Gainful Employment Do No Harm Proposed Regulation

Summary of the Gainful Employment and the “Do No Harm” Proposed Regulation

Background on the Proposed Regulation

In July 2025, Congress passed – and the President signed – the One Big Beautiful Bill (OBBB). For the first time, the bill applies an earnings-based accountability test, known as the “Do No Harm” standard, to programs at institutions of higher education.

Congress explicitly limited this earnings test to degree programs only. However, when the Department of Education (ED) drafted the proposed regulation to implement the law, it expanded the test to include all programs, including non-degree and certificate programs.

Under the proposed rule, beginning July 1, 2026, all undergraduate and non-degree programs would be evaluated based on the earnings of their graduates. To pass, a program’s median graduate earnings must exceed the median earnings of individuals who completed high school only.

Douglas Education Center, like any responsible institution, fully supports regulations that hold schools accountable and protect students. However, the earnings metric used in this proposed rule is fundamentally flawed and does not accurately reflect student outcomes or the value of career education.

Key Problems with the Earnings Metric

1. Inaccurate Comparison Group

The rule relies on the American Community Survey (ACS) to determine “high school only” earnings. However, the ACS includes individuals who hold postsecondary certificates and diplomas, which inflates the reported earnings of the high-school-only population and skews the comparison.

2. Unequal Career Timelines

The metric compares the median earnings of postsecondary graduates four years after program completion to high-school-only earners aged 25–34, who are typically 7–16 years into their careers. This comparison places postsecondary graduates at a clear disadvantage, as they are much earlier in their career trajectory. For professions such as cosmetology and massage therapy, a comparison period of 6 to 17 years after completion would be far more realistic, as graduates need time to build clientele, reputation, and income.

3. Unrealistic Full-Time Work Assumption

The metric assumes all graduates work 40 hours per week. This does not reflect reality, particularly in female-dominated professions such as cosmetology and massage therapy, where many graduates choose part-time work to care for children and families. The rule also fails to account for gig-based work common in entertainment and creative industries.

4. Underreported and Tip-Based Earnings

Industries that depend heavily on tips or self-reported income show artificially low earnings in federal data sources. As a result, programs preparing students for these fields fail the metric at disproportionately high rates, even when graduates earn a sustainable living.

5. Failure to Account for Geographic Differences

The proposed rule relies on statewide earnings data, despite significant wage differences within states. Earnings can vary dramatically between urban, suburban, and rural areas, making statewide averages misleading and unfair for many programs.

Impact on Student Choice and Long-Term Outcomes

The proposed regulation threatens student choice by removing access to federal financial aid for programs students want to pursue. This ignores several important realities:

• • • Long-term earnings potential: Many careers have modest earnings early on but significant growth later.
    1. Cosmetology: Graduates salaries start lower in the beginning and grow as their reputation and clientele increase. Early-career earnings do not reflect long-term sustainability or success.
    2. Massage Therapy: Earnings grow as therapists build a loyal client base, specialize in high-demand modalities, etc. Early-career earnings do not reflect long-term sustainability or success.
    3. Special Make-Up Effects and Entertainment Fields: These careers are frequently project-based, freelance, or seasonal. Professionals often supplement income through multiple contracts, union work, or related creative roles. Early federal earnings data rarely captures the full scope or growth potential of these careers.
  • • Non-wage economic benefits: Some careers provide substantial indirect benefits. Hospitality and hotel management graduates may receive housing, meals, and utilities as part of their employment, benefits not captured in earnings data.
    • Personal and societal value: Some fields — such as theology or social work — are chosen for their meaning and societal impact, not income. Students entering these professions understand the earnings expectations but value the work and service they provide.

Why This Matters

By relying on a flawed earnings metric, the proposed rule would cut off financial aid for many programs that serve students well, support local economies, and meet workforce needs. Once financial aid is removed, many programs would be forced to close — not because they failed students, but because the metric failed to measure their value accurately.