A recently finalized federal regulation mandates that students entering academic programs burdening graduates with unmanageable debt must now acknowledge a disclosure notice. Starting in 2026, the objective of the new financial value transparency and gainful employment rules is to supply families with enhanced details regarding the expenses and potential risks linked to such programs.

Any graduate and certificate programs deemed “at-risk” will be subject to the new transparency rules. However, the U.S. Department of Education (ED) has reserved the toughest regulations for for-profit training programs, which risk losing access to federal financial aid if standards are not met.

In this article, let’s look at the history of gainful employment rules, what the new regulations mean for graduate health care programs, and how universities can prepare for a climate of increased scrutiny.

The History of Gainful Employment Regulations

ED introduced gainful employment regulations during the Obama administration in 2011. The primary aim was to hold career-training programs accountable for adequately preparing students for gainful employment in recognized occupations without burdening them with unsustainable debt.

These regulations emerged in response to concerns about programs, especially at for-profit institutions, that produced graduates with high levels of student loan debt relative to their post-graduation earnings. Gainful employment regulations stipulated that these educational programs risked losing their federal student aid funds if their graduates had loan payments that exceeded a specific percentage of their discretionary or annual incomes.

Over the years, the implementation of the gainful employment regulations faced several legal and political challenges, leading to delays and modifications. The rules and their enforcement evolved throughout the Obama administration. Later, under the Trump administration, there were efforts to roll back or rescind the gainful employment regulations, and by 2019, ED announced its intention to repeal them entirely.

One of the objectives of the gainful employment regulations was to increase transparency. Even for programs not directly impacted by the potential loss of federal student aid, ED pushed for increased transparency regarding program costs, graduation rates, median debt levels, and employment outcomes.

The New Gainful Employment Regulations

Under the new regulations, programs at both for-profit institutions and non-degree programs across sectors must demonstrate that graduates can manage yearly debt payments and surpass the earnings of non-college-educated adults in their respective states. Failing either criterion for two consecutive years could result in the program losing access to federal financial aid.

The transparency measures require students enrolled in programs leaving graduates with unmanageable debt to sign a disclosure notice. This will be applicable to graduate and certificate programs in any sector, including nonprofit and public institutions. However, these measures do not impact financial aid eligibility and are reserved for “at-risk” programs. ED estimates that approximately 400 graduate programs, with an enrollment of around 120,000 students, will be subject to the new disclosure requirement.

One of the contentious aspects of the new gainful employment regulation, according to its critics, is that the debt-to-earnings ratio test omits degree programs at public and private non-profit institutions, failing to protect the vast majority of students in the United States. Furthermore, several higher education groups are pushing back on the new transparency rules, arguing that the focus on economic outcomes for students fails to accurately measure the value of college programs.

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Considering the Future: Implications for Universities

The ongoing debate about the equitable application and effectiveness of these regulations across diverse sectors continues to spark controversy. Nevertheless, universities find themselves navigating a landscape where government mandates and market dynamics converge, compelling institutional leaders to prioritize the calculation of return on investment (ROI).

Graduate health care education expenses exhibit considerable variation influenced by factors such as institution type (public vs. private), residency status (in-state vs. out-of-state), and institutional brand. Costs, encompassing tuition, fees, books, and living expenses, can surpass $120,000 for the entirety of the program in certain instances.

However, there's reason to be optimistic that high expenses can be mitigated through innovative value-driven program design. Graduate health care programs like those offered by EIM partners demonstrate a favorable ROI because of the high employment demand in the professions, and their robust earning potential. These programs also benefit from hybrid accelerated formats, which allow students to learn from anywhere and expedite their entry into the workforce compared to traditional programs.

For example, the hybrid accelerated Doctor of Physical Therapy (DPT) program offered by EIM partners spans two years, a year shorter than most counterparts. Because of this, students graduate earlier, avoiding tuition payments in the third year while concurrently earning income.

This accelerated pathway significantly enhances the ROI, with graduates from EIM-supported programs accumulating an additional $150,000-200,000 in lifetime earnings over the initial 15 years of their careers due to reduced student debt resulting from an accelerated entrance into the workforce.

Final Thoughts

As universities brace for the impact of new federal regulations on academic programs, it becomes clear that investing in programs that deliver ROI is as critical as shaping a fair regulatory environment in higher education.

One strategy to overcome challenges and add high-value programs can be a partnership with an external organization that helps supplement the substantial resources needed to stand up successful graduate health care programs and offer consultative services for areas like faculty recruitment, clinical education placement, accreditation, curriculum, instructional design, student recruitment, admissions, and much more!

Connect with us today to learn more about how hybrid accelerated education can support graduate growth plans at your institution.