Undergraduate certificates are encountering the highest failure rate under the U.S. Department of Education’s new earnings test, with 29% of these programs falling short, which is the steepest proportion among every credential type that was examined.
Cosmetology and massage therapy hit hardest
Data from the analysis of certificate programs reveal that schools offering cosmetology courses performed especially poorly, with 830 of 896 such programs missing the earnings benchmark. The test measures the earnings of graduates aged 25-34 against the typical earnings of high-school graduates in the same state, and the gap proved wide for this field.
Certificates in massage therapy followed closely, with a failure rate of 90%. Both of these occupations depend heavily on for-profit institutions; those providers made up 44% of the failing programs even though they represented only 7% of the entire sample.
Potential loss of federal loan eligibility
When a program fails the test in two out of three consecutive years, it risks losing eligibility for federal student loans. The Department intends to publish the first batch of results in early 2027, and schools could find themselves ineligible for the 2028-29 academic year if the outcome remains negative.
“If you run cosmetology or massage programs, plan at the portfolio level for losing loan eligibility rather than for a pass,” the report advised, noting that curriculum tweaks alone are unlikely to reverse the trend.
Bachelor’s degree programs performed much better overall, with a failure rate of just 1.2%. Nevertheless, fine and studio arts bachelor’s degrees saw a higher failure rate of 15%, reflecting the lower early-career earnings that are typical for artists who often rely on portfolio work or part-time roles.
At the master’s level, clinical mental health counseling programs failed at 38%, while the overall master’s failure rate stood at 4%. Analysts suggested that accelerating licensure pathways could boost graduate earnings within the test’s assessment period.
Nursing programs stood out as the only category with no failures at any level. Other bachelor’s fields, including engineering, computing, business, criminal justice, psychology, and teacher preparation, recorded failure rates of one percent or less.
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