College students in programs like cosmetology, family services and the arts could lose access to both Missouri and federal student aid under proposed regulations.

The federal rules were passed in 2025 as part of the One Big Beautiful Bill Act and recently finished the negotiated rulemaking period in January.

Those rules target “low-earning outcome” programs, or degrees in which graduates do not make more than the median salary of people ages 25 to 34 with only a high school diploma. In Missouri, that earnings threshold is $32,989.

If a program fails to exceed the threshold in two out of the three consecutive measurement years, students enrolled in those degrees will lose access to the William D. Ford Federal Direct Loan Program, which offers both subsidized and unsubsidized loans. 

If at least half of the institution’s Title IV recipients or funds come from failing programs, those programs would also lose Pell Grant eligibility.

On the state level, if passed, SB 1617 would use much of the same standards and data as the federal rules. It would add a penalty that failing programs would be ineligible for state student aid and appropriations. 

Both state and federal sponsors have said that the “low-earning outcome” legislation will hold higher education institutions accountable for poor student outcomes, rein in student debt and address degree inflation.

“Having these ridiculous requirements that people have to have master’s degrees to do something that with a six-month course of training that you could provide, they could be doing this job without $120,000 in debt,” said state Sen. Rick Brattin, a Republican from Harrisonville who sponsored the bill. 

Nationally, about 5% of programs in a preliminary dataset the U.S. Education Department released are expected to fail to meet the earnings threshold, with the majority being certificate programs. In Missouri, 48 of 1,198 programs are expected to fail. 

Others counter that the legislation is a top-down, cookie-cutter approach that doesn’t address the root cause of the issue.

“The issue here is that a college education in the United States, the cost of it has outpaced inflation,” said Mark Jones, the director of public affairs and communications messaging at the Missouri National Educational Association.

“For a vast majority of Americans who go to college, that is a key to better pay over your lifetime, and better and higher economic well-being,” Jones said. “This idea that a small sliver of students and programs are, in their determination, not the right economic choice seems very backwards and very small-scale to solving the real problem.”

Lack of nuance in ‘low-earning outcome’ rules

The primary issue cited by institutions and education experts is the lack of nuance in the data since the threshold is based on a statewide, rolling three-year average.

Brad Curs, a University of Missouri associate professor of educational leadership and policy analysis, noted that averages can be pulled up by a number of factors and don’t necessarily account for the overall economic mobility a degree might provide.

“In looking at averages, it’s not necessarily identifying the students that would have very poor working outcomes,” Curs said. “Now they get this job, maybe it only brings them up to the average of a high school, but they’ve now gone from a minimum wage job to that average wage, which actually could be beneficial for them.”

The three-year timeframe also means that fields with additional licensure requirements or delayed pay growth — like social work, education and health and medical assisting services — can fall below the threshold. 

“The idea that we don’t need social workers because they don’t make as much money is foolish on its face,” Jones said. “More importantly, really, it devalues the work they do and tries to put a dollar figure on it, rather than recognizing how important those folks are to people.”

The complications continue when looking at the calculations for graduate programs where a majority of students are enrolled in the same state as the institution.

Instead of being compared to the median wage of those with a high school diploma, graduate programs are compared to the lowest of three numbers:

• Median earnings of all bachelor’s degree holders in the state.
• Median earnings of those with a bachelor’s degree in the same field of study in the state.
• Or median earnings of all bachelor’s degree holders in the same field of study in the nation.

Northwest Missouri State University Provost Rose Marie Ward said collecting that data could be a pain point when it comes to implementing the state law.

“It’s even more complicated for us to collect that data, because if you think of a standard graduate program, they are fed in from a lot of different bachelor’s degree programs,” Ward said. “I think the Missouri law is going to be challenging to implement for that part without some extra guidance on how we’re going to get those numbers, to make those comparisons, to make that determination.”

‘Unintended consequences’

Supporters have noted that the “low-earning outcome” rules don’t prevent institutions from offering such programs, but federal and state governments would not be financially responsible if students chose to pursue those paths.

“It doesn’t ban these degree programs from being offered,” Brattin said. “You can pay for them if you want to embark in these sorts of studies that fall under this metric. You can pay for it out of your own pocket and get as many degrees as you want, but we’re not going to be the funding mechanism.”

Education experts worry that it will push more students towards private loans that have higher interest rates and no recourse for forgiveness. 

The broad approach could also push people away from enrolling in critical fields if they are deemed low-earning, interim Avila University President Andy Jett said.

“These policies, which are designed to be about accountability and trying to lessen student debt, have these unintended consequences of actually making it so that people don’t want to do those things or can’t do,” Jett said.

Those unintended consequences are likely to affect community colleges and institutions that serve predominantly low-income students with different financial needs. The rules could also have a “double edge” impact on rural schools.

Some people earn less “because they’re staying in the rural areas,” Curs said. “It’s just an average, and you don’t get paid as much as a teacher in a rural area versus if you’re in a city. There’s already sort of a differential there if (a college’s) graduates stay in the rural areas.”

With Missouri already facing worker shortages in health care, social services and education, hits to the programs and institutions preparing such students have increased worries that those shortages could be exacerbated. 

“What happens when you need a nursing tech in a rural hospital or a retirement facility or nursing facility and they’re not there?” Jones said. “You can’t just produce those people overnight. You have to train them, you have to do work and you have to have programs to support them.”

The soonest programs would no longer qualify for federal funding is in 2028, after the second round of official data is released. As for SB 1617, it will move before the full Senate for amendments and debate after the Missouri Senate Education Committee recommended it be passed.

Brattin said the bill is likely to become part of a Senate substitute for a House bill since there are only eight weeks left in the session and filibusters have plagued the chamber.

In the meantime, Jett said that while the legislation is part of an important conversation around the return on investment in higher education, continued regulation must be done with more detail.

“We want to be accountable,” Jett said. “I’m all for putting together these policies that allow us to articulate that and say it out loud, and really make sure that we are spending state funds and federal funds in ways that actually enhance these opportunities. But there has to be much more thought and much more detailed understanding.”