Federal Update - February 26

February 26, 2026

GOVERNMENT RELATIONS HIGHLIGHTS

AACS on the Hill: Support Building from Congressional Allies 

State of the Union: Trump Omits Higher Ed 

RISE Rulemaking (Student Loan Limits): Comment Window Closing Soon 

Repayment Trends Raise Concerns: ED Issues New Guidance 

DEEPER DIVE: Accountability Framework Anticipated Timeline

AACS BOARD BARNSTORMS HILL

What You Need to Know 

Yesterday, AACS board members, joined by certain AACS school representatives with specific geographic ties to congressional leadership, spent the day on Capitol Hill to discuss the negative impact of ED’s draft Accountability Framework. This included meetings with congressional leadership, leaders of the education authorizing and appropriations committees, and many other congressional offices. AACS received a very strong and positive reception. It was energizing to see how our community, when showing up in force and determination, can spring into action to advocate for our interests. AACS received a very strong and positive reception.

Why This is Important 

This “Mini Hill Day” served as a warm‑up for our AACS’s Hill Day in April, when an even larger contingent will return to Capitol Hill to meet with lawmakers to discuss the Accountability Framework. If you have not yet registered for Hill Day, we encourage you to sign up now. AACS will begin scheduling meetings soon.

PRESIDENT TRUMP LARGELY AVOIDS EDUCATION IN SOTU

What You Need to Know 

On Tuesday, President Trump delivered the State of the Union address to Congress and the nation. The President spoke for nearly two hours and highlighted what he views as major accomplishments of his Administration. These included OB3, the role of tariffs in economic policy, and initiatives aimed at addressing inflation and affordability. 

Why This Is Important 

The speech contained almost no references to higher education, aside from a brief mention of the Administration’s efforts to combat DEI initiatives. 

RISE PUBLIC COMMENT PERIOD CLOSING SOON

What You Need to Know 

On January 30, ED published the RISE notice of proposed rulemaking. The proposed rule addresses issues related to student loan limits, repayment, and rehabilitation based on requirements set forth in OB3. Comments are due to ED no later than March 2.  

Why This Is Important 

If these student loan issues are of concern to your school, AACS encourages you to speak up by submitting comments before the deadline. 

ED'S CONTINUED ATTENTION TO STUDENT LOAN REPAYMENT

What You Need to Know 

On February 18, ED issued an Electronic Announcement regarding student loan repayment issues and concerns about defaults. The announcement links to data sets reporting student loan delinquency rates by institution as of this month, showing that over 1,800 institutions have nonrepayment rates at or exceeding 25%. The Department notes that delinquency rates do not necessarily correlate directly with default rates. Nevertheless, these delinquency rates may be considered indicators of future default rate trends. 

Why This Is Important 

Draft cohort default rates for fiscal year 2023 will be released in the coming weeks, giving institutions an opportunity to review and challenge ED’s data. These CDRs will be rates for students who entered repayment between October 1, 2022 and September 30, 2023 and who defaulted between October 1, 2022 and September 30, 2025. Official CDRs for FY2023 will be released in September 2026.  

The HEA mandates that an institution with official CDRs over 30% for three consecutive years loses all Title IV eligibility for the two subsequent years. ED regulations further specify that an institution with a single-year official CDR over 40% loses Direct Loan eligibility – but not access to Pell Grants – for the two subsequent years. Lesser sanctions apply to institutions with rates for one or two years over 30%. 

ED’s Electronic Announcement encourages institutions to implement their default management plans and to engage with their student borrowers to take advantage of loan repayment and rehabilitation opportunities included in OB3 in order to reduce default risks in FY2024 and beyond.  

DEEPER DIVE: AHEAD ANTICIPATED TIMELINE

If implemented as drafted, ED’s Accountability Framework regulations would have dire consequences for beauty, barbering, and wellness programs. The Department must formally propose the consensus language from the AHEAD neg reg when it solicits public comment, which is anticipated to occur this spring. ED is required to provide a minimum 30-day public comment period.  

We expect the full Accountability Framework will take effect July 1, 2027, with certain certification requirements becoming effective July 1, 2026. This timeline would require ED to circumvent the Master Calendar, and they will likely do so by asserting OB3 statutory deadlines as their legal justification. ED’s neg reg materials suggest the agency would first notify institutions of Earnings Premium failures under the Accountability Framework in early 2027, to become effective for the award year beginning July 1, 2027. At that point, schools with failing programs would be required to issue a warning to students in the program.  

If a program fails the Earnings Premium test twice in three consecutive years, the program would be deemed a “low-earning outcome program” and would lose access to Direct Loans, as soon as July 1, 2028.  If 50% or more of an institution’s Title IV recipients are in, or 50% or more an institution’s Title IV funds are from, low-earning outcome programs, the institution would fail a new administrative capability standard. If an institution were to fail this new standard in two out of any three consecutive award years, the institution would be placed on provisional status and the institution’s low-earning outcome programs would lose access to all Title IV funds, (including Pell Grants), as soon as July 1, 2029. Functionally, this means a program would have to fail the earnings premium test in three consecutive years prior to losing Title IV-eligibility.  

AACS will keep you informed about all aspects of the Accountability Framework as the regulatory process moves forward. For now, it is important for all AACS members to be prepared to submit comments when the comment period opens later this spring. 

For More Information

If you have any questions about this Update, please email info@myaacs.org.