When President Donald Trump signed H.R. 1 — now known as the Working Families Tax Cut Act — into law on July 4, 2025, the sweeping measure included provisions that education and arts leaders say could dramatically alter financing for graduate and professional study and reshape which programs qualify for federal student aid.
Major aid changes and a new earnings test
The law did three key things affecting higher education funding: it terminated the graduate and professional PLUS loans, established differentiated caps in the federal direct loan program that favor programs classified by the Department of Education as leading to professional degrees, and created an earnings-based accountability framework that will determine program eligibility for federal student aid.
Implementation has been phased. The graduate and professional PLUS loans were cancelled and the new loan caps went into effect on July 1, 2026. The earnings accountability measure — widely described by institutions as the "do no harm" or earnings test — is scheduled to begin on July 1, 2027. The Department of Education issued preliminary estimates in January that began to probe the potential scope of programs at risk under the test, though the administration has rolled out implementation slowly.
Arts programs fear disproportionate impact
Leaders in arts higher education say the combination of reduced loan access, lower caps for nonprofessional-degree programs and a test tied to graduates' earnings could penalize programs that by design prepare students for fields with uneven or nontraditional income trajectories. The Department of Education's list of programs considered to confer professional degrees includes disciplines such as veterinary medicine, law and forensic psychology; it does not include degrees focused on fine arts, music, design or other cultural studies.
"It's a one-size-fits-all approach that does not work for artists, designers and musicians," said Lee Ann Scotto Adams, executive director at the Strategic National Arts Alumni Project (Snaap).
Advocates argue that many arts careers combine portfolio-building, freelance work, gig-based income and delayed earnings growth — trajectories that an earnings-only measure could misread as failing to provide sufficient economic benefit. They warn that programs serving those students could lose access to Title IV aid if they do not meet the new metric.
- Loan access reduced: Graduate and professional PLUS loans eliminated as of July 1, 2026.
- Loan caps differentiated: Direct loan limits adjusted to favor programs deemed to lead to professional degrees.
- Earnings test: Program eligibility for federal aid will be tied to graduate earnings beginning July 1, 2027.
What this could mean for students and institutions
Schools that emphasize arts and culture could face enrollment declines if prospective students are unable to make up the gap left by the elimination of PLUS loans or by lower borrowing caps. Institutions may need to re-evaluate tuition pricing, scholarship support and the architecture of degree offerings. Some observers say programs could alter curricula to appear more directly aligned with higher-earning occupations, while others fear the test could prompt closures of smaller, specialized programs.
Policy analysts and arts educators caution against equating educational value solely with early-career earnings. They note that creative careers contribute to broader cultural and economic ecosystems in ways not captured by short-term salary measures, and that alumni success can take varied forms including entrepreneurship, public service, education and community-based work.
| Provision | Effective date |
|---|---|
| Graduate and professional PLUS loans cancelled | July 1, 2026 |
| Differential caps on direct loans implemented | July 1, 2026 |
| Earnings-based accountability test begins | July 1, 2027 |
The Department of Education has not publicly released a full list of programs that would be protected or disadvantaged under the new cap structure beyond the general categories it considers professional degrees. Nor has the agency finalized the precise thresholds and methodology for the earnings test beyond the phase-in schedule, leaving institutions and advocacy groups seeking more detailed guidance.
As implementation proceeds, arts educators and national organizations are expected to press policymakers for measures that recognize a broader set of outcomes and career pathways. They are also likely to urge more nuanced accountability tools that account for the diversity of disciplines and the time it can take for creative careers to mature.
Without changes, the shift in federal aid rules could reshape choices for students weighing advanced study in the arts and the financial viability of the programs that train them.
