Are you uncertain about how your programs may perform under the new STATS and Earnings Accountability framework? If you are reading this article, you have likely seen some of the headline projections: more than 90% of beauty and wellness programs are expected to fail the earnings premium test, roughly one-third of undergraduate certificate programs are expected to fail, and other program categories may face similar scrutiny. But where do those statistics come from?
They come from a publicly available Department of Education spreadsheet known as the 2026 Program Performance Data file, or “PPD:2026.” ED created the file to enhance transparency and inform discussions associated with the AHEAD Committee negotiated rulemaking. PPD:2026 is not the official eligibility metric, and schools should not treat it as a final determination. It is, however, the best available preview of how program-level earnings data may translate into exposure under the new accountability framework.
The file is large, technical, and not always intuitive. Still, for programs with enough completers to produce a median earnings value, it gives institutions an early opportunity to identify where graduates’ earnings may fall close to—or below—the applicable benchmark. In other words, PPD:2026 should be treated as an early-risk screening tool: not a verdict, but a signal that schools can use now to prioritize internal review, prepare leadership for potential exposure, and decide where deeper program-level analysis is needed.
Understanding Data in the File
Before drawing conclusions from PPD:2026, it is important to understand what the file is showing, what it is not showing, and where its limitations are most likely to affect your interpretation.
Who is included: The preview file includes earnings information on students who completed their program in the 2017-18 and 2018-19 award years. Keep in mind this is a preview cohort, not the cohort ED will use for the first official earnings premium metric.
What is being measured: The file reports median annual earnings for that completer cohort using tax year 2023 earnings, adjusted to 2024 dollars.
Which benchmark is being applied: The file compares those median earnings to earnings thresholds derived from American Community Survey data. These are the most current benchmarks available for the preview file, but again, they will not necessarily be the same dollar figures ED uses for the first official accountability metric.
Why data might be missing: Small cohorts and privacy rules mean some programs will not show a result in the file. A blank result is not necessarily good or bad news; it usually means ED did not have enough completers from the 2017-18 and 2018-19 award years to calculate and disclose a public median earnings result.
Other important caveat: PPD:2026 evaluates programs using the first four digits of the Classification of Instructional Programs (CIP) code. As a result, programs that may later be assessed separately under official metrics can appear grouped together in the preview file. One program within the group may be raising the median earnings result, while another may be pulling it down.
The practical takeaway is that PPD:2026 can point you toward possible risk exposure, but it should not be read as a final program-by-program outcome. Use it to identify where further review is needed, especially where programs are grouped, missing data, or close to the applicable earnings benchmark.
How the First Official Cohort Gets Built
The first official metric under the new framework will use tax year 2025 earnings, matched initially to students who completed during the 2020-21 award year. If that cohort includes fewer than 30 completers, ED will expand the cohort through a defined sequence:
- First, ED adds students who completed during the 2019-20 award year, using tax year 2024 earnings for that group.
- If the cohort still includes fewer than 30 completers, ED adds students who completed during the 2018-19 and 2017-18 award years, using tax year 2023 and 2022 earnings, respectively.
- If the cohort remains too small, ED combines programs at the same institution with the same credential level and four-digit CIP code.
- If the expanded cohort still does not reach the minimum size, ED will not calculate the metric.
Notice that the earnings year moves with the completer cohort. Each group is measured using earnings four years after completion, so earlier completer cohorts are matched to earlier tax years.
The Tipped-Income Delay: Read the Fine Print
A narrow group of programs may be eligible for a delay before enforcement consequences apply. This includes programs that prepare students for occupations where tipped income is prevalent. A complete list of qualifying CIP codes appears in Table 5.22 of the final rule. If you offer cosmetology, barbering, bartending, gaming, or massage therapy programs, there is a good chance they are covered by this provision.
The rationale is tax timing. The One Big Beautiful Bill’s “No Tax on Tips” provision exempts up to $25,000 in tip income starting with the 2026 tax year, and reported earnings for tipped occupations will not reflect that change until then. The delay gives affected programs additional time for reported earnings to catch up with actual earnings, but the size of the effect remains uncertain. Because the metric uses median earnings, more than half of the students in a completer cohort would have to change their tax-filing behavior before the cohort’s median earnings would move. If only a smaller share begins reporting more tip income, individual earnings records may improve, but the median could remain unchanged.
