Federal student aid rules, state higher education policy, and workforce development funding are increasingly evaluating academic programs using the same accountability metric: graduate earnings. Recent policies, including Indiana’s 2026 program viability law and the U.S. Department of Education’s Gainful Employment framework, compare graduate earnings to high school graduate benchmarks. Because earnings data can now be measured through administrative wage records covering more than 95 percent of workers, multiple policy systems are converging on this metric simultaneously.

Several recent policy developments indicate that different higher education oversight systems are beginning to rely on the same performance metric: graduate labor market outcomes.

In March 2026, the state of Indiana enacted Senate Enrolled Act 199, which requires public universities to eliminate or restructure degree programs whose graduates fail to meet defined earnings benchmarks. The statute establishes a direct economic viability test for academic programs. Undergraduate programs are classified as low earning if the median earnings of graduates four years after completion do not exceed the median earnings of workers in Indiana with only a high school diploma. Graduate programs fail if their graduates do not out earn workers with a bachelor’s degree.

Programs that fall below these thresholds cannot continue operating without state approval. The Indiana Commission for Higher Education must grant a waiver for programs to remain active, creating a formal mechanism for state intervention in academic program portfolios when graduate labor market outcomes fall below benchmark levels.

Federal student aid oversight is moving toward the same benchmark through the Department of Education’s Financial Value Transparency and Gainful Employment framework introduced in 2023. This federal framework evaluates programs using two outcome measures: debt-to-earnings ratios and an earnings premium test. Under the earnings premium rule, a program fails if the median earnings of its graduates do not exceed the earnings of typical high school graduates in the same state.

Federal guidance explains the policy rationale in explicit economic terms. The Department of Education has stated that the rule is intended to ensure that programs leave graduates “better off than they would be if they had never enrolled,” using the earnings of high school graduates as the comparison baseline.

Workforce policy frameworks have long relied on comparable outcome measures. The Workforce Innovation and Opportunity Act requires states to evaluate training providers using employment and wage indicators, including employment in the second and fourth quarters after program exit and median earnings in the second quarter after exit. Many states also apply explicit eligibility thresholds tied to these metrics. For example, Washington requires training programs to maintain an employment rate of at least 50 percent and median quarterly earnings of at least $5,000 to remain eligible for publicly funded training vouchers.

Federal student aid oversight, state higher education policy, and workforce development programs historically operated as separate governance systems. The evidence above indicates that these systems are increasingly applying the same performance test: whether program graduates earn more than comparable workers without the credential.

Graduate earnings have emerged as a widely used accountability metric because they can be measured consistently across policy systems and verified using administrative data.

Under the Department of Education’s Gainful Employment framework, programs must demonstrate that graduates can manage student debt relative to earnings. The federal rule evaluates programs using a debt-to-earnings calculation in which annual loan payments must not exceed 8 percent of a graduate’s total earnings or 20 percent of discretionary earnings. Programs exceeding these thresholds are classified as high debt burden programs and can lose federal student aid eligibility after repeated failures.

The federal framework also includes an earnings premium test that establishes an explicit earnings floor. The Department of Education calculates the median earnings of workers in each state who hold only a high school diploma and requires that the median earnings of program graduates exceed that benchmark. If graduates do not out earn high school graduates, the program is treated as failing to deliver measurable economic uplift.

Federal guidance describes this benchmark as a minimum accountability standard for programs receiving taxpayer supported student aid. The comparison is intended to determine whether enrollment in a program improves a student’s economic position relative to entering the labor market directly after high school.

The use of earnings metrics has expanded partly because policymakers can now measure them using administrative records rather than voluntary surveys. Graduate earnings can be calculated by matching program completers to federal earnings datasets maintained by agencies such as the Treasury Department, the Internal Revenue Service, or the Social Security Administration. Workforce agencies use similar data infrastructure by linking participants to state unemployment insurance wage records.

Policy analysts studying graduate earnings data note that administrative tax records can capture employment income for more than 95 percent of workers. This coverage allows regulators to construct longitudinal datasets tracking earnings several years after program completion.

Because earnings data are measurable, comparable, and derived from administrative records, multiple policy frameworks are increasingly using them as the central accountability benchmark. Federal student aid rules use earnings to determine whether programs should retain Title IV eligibility. State governments are beginning to use earnings thresholds when deciding whether programs should remain authorized. Workforce agencies rely on the same data to determine which training providers qualify for publicly funded training programs.

The available evidence suggests that what appears to be a fragmented policy environment is gradually converging around a single outcome measure.

The increasing reliance on earnings metrics across multiple oversight systems creates a form of stacked accountability for academic programs.

Many higher education institutions already measure graduate employment and earnings outcomes internally. Public university systems increasingly operate program-level dashboards that combine Census Post-Secondary Employment Outcomes data with state wage records. These dashboards allow institutions to track employment rates and median earnings by academic field several years after graduation.

Some state systems have incorporated these data into public policy infrastructure. The Iowa Board of Regents maintains Wages and Outcomes dashboards that report program-level income and debt outcomes across the state’s public universities. The University System of Georgia operates the Georgia Degrees Pay platform, which allows users to compare expected earnings across majors and institutions using program-level wage data. The Montana University System publishes a Student Success Dashboard showing employment and earnings outcomes by institution, degree level, and field of study.

Although these systems are often framed as transparency tools for students, they also create a policy infrastructure that allows legislators, system boards, and regulators to observe program-level economic outcomes directly.

Evidence from program review practices indicates that institutions already use labor market data when evaluating academic programs. Surveys show that nearly all two-year colleges and a majority of public four-year universities incorporate labor market information into program evaluation, enrollment planning, and curriculum decisions.

In some documented cases, labor market analysis has led to program closures. One institutional review described in research on labor market information found that a college eliminated thirteen programs within two years after reviewing market demand and graduate outcomes.

External policy systems are now beginning to rely on similar information. Federal student aid rules evaluate programs using earnings and debt metrics through the Gainful Employment framework. State governments are beginning to apply earnings benchmarks when determining whether academic programs should remain authorized. Workforce development systems evaluate training providers using employment placement and wage outcomes that determine eligibility for public funding.

Each policy system operates independently and is motivated by different policy goals. Federal regulators focus on student loan repayment and taxpayer accountability. State legislatures often focus on aligning higher education spending with labor market demand. Workforce agencies evaluate training providers based on employment placement and wage outcomes.

Despite these different policy objectives, the performance test applied across these systems is increasingly similar.

For institutional leaders, the implication is that labor market outcomes are shifting from an internal planning metric to an external accountability standard. Academic programs may increasingly be evaluated across multiple regulatory systems using the same question: whether graduates enter the labor market and earn sustainable wages.

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