The US Department of Education has issued a new rule that makes the availability of Federal financial aid for students conditional on whether the programs the students are enrolled in meet an “earnings premium” criteria. According to a press release from the Department of Education, the “Student Tuition and Transparency System (STATS) and Earnings Accountability rule” states that: undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor’s degree holder. If a program fails to show at least this modest financial return on investment for its graduates in two out of three consecutive award years, it will lose eligibility to participate in the federal Direct Loan program. After three years of consistently failing the earnings premium measure, the Department could also terminate eligibility for Title IV of the Higher Education Act (HEA), including Pell Grant eligibility, for all of an institution’s low-earning outcome programs.  How will the figures the rule references be determined? A fact sheet about the rule states: Undergraduate completers’ median earnings will be compared to the median earnings for working adults aged 25-34 with only a high school diploma either from the state in which the institution is located or nationwide, depending on the institution’s enrollment makeup. Similarly, graduate completers’ median earnings will be compared to the median earnings for working adults aged 25-34 with only a bachelor’s degree. Program earnings will be calculated using program completers’ median annual earnings, measured four years after completion.   There are, of course, questions here about fairness, paternalism, and the value of education, which people are welcome to discuss. But we might also be curious about how much money are we talking about. Here is data from the National Center for Education Statistics for the US in 2022 about the pay of 25- to 34-year-olds who worked full time, year round: median earnings of those whose highest degree is a high school diploma: $41,800 median earnings of those whose highest degree is a bachelor’s degree: $66,600 median earnings of those who have an MA or PhD: $80,200. How does philosophy hold up? According to data from the..

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