Indiana Bill Could Eliminate College Programs Failing Earnings Test – and Others May Follow

Indiana lawmakers are moving to dramatically reshape higher education within the state, potentially eliminating degree programs that don’t demonstrate a clear return on investment for graduates. February 23, 2026, the state Senate Bill 199 is nearing passage, and would tie program funding to student earnings, going further than a new federal accountability measure.

The federal government, through the “Do No Harm” earnings test established in the One Big Beautiful Bill Act last summer, will cut off students attending underperforming programs from receiving federal student loans. Indiana’s bill, however, proposes to eliminate those programs entirely at public universities and Ivy Tech Community College. This represents a substantially harsher approach than the federal guidelines.

The core of the legislation requires college programs to demonstrate that their graduates earn more than the average Indiana high school graduate – currently just over $35,000 annually – to continue receiving state and federal funding. According to recent federal data, roughly a dozen public institution programs within the state would fail to meet this threshold. While the state Commission for Higher Education retains the power to grant exemptions, the bill signals a significant shift in how the state values and funds higher education.

The Commission for Higher Education has voiced support for the bill, stating its aim is to “strengthen the guarantee that the important higher education investment being made by Hoosier students and their families leads to meaningful career opportunities and financial stability.” The commission has pledged a “thorough evaluation” of programs facing elimination, but the prospect of widespread program cuts is raising concerns among faculty and administrators.

The legislation isn’t without its complexities. The Indiana General Assembly has been focused on unrelated restrictions regarding minors’ social media usage, creating a conference committee to reconcile differing versions of the bill. Despite these disagreements, the provision targeting low-earning degrees has largely remained uncontested.

Indiana isn’t acting in isolation. Bills have been proposed in Nebraska and New Hampshire that would similarly expand the application of the federal earnings test, though neither has progressed as far as Indiana’s SB 199. These efforts reflect a growing trend among Republican-led states to hold universities accountable for the economic outcomes of their graduates and to redefine the value of academic disciplines based on earning potential.

Critics of the bill have voiced strong opposition. Representative Ed Delaney, a member of Indiana’s House Education Committee, labeled the legislation “a form of academic Stalinism,” arguing that it unfairly penalizes programs with intrinsic value that may not translate directly into high salaries. He pointed out that the bill fails to account for individual circumstances and the varying financial priorities of students.

Jordan Matsudaira, a professor at American University specializing in postsecondary education and economics, echoed this sentiment, noting that Indiana’s approach is unique in its severity. “Indiana is the only one I’m aware of that a) mimics the federal earnings test exactly and b) requires a program be shut entirely if it fails that test,” he stated. While Matsudaira acknowledged the value of increased accountability, he cautioned against a blanket approach, particularly for higher-level degrees, suggesting that programs may possess value not fully reflected in immediate earnings.

The programs potentially facing elimination are diverse, ranging from Ball State University’s bachelor’s degree in dance to Ivy Tech Community College’s associate degree in library and archives assisting. Other programs identified as potentially vulnerable include bachelor’s degrees in English language and literature from IU Northwest and Purdue University Northwest, and a master’s degree in mental and social health services from the University of Southern Indiana. The U.S. Education Department’s initial analysis, based on broader classifications of fields of study, suggests a significant number of programs could be affected.

Faculty members are also expressing concern. Heather Akou, president-elect of the IU Bloomington Faculty Council, expressed worry about further program eliminations. Noor O’Neill, president of the Indiana Conference of the American Association of University Professors, criticized the bill as a “reductionist” approach that devalues the diverse aspirations of students and undermines faculty control over curriculum.

The current legislation builds upon a law passed last year requiring Indiana universities to meet minimum graduation numbers for each degree program. That law already led to the voluntary elimination of over 400 programs, roughly one-fifth of the state’s total degree offerings, including teacher training programs and humanities disciplines. SB 199 would add the earnings test as a further condition for program survival.

The federal earnings test operates by comparing the median earnings of program graduates four years after completion to the earnings of workers aged 25-34 with only a high school diploma (for bachelor’s programs and below) or a bachelor’s degree (for graduate programs). Programs fail if graduate earnings fall below this benchmark in at least two of the last three years.

The debate over SB 199 highlights a fundamental tension between the traditional goals of higher education – fostering intellectual curiosity and personal development – and the increasing pressure to demonstrate economic value. As states grapple with rising tuition costs and student debt, the demand for accountability is likely to intensify, potentially leading to further scrutiny of academic programs and their contribution to the workforce.