Accountability Can Help Fix Childcare Wages
Two provisions in President Donald Trump’s One Big Beautiful Bill Act—Workforce Pell and Do No Harm—are forcing U.S. colleges to audit programs and budgets, with Human Development and Family Studies degrees at risk of losing federal funding due to low graduate earnings. The rules tie Pell Grants to high-wage programs and block loans for credentials that don’t out-earn high school diplomas, affecting over 100,000 recent graduates who earn below living wages, particularly in states like New York and Oklahoma.
President Donald Trump’s One Big Beautiful Bill Act, signed on July 4, 2025, includes two provisions reshaping higher education: Workforce Pell and Do No Harm. Workforce Pell extends Pell Grants to short-term training programs leading to high-skill, high-wage jobs, with federal and state boards determining eligibility. Colleges are already adapting, with 70% of presidents planning to expand such programs, per Inside Higher Ed’s 2026 survey. The Do No Harm rule cuts off federal student loans for programs where graduates earn no more than typical high school graduates in their state. This applies to two-year, four-year, and graduate programs across public, private, and for-profit institutions. The rule stems from decades of bipartisan efforts to introduce accountability in higher education, using a straightforward earnings test. Human Development and Family Studies degrees are the primary focus of these reforms, as graduates earn wages comparable to sub-associate certificates—between $24,000 and $34,000 annually. Data from the Census Bureau’s Post-Secondary Employment Outcomes file shows minimal wage premiums, with bachelor’s degree holders earning only about $900 more than certificate holders five years after graduation. Over 100,000 students earned these credentials in the past five years, yet graduates in every state covered by the data earn below the living wage for a single adult with no dependents. The shortfall ranges from $14,000 to $36,000 annually, with New York showing the largest gap—bachelor’s graduates earn just 43% of the living wage there. Oklahoma has the smallest shortfall, but all states face significant discrepancies. Colleges nationwide are now conducting audits and reworking budgets to comply with these new rules. The reforms aim to ensure taxpayer-funded education aligns with economic outcomes, pressuring institutions to either improve program efficacy or discontinue low-earning credentials. The changes mark a historic shift in federal oversight of higher education.
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