IHEP Report Shows How Colleges Fare on 2 Earnings Tests

A new analysis from the Institute for Higher Education Policy found that while most programs that prepare students for public service jobs such as teaching will pass the new federal earnings test, they don’t fare as well once the cost is factored in.

For example, all bachelor’s-level education programs pass the federal test, which compares their graduates’ earnings to adults with only a high school diploma. But only 65 percent pass Threshold 0, a value metric from the Postsecondary Value Commission that gauges whether graduates earn more than the median earnings of high school graduates and enough to pay off the net cost of their program within 10 years.

The analysis, released last week, included about 40,000 undergraduate programs. IHEP also released an online dashboard with more information about program outcomes. Over all, 93 percent of programs passed the federal earnings test, which Congress created in 2025 as part of the One Big Beautiful Bill Act, and 82 percent passed Threshold 0.

Daniella Paradise, a research analyst at IHEP, said the lower pass rates for Threshold 0 and the federal earnings test reflect “an affordability issue, and that is where I think we need to turn our attention to next.”

Paradise also stressed the need to evaluate the value of a college credential holistically when possible. So, the report also looked at other factors of value such as whether graduates have access to employer-provided benefits like health care and their satisfaction with the compensation, pulling data from a longitudinal study. Students in public service careers reported higher access to benefits compared to other fields. However, just over half of students in education programs said they were satisfied with their compensation. 

“Access to benefits is not going to pay the rent, and it’s not really enough to fully offset the fact that these folks are earning less than others,” Paradise said.

IHEP called on policymakers to boost the Pell Grant and for states to make greater investments in higher education in order to make college more affordable for students, among other recommendations. The organization also wanted the Education Department to reinstate and expand longitudinal studies “that provide information about the nonearnings benefits of higher education.”

Paradise added that when the data from the federal earnings test comes out in the coming years, it will be important to shift the discussion to how programs can improve their performance.

“The central thing that we want people to take away from this report is the fact that the … threshold is just a start,” she said. “It is not a finish line.”