Top 6 Things to Know About the Do No Harm Earnings Test

The reporting transition is already underway

The reporting work is already underway, even though the funding consequences are still years off. Institutions must submit Financial Value Transparency and Gainful Employment (FVT/GE) data for the 2026 reporting cycle by October 1, 2026, covering the 2025–26 award year. For this cycle, institutions can choose to early-implement reduced reporting requirements under the new STATS framework by leaving out certain data elements that are now optional.

Institutions that do not early-implement must continue meeting the full FVT/GE reporting requirements through June 30, 2027. The new rule takes effect July 1, 2027, and beginning in 2028, the Department says its annual published data will be based solely on the STATS collection.

There is a warning system built in, too. Once the Department determines that a program's next earnings result could make it ineligible for Direct Loans, the institution must warn current and prospective students.

Some programs get a delay, and there are a few narrow exceptions

Certain programs preparing students for occupations where tipped income is common will receive delayed treatment while federal earnings data catches up with the “No Tax on Tips” policy. If a qualifying program's calculation would rely on earnings from tax year 2025 or earlier, it will not receive a passing or failing result for that year, although the Department will still publish its earnings data.

There is also a narrow exemption for programs at institutions that enroll only students with a documented Specific Learning Disability or Autism. Those programs are exempt from the earnings accountability provisions.

Other exceptions apply specifically to the potential loss of broader Title IV aid. Institutions that have not participated in the Direct Loan program during the five most recently completed award years are protected from that automatic consequence. After a program's first failing result, an institution may also be able to agree to prevent students in that program from borrowing Direct Loans for at least five years, subject to Department requirements, while preserving access to other Title IV aid.

Appeals are narrow, and better local data won't necessarily save a program

Institutions can appeal a low-earning outcome determination, but they have 30 days to do it, and the grounds are limited to errors in the Department's calculation.

That could mean the wrong students were included in the completer cohort, the wrong earnings threshold was selected, or the program's median earnings were compared with that threshold incorrectly. The Secretary can establish additional bases for appeal, but the rule does not create a general opportunity for institutions to substitute their own evidence of graduate success for the federal calculation.

So an institution may have compelling graduate surveys, state wage records, licensure outcomes, or employer data. Those can be valuable for program strategy, but they are not, on their own, grounds to overturn the federal earnings result.

Graduate programs face a more tailored earnings benchmark

The undergraduate test is relatively straightforward. Most undergraduate programs are compared with the median earnings of working 25-to-34-year-olds in the institution's state who have only a high school diploma. If fewer than half of the institution's students come from that state, the national high school earnings benchmark is used instead.

Graduate programs have a more tailored comparison. At an institution where at least half of students come from the institution's state, a graduate program is measured against the lowest available benchmark among:

• statewide earnings for working adults with only a bachelor's degree;
• statewide bachelor's-level earnings in the same field of study; or
• national bachelor's-level earnings in the same field of study.

If fewer than half of the institution's students come from its home state, the benchmark is the lower of the national bachelor's-degree earnings figure or the national same-field bachelor's-degree figure.

Program earnings themselves are based on the median annual earnings of included completers, measured in the fourth tax year after completion.

The earliest a program can lose Direct Loan eligibility is the 2028–29 academic year

This is not an immediate funding cutoff. The Department has said the first earnings test will apply to the 2027–28 award year. A program that fails in both 2027 and 2028 could therefore first be designated a “low-earning outcome program” beginning in the 2028–29 award year.

A single failure still matters. It can trigger student warnings and gives institutions an early signal that the next result may carry consequences. But a program becomes a low-earning outcome program only after failing the earnings test in two of three consecutive years for which the measure is calculated.

That gives institutions some runway. It also makes the next two academic years an important window for programs already concerned about graduate earnings.

Pell eligibility can be affected, but the trigger is institution-wide

Losing Direct Loan eligibility is a program-level consequence. Pell Grants and other Title IV aid work differently.

Under the new administrative capability standard, an institution must be able to show that at least half of its Title IV recipients and at least half of its total Title IV funds are associated with programs that are not classified as low-earning outcome programs.

If the institution fails that standard in two of three consecutive award years, its low-earning outcome programs can lose access to all Title IV aid, including Pell Grants.

That distinction matters. A program does not automatically lose Pell simply because it repeatedly fails the earnings test. The broader Title IV consequence depends on how much of the institution's federally aided enrollment and funding is concentrated in low-earning programs.