U.S. — The Education Department finalized a new accountability rule last week that ties federal student loan eligibility to graduate earnings. Under the new rule, college programs must demonstrate that their students earn more than an adult with only a high school diploma to maintain eligibility for federal student loans.

A department analysis estimates that just over 5 percent of programs would fail the earnings test. The analysis found that 9 percent of undergraduate religious studies programs and 6 percent of graduate religious studies programs would fail. Programs that fail the earnings test for two consecutive years could lose access to federal student loans, and some could eventually be cut off from Pell Grants.

The department adjusted how it will apply the penalty of cutting off a program from the Pell Grant in response to concerns raised in public comments. Under the adjusted rule, programs that have not received federal student loans for the most recent five years will not lose access to the Pell Grant, even if at least half of the federal student aid dollars go to low-earning programs. Department officials wrote in the final rule that "This provision will allow low-earning outcome programs to continue receiving Federal Pell Grants while preventing students in those programs from borrowing Direct Loan funds that they would likely experience difficulty repaying."

Department officials also stated in the final rule that "Many institutions with religious missions do not participate in the Direct Loan program, and the Department's estimates show that this provision will likely reduce the regulation's impact on undergraduate students attending such institutions and programs." The Education Department said about 600 religious programs will be exempt from the earnings test because of this change. Department officials wrote that the accountability framework "does not place a substantial burden on the exercise of religion."

The Association for Biblical Higher Education Commission on Accreditation stated that 53 percent of students in religious studies bachelor's degrees and 89 percent of students in religious studies master's degrees could lose access to federal loans. Philip Dearborn, president of the association, previously described the proposed policy as an "existential threat to the future of religious higher education." He said, "We really don't know what the impact is going to be." Dearborn added, "Students aren't in it to make money," and "That salary is not their No. 1 concern." He said, "They're answering God's call on their lives and seeking to serve the church, seeking to serve society." Regarding the exemption, Dearborn said, "It's a smaller concession from what we really wanted and what we asked for," and "We're not done advocating for sure."

Department officials wrote, "Should a program fail the test and lose Federal student aid eligibility, it will not be because of its religious nature." They added, "It will be because the earnings of program graduates fail in the same way as a secular program that fails." Rabbi A. D. Motzen, national director of government affairs for Agudath Israel of America, said the carve-out for programs not relying on federal loans felt like the most "realistic" request. Motzen said most yeshivas, which the organization represents, do not participate in the federal loan program as communities fundraise to keep tuition low and students out of debt. He said the finalized rule "allows those institutions to continue operating, allows students to continue to attend those schools using Pell Grants if they're eligible."