Department of Education and Capitol Hill Announces Final Rule on Earnings Accountability
Overview
Just moments ago embargoed press releases from the U.S. Department of Education (us.list-manage.com/z5L_c0nmYaC?e=05bce952ad&c2id=828e2f13ae2569477ba2b7da4ef30812) and the House Education and Workforce Committee (us.list-manage.com/g8AaWFtZPXw?e=05bce952ad&c2id=828e2f13ae2569477ba2b7da4ef30812) announced the publication of the final rule establishing the regulation for the last in a series of regulatory revisions implementing the One Big Beautiful Bill Act (a.k.a. The Working Families Tax Cut Act).
Key aspects of the Department’s press release are noted below.
Major Changes to the Final Rule, Compared to the Notice of Proposed Rulemaking:
Delay of Select Provisions: The Department will delay implementation of the program eligibility consequences for certain programs that prepare students for employment in occupations where a majority of workers receive tipped income, in order to use reported earnings from the tax years when the “No Tax on Tips” policy is in effect, which begins with the 2026 tax year. This change results in at least a one-year delay in the rule’s eligibility consequences for affected programs.
Program Exemptions: In the final rule, the Department exempts an institution from the automatic loss of Title IV eligibility if the institution does not currently participate in the Direct Loan program and has not participated in the Direct Loan program for the five most recently completed award years.
In addition, under the final rule, the Department also exempts a program from automatic loss of Title IV eligibility if the program is not yet determined to be a low-earning outcome program and the institution and the Department agree to amend the institution’s program participation agreement to prevent students from borrowing Direct Loans for the program for at least five years.
What’s Next
CSPEN will waste no time starting to review the final rule and provide a more in-depth review, summary and analysis in the days ahead, but wanted to provide this highly anticipated information and release immediately.
More to follow.
