Protecting Students from Worthless Degrees Act
Sponsored By: Senator Merkley, Jeff [D-OR]
Introduced
Summary
Require programs to meet strict debt-to-earnings and licensure-access rules to stop institutions from enrolling students into programs that leave graduates unable to get licensed or to repay loans.
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- Students and families: Students in programs that fail the new debt-to-earnings tests or cannot show licensure access could lose federal aid for that program. The Secretary must match earnings data and warn students when risks appear.
- Institutions: Colleges must demonstrate within 1 year that graduates can take required State licensure exams where the institution advertises and must provide timely clinical placements or internships. A program that fails the debt-to-earnings standard in 2 of any 3 years can be cut off from federal education assistance and must wait 3 years to regain eligibility.
- Programs and States: The bill extends earnings-outcomes rules to undergraduate certificates and tipped professions and requires institutions to be legally authorized in each State where enrolled students live. State reciprocity counts only if the State documents complaint handling and enforcement, and the STATS rule will have no force for tipped professions as of July 1, 2027.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 0 benefits, 1 costs, 3 mixed.
Stricter debt-to-earnings rules
This bill would create strict debt-to-earnings tests for career programs. A cohort would fail if discretionary DTE is 20% or higher and annual DTE is 8% or higher for the same cohort period. A program would fail if two of any three consecutive award years have failing cohorts. Programs that fail would lose Title IV federal aid for new students and could not regain eligibility for three years after the Department's notice. Loan payments would use cohort median debt amortized over 10, 15, or 20 years, and discretionary earnings would subtract 150% of the poverty level. The Education Department would match school records with IRS and Social Security data each year, publish rates, and give schools a notice within 45 days; appeals would be limited to calculation errors.
Schools must prove licensure access
This bill would require institutions to certify by the first December 31 after enactment that their eligible programs meet the new rules. The certification must be signed by the institution's top executive and updated within 10 days of changes. For programs that lead to licensure, schools would have one year to show graduates can take required licensure exams in each State where the school advertises and to provide timely clinical placements, internships, or apprenticeships. Schools must also explain that a program is not substantially similar to any ineligible or discontinued program.
State authorization for online schools
This bill would require institutions offering distance education to be legally authorized in every State where their enrolled students live. If a school is in a State authorization reciprocity agreement, it could rely on that agreement only if it documents that each State where its students live has a public complaint process and can enforce State law. The bill would allow States to impose additional requirements.
Who the bill covers
This bill would define key terms used throughout the Act. It would say which places count as States, which freely associated States are included, what 'Federal education assistance funds' means, and which institutions count as institutions of higher education. These definitions would decide who the new rules apply to.
Sponsors & CoSponsors
Sponsor
Merkley, Jeff [D-OR]
OR • D
Cosponsors
Sen. Durbin, Richard J. [D-IL]
IL • D
Sponsored 7/16/2026
Sen. Blumenthal, Richard [D-CT]
CT • D
Sponsored 7/16/2026
Sen. Shaheen, Jeanne [D-NH]
NH • D
Sponsored 7/29/2026
Roll Call Votes
No roll call votes available for this bill.
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