The mechanics of the new law are quite specific: if a graduate of a program fails to earn at least the median salary of someone with only a high school diploma in that state — in California, roughly 18 dollars per hour, or $36,000 per year — that program will be excluded from the federal student loan system. This is not an empty warning: schools have a maximum of two years to demonstrate improvement, and if they fail, students enrolled from July 1, 2028 onward will no longer be eligible for federal loans to cover tuition.
Initial data shows that most of California's education system remains safe: of approximately 3,000 programs reviewed by the U.S. Department of Education, roughly 90% have graduates meeting the income threshold. But about 300 programs fall short, concentrated in fields like cosmetology, medical assistant roles, arts, and performing arts — this is precisely where the mechanism touches a profession in which the Vietnamese-origin community participates at very high rates: the nails and beauty industry. A student graduating from a cosmetology program at a community college — the common pathway into the beauty profession within the community — now risks losing federal borrowing eligibility if the program cannot demonstrate sufficient income levels in the coming years.
A single income standard for all states — something Washington rarely does with education.
Who is most affected
Most programs failing the standard are located at for-profit educational institutions, though some arts programs at eight Cal State campuses and three UC campuses also appear on the list. A typical case is the California Institute of the Arts near Santa Clarita, where graduates with degrees in visual arts, film, and photography earn less than $30,000 four years after leaving school. The school's administration insists it has no intention of closing any program, arguing that artistic careers typically require longer to achieve financial stability — a reasonable professional explanation, but it does not change the fact that federal law measures outcomes by absolute income numbers rather than cultural or creative value.
A precedent once reversed
This is not the first time Washington has attempted to tie student loans to post-graduation income outcomes. The Obama administration once proposed similar rules based on debt-to-income ratios, but the first Trump administration repealed them before implementation; a comparable policy under Biden met the same fate when Trump returned to the White House in 2025. This time, the rule was codified within a larger law — the Comprehensive Law (HR 1) — making it far more difficult to reverse through a simple executive order.
Broader context on wage standards
Washington's choice to use the median salary of high school graduates as a benchmark also raises questions about who defines what counts as "livable." On another part of the globe, Vietnam has just taken its own step on minimum wage: the National Wage Council unanimously proposed regional average wage increases of 7.8% to take effect from January 1, 2027, pending government approval. These two policies are not directly related, but both demonstrate that minimum wage standards — whether in the United States or Vietnam — are increasingly being used as tools of public policy rather than mere economic figures.
Meanwhile, many other states continue to pass labor and consumer protection laws according to their own direction — such as New York, where starting in 2025 the minimum wage increased by an additional $0.50 and expanded paid leave rights for pregnancy-related work. That difference shows the new federal education law is a rare exception: a single standard applied uniformly across all states, rather than leaving each place to decide for itself.
What to watch
For students and parents choosing vocational schools, particularly in cosmetology, arts, or personal services fields, the next two years are a critical period to check whether the program they are considering appears on the at-risk list. The U.S. Department of Education will release income data by program, and that is information worth looking up before borrowing federal money for a short-term course.