New Rule Could Limit Federal Loan Access for Certain College Programs
A pending federal regulation might restrict student access to federal loans based on the earning outcomes of specific college programs. According to the rule, undergraduate courses will lose Federal Direct Loan eligibility if graduates earn less, on average, than high school diploma holders in their state after four years. Graduate programs must similarly surpass the earnings of bachelor’s degree holders in the same state.
In Michigan, preliminary data has flagged 16 programs potentially failing this earnings test, while over 1,400 have passed. However, many programs remain unassessed.
Ryan Fewins-Bliss, executive director of the Michigan College Access Network, emphasized the intent behind the rule: “Functionally, they’re trying to make sure that the degree that you’re paying for and they’re using student loans and federal and state aid to pay for it is actually valuable to you in the long run.”
“Making it so that students in the arts and humanities are possibly not able to be eligible for loans, really is setting up a larger class divide… it makes it so that those people who want to study the arts and humanities have to come from means.”
Michael Barnes, Chair of Wayne State University’s Department of Theatre and Dance
Fewins-Bliss expresses concern that such changes may discourage students from pursuing higher education. “Every bit of data, every bit of research says that college will pay off,” he stated. “College is the best way to get into the middle class, the best way to build wealth and assets, to protect yourself, your family, and build your community.”
Federal officials are considering public feedback on the rule, collected until May 20, before finalizing it. The rule stipulates that programs must pass the earnings test for two out of three consecutive years from July 1 to maintain loan access.
Potential Impact on Michigan’s Educational Programs
During the public comment period, a federal dataset highlighted average outcomes for post-secondary programs nationwide. Several arts, counseling, and social sciences programs in Michigan face potential challenges.
The undergraduate programs identified in Michigan include:
- Bachelor’s in drama/theatre arts and stagecraft at Wayne State University
- Bachelor’s in general social sciences at the University of Michigan-Dearborn
- Bachelor’s in rhetoric and composition/writing studies at Calvin University
Community college programs potentially impacted are:
- Associate’s degree in graphic communications at Kalamazoo Valley Community College
- Associate’s degree in fine and studio arts at Delta College
- Associate’s degree in human development, family studies and related services at Delta College
- Associate’s degree in health and medical administration at Delta College
- Associate’s degree in design and applied arts at Henry Ford College
This rule could also significantly affect master’s programs across the nation, especially in the arts. The New York Times analysis indicated that close to half of visual arts, music, and performance programs might not meet the earnings criteria.
The flagged Michigan master’s programs include:
- Master’s in fine and studio arts from Cranbrook Academy of Art
- Master’s in historic preservation and conservation from Eastern Michigan University
- Master’s programs in dietetics and clinical nutrition services from Eastern Michigan University and Andrews University
- Master’s programs in music from University of Michigan-Ann Arbor and Western Michigan University
- Master’s in clinical counseling and applied psychology from Michigan School of Psychology
- Graduate certificate in human resources management and services from Davenport University
Fewins-Bliss warns that losing loan access could be catastrophic for these programs. “Eventually, if the federal government rules that a program can’t take student loan dollars, it will functionally shut down,” he said. “We just don’t have the infrastructure, the financial wherewithal to hold those programs up. So those institutions are going to be doing everything they can to make sure those degrees are valuable.”
Michael Barnes of Wayne State University, whose theater program is flagged, argues that arts education offers more than financial returns. He believes the skills cultivated in such programs are widely applicable.
“Judging students’ success solely by monetary income I think is such a horrible way to look at things,” Barnes noted. “It could be that they go out into the world and they connect with their community and build their community up versus making $500,000 a year.”
Barnes also fears that restricting arts program access to students of means could hinder the diversity and quality of future artists.
Concerns Among Michigan Educational Leaders
Despite not being overly worried about most programs, Michigan education leaders express concerns about the broader implications of these loan regulations. Colby Cesaro, vice-president of Michigan Independent Colleges and Universities, highlighted that master’s programs in teaching might struggle in states with lower teacher salaries. Cesaro also urged vigilance among Michigan institutions, noting the potential impact of changing teacher compensation.
Mia Murphy, chief policy officer at the Michigan Association of State Universities, emphasized the need to address the implications of linking student loans to market conditions, particularly for essential but lower-paying fields like teaching and social work.
“What do we do with a market failure?” Murphy questioned. “What do we do when some areas are associated with low salaries, but they’re also vital for daily life?”
