Student Tuition and Transparency System - Coming July 2027

One of the biggest questions when a potential college student is selecting a major is the end goal - what kind of salary can they expect when they complete this program, and will their earnings with this degree outpace their earnings if they just stayed in the workforce instead? New federal regulations are looking to answer this question once and for all with the new STATS - Student Tuition and Transparency System and Earnings Accountability rule.

Summary

All colleges and universities, for the first time, will be required to prove that graduates of undergraduate programs (two-year and four-year programs) earn more than a typical 25-34 year old with a high school diploma. They will also be required to prove that graduates of graduate programs (masters and doctoral programs) earn more than a typical 25-34 year old with a bachelor's degree. The penalty for programs that do not meet this standard in two out of three years is they will not have access to the federal Direct Loan program. In the 23-24 school year, $88 billion was given out in federal Direct Loans to 88.5% of public institutions, with about 1 in 3 students using those loans. Few programs will be able to withstand a 33% drop in enrollment for long, potentially causing widespread changes in degree offerings. This affects everyone, from colleges to students to employers.

Overview: College Rules

The first deadline for colleges just passed on October 1, 2026. This was to report the last two years of data. Moving forward, one year of data will be due each October 1st.

STATS requires program-level reporting on:

• ·Tuition and fees for the program
• ·Institutional grants and scholarships awarded
• ·Private grants and scholarships awarded
• ·Student enrollments by program
• ·Program completions (degree, certificate, or credential awarded)
• ·Programmatic accreditations held
• ·State licensure compliance information where relevant

The earnings data required will not come from the institutions. IRS records will be pulled of graduates, along with Census Bureau benchmark data to compute the Earnings Premium - the calculation if the person with the degree earned more than their peer without an equivalent degree.

What if a program fails the Earnings Premium?

As mentioned above, the largest penalty is students losing the ability to pay with federal Direct Loans for two years. With this being about 1 in every 3 students, this can cause widespread program changes and closures. However, the program itself can continue - students can self-pay, use state aid, and colleges can continue to give institutional scholarships. After the two years is up, the program can earn Title IV eligibility again, but programs will still need to meet the Earnings Premium.

Is there an appeals process?

Many who work in higher education know that sometimes all it takes is finding the loophole to keep programs running, and that was factored into this change - appeals will only be permitted if there was an error in calculating the Earnings Premium. That will mean this pathway is limited for programs to keep Direct Loan funding. For example, a program will not be able to argue that their rural location keeps wages lower than if a student moved to a more metropolitan area. They will also not be able to debate the students captured in each cohort, nor will they be able to debate the comparison for each program, such as whether a high school diploma or an associates degree is used. This will limit the endless litigation that can come with rule changes, as well as help students and employers know these programs meet the Earnings Premium measure.

What can colleges do to mitigate this process?

Colleges need to identify which programs may be failing the Earnings Premium and work on improvements NOW, before Direct Loan funding is lost. Once programs are identified, one of the most important groups to loop into the conversation is Career Services, who are often left out of institutional data and compliance conversations. To learn how Coyne Workforce Solutions can assist you contact Dr. Mildred G. Coyne at mildred@coyneworkforce.com.