Education Department replaces debt-to-earnings metric with earnings premium for higher education a
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The Department of Education has finalized rules that replace the old debt-to-earnings (D/E) metric with a new measure called the “earnings premium.” This change implements amendments to the Higher Education Act made by recent tax legislation. The new system focuses on how much more students earn compared to those who did not attend college, rather than just comparing their loans to their income.
Why it matters: This rule shifts how the government holds colleges accountable for student outcomes. By focusing on the earnings premium, the Department aims to incentivize institutions to offer programs that provide clear economic value. It also expands transparency so students can better compare the actual cost and return of different degrees before enrolling. While it applies broadly to Title IV programs, the immediate impact is largely administrative as schools adjust their reporting systems.
Who it affects
- Colleges and universities receiving federal student aid
This final rule was issued by the U.S. Department of Education, Office of Postsecondary Education; readers should verify details against the full text at www.regulations.gov/docket/ED-2026-OPE-0100 before relying on it for compliance purposes.
Agency: Education Department
Source: Federal Register — read the official document