Protecting Students from Worthless Degrees Act
Sponsored By: Representative Krishnamoorthi, Raja [D-IL-8]
Introduced
Summary
This bill would tie federal student aid to programs' real-world outcomes, especially debt-to-earnings rates and state licensure readiness. It would create a new debt-to-earnings test, require programs to meet licensure prerequisites and provide placements, and tighten state authorization for distance education.
Show full summary
- Students and families: Programs must fully qualify graduates to sit for licensure in the student’s state and provide timely clinical or pre-licensure placements. Institutions must notify prospective students before enrollment if a program does not meet the student’s intended State licensure prerequisites.
- Institutions and programs: A cohort fails if its discretionary debt-to-earnings rate is at least 20% and its annual debt-to-earnings rate is at least 8%. Programs that fail two of any three years lose access to federal education assistance and cannot reestablish eligibility for at least 3 years.
- Federal agencies and States: The Secretary would match earnings data with the IRS and Social Security Administration annually, publish program rates, and notify institutions within 45 days. Distance-education providers must be authorized in each State where students live or participate in State reciprocity agreements that review and publish complaints.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 1 benefits, 0 costs, 2 mixed.
New debt-to-earnings rules
If enacted, the bill would make new debt-to-earnings tests a condition for Title IV aid. The Department would use cohort medians, subtract 150% of the federal poverty guideline from earnings, and compute annual loan payments using 10/15/20-year amortization rules and multi-year interest-rate averages. A cohort fails if discretionary debt-to-earnings is at least 20% and annual debt-to-earnings is at least 8%, and programs that fail two of three consecutive award years would lose federal aid and cannot reestablish eligibility for three years. The Department would publish rates annually and require institutional certifications and student warnings before enrollment.
Limits on out-of-state online programs
If enacted, institutions offering programs to students in other States would need, within one year, to show that completion lets graduates sit for required exams and obtain licensure where students live and in any State the school advertises to. Institutions must also arrange timely pre-licensure clinicals, internships, or apprenticeships. Schools would have to be legally authorized in every State where enrolled students live or rely on a reciprocity agreement that preserves each State's enforcement and public complaint processes. Programs that do not meet these rules could lose federal student aid.
End special delays for tipped programs
If enacted, the bill would require the Department to apply earnings-outcome rules equally to all professions, including tipped occupations. It would also nullify a specific regulatory delay related to tipped professions, effective July 1, 2027. This would remove an exemption and make the earnings rules apply to tipped programs on that date.
Sponsors & CoSponsors
Sponsor
Krishnamoorthi, Raja [D-IL-8]
IL • D
Cosponsors
Rep. Davis, Danny K. [D-IL-7]
IL • D
Sponsored 7/16/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov