Christian College Presidents Warn New Student Loan Rules Could Cripple Religious Higher Ed

The U.S. Department of Education is proposing a new regulatory framework that could restrict federal financial aid for college programs based on the post-graduation earnings of their students, a move that leaders of Christian colleges warn could cripple religious higher education.

The proposed regulation, known as the Student Tuition and Transparency System (STATS), introduces an earnings premium test to determine whether specific college programs remain eligible for federal loans. The rule is an implementation of the One Big Beautiful Bill Act, which was enacted in 2025.

According to a Department of Education press release dated April 17, the system is intended to protect students from enrolling in degrees that provide a low return on investment.

Earnings Benchmarks and Eligibility

Under the STATS metric, the Department of Education will use data from the U.S. Census and the IRS to evaluate the earnings of graduates four years after they complete their degree.

The eligibility of a program depends on specific income benchmarks based on the level of the degree:

• Undergraduate programs are considered to have failed the test if their graduates do not earn more than the median income of a high school graduate between the ages of 25, and 34.
• Graduate programs are evaluated against the median earnings of adults in the same age bracket who hold only a bachelor’s degree.

Programs that fail to meet these earnings thresholds face significant federal penalties. The Department of Education stated in its April 17 announcement:

Programs that routinely fail to provide students with a reliable return on investment would lose access to federal student loans, and in certain cases, Pell Grants

U.S. Department of Education

Beyond the loss of financial aid, institutions with failing programs would be required to disclose that status to prospective students and would be forced to stop new student enrollments in those specific programs.

Impact on Religious Vocations

Presidents of Christian colleges and members of the Council for Christian Colleges & Universities have expressed concern that the earnings-based metric ignores the primary goals of religious education. They argue that the regulation effectively penalizes students who pursue religious vocations, such as ministry, which typically do not command high salaries.

Because ministry and other vocational religious roles often result in lower lifetime earnings compared to corporate sectors, these programs are more likely to fall below the median income benchmarks of high school or bachelor’s degree holders.

College leaders have described the federal regulation as an existential threat to the viability of religious higher education, suggesting that the inability to offer federal loans would make it impossible for many students to afford degrees intended for service-oriented careers.

The controversy centers on the tension between the government’s objective to ensure a financial return on educational investment and the mission of religious institutions to prepare students for spiritual and community leadership roles that are not driven by market-rate salaries.