higher interest rate, require a cosigner, lend less money—or decline the loan altogether.
Those restrictions can feel harsh, but they also communicate information.
If nobody is willing to finance a $150,000 education without substantial compensation for risk, perhaps the problem isn’t merely the lender. Perhaps the price of the education deserves scrutiny too.
But What About an 18-Year-Old Borrower?
One argument against this approach is that young students cannot reasonably understand the long-term consequences of taking on substantial debt.
Young borrowers certainly deserve clear information about tuition, graduation rates, expected earnings and likely monthly payments before signing anything.
But adulthood must eventually include financial responsibility.
At 18, Americans can sign contracts, work, rent apartments and make many consequential decisions. We should educate young people about debt rather than pretending that debt is an incomprehensible concept.
Borrow $40,000 and you owe $40,000 plus interest.
That should be explained plainly before the loan is signed.
The Strongest Objection to Earnings-Based Accountability
There is a legitimate criticism of earnings tests that deserves consideration.
Salary is not a perfect measurement of educational value.
Teachers, artists, social workers and nonprofit employees may produce substantial benefits that aren’t reflected in their paychecks. Earnings also change over a career, and Georgetown’s research shows that some majors with low starting salaries experience considerable income growth later.
There is therefore a danger in treating salary as the only measure of education.
But student loan accountability doesn’t require society to declare that low-paying work is worthless. It requires policymakers to confront a narrower financial question:
When should taxpayers finance that education with loans?
The answer is never. The same way that taxpayers shouldn’t finance the purchase of a house/car, they shouldn’t finance someone’s bad fianancial decision when it comes to student loans.
Debt Is Debt
America’s student-debt problem developed over decades, and no single rule will solve it.
But there is a useful principle at the heart of student loan accountability:
Borrowing for education is still borrowing.
Education can enrich your mind, expand your horizons and introduce you to ideas that change your life.
None of those benefits erase the arithmetic of debt.
Students should remain free to study art, theology, music, philosophy, gender studies, social work—or practically anything else they choose.
The harder question is who should finance that decision and under what conditions.
When taxpayers are ultimately supporting a lending system, asking whether graduates of a program earn enough to justify continued government-backed lending isn’t a judgment about the worth of knowledge.
It is a judgment about financial risk.
And financial risk should matter whenever somebody asks to borrow money.
Frequently Asked Questions
Does the new rule ban low-paying college degrees?
No. It establishes earnings tests affecting eligibility for federal Direct Loans. Students remain free to study those subjects, and schools remain free to offer them.
Does a low-paying major automatically lose federal student loans?
No. The rule evaluates specific educational programs and their graduate earnings rather than simply publishing a blacklist of majors. Programs generally face consequences after failing the applicable earnings benchmark in two of three award years.
Are low-earning degrees always bad investments?
No. Cost matters enormously. A relatively inexpensive degree leading to modest earnings can be financially sustainable, while an extremely expensive degree producing the same income can create serious repayment problems.
Why consider earnings when making student loans?
Because loans ultimately have to be repaid. Earnings provide one measure—though not the only measure—of whether graduates are receiving enough financial return from an educational program to support borrowing.
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