What the delay does not do is exempt these programs from the test. ED still calculates and publishes the underlying earnings information during the delay period, so the programs are simply treated as neither passing nor failing while the delay runs. If your institution has a program listed in Table 5.22, that is a delay in consequences, not a delay in scrutiny.
The Early Implementation Decision
Another common question I’ve been receiving: Should my school implement STATS reporting early, or hold to the existing FVT/GE framework for one more cycle?
For most institutions I have spoken with, the more conservative and practical answer is early implementation. That does not mean the decision is risk-free or automatic. It means that, in most cases, early implementation makes more sense because it will 1.) align the school with the framework ED is moving toward, 2.) reduce the amount of data the school must compile for the October 1, 2026 reporting cycle and 3.) avoids spending time constructing and disclosing metrics for a regulatory structure that is being phased out.
The difficult part is that schools are not choosing between two perfectly clear paths. They are making assumptions about several unresolved or practical questions: whether ED will actually calculate FVT/GE metrics for the remaining transition period, whether a program would pass those metrics, and whether a failing result under FVT/GE could later be treated as one of the two failures that trigger loss of Direct Loan eligibility under the successor accountability framework.
That last question matters. Under both FVT/GE and STATS/Earnings Accountability, a program that fails in two out of three years can become subject to loss of eligibility consequences. My expectation is that a failed earnings premium result under FVT/GE should not count once the STATS/Earnings Accountability regulations are in place. But until ED definitively states how it will treat that transition, schools should be cautious about assuming there is no carryover risk.
The FVT/GE framework also includes more than the earnings premium test. The debt-to-earnings test is substantially more involved because it requires combining institution-reported data with federal loan data, determining total loan debt for individual students, calculating a cohort median debt amount, converting that median debt to an annual loan payment, and comparing that payment to the same cohort’s median earnings. ED may technically have much of the information needed to do this work, especially because schools have already reported or should have reported data for recent award years. But that does not make the calculation simple, and schools should not assume the administrative complexity eliminates the possibility that ED will calculate the metrics.
For proprietary institutions and other institutions with gainful employment programs, the stakes are higher because warnings and potential loss of eligibility remain central to the decision. Those schools should ask whether they are comfortable remaining exposed to a final FVT/GE cycle, particularly if PPD:2026 or internal data suggests that one or more programs may struggle on the earnings premium measure.
Nonprofit and public institutions with career or vocational programs may have a different calculus. Their degree programs are not considered gainful employment programs, so the FVT/GE warning and loss-of-eligibility structure may not apply in the same way. For those institutions, delaying earnings accountability may be more attractive if they are concerned about how programs will perform under the earnings premium test. Even then, the decision should be informed by the program-level exposure reflected in PPD:2026, not by a general desire to postpone compliance work.
The tipped-income delay is another important reason many schools may prefer early STATS implementation. ED has tied that delay to the STATS/Earnings Accountability regulation, not to the FVT/GE rule. That distinction matters for programs in areas such as cosmetology, barbering, bartending, gaming, and massage therapy. If a school is depending on the tipped-income delay as part of its compliance strategy, it should be careful about remaining in a reporting framework where the availability of that relief is, at best, less clear.
Before you decide, ask:
- Are we prepared to report under STATS now, and would doing so reduce the data burden for the October 1, 2026 cycle?
- Do we have GE programs that may be vulnerable under the final FVT/GE cycle?
- Are we assuming ED will not calculate FVT/GE metrics, or that any failing result would not matter later?
- Do any programs rely on the tipped-income delay, and if so, are we positioning those programs within the framework where that delay clearly applies?
- What does PPD:2026 suggest about our earnings premium exposure, especially for programs close to or below the benchmark?
The bottom line: for many schools, early implementation is the cleaner and more defensible path because it reduces reporting burden, avoids unnecessary work under the debt-to-earnings framework, aligns compliance planning with the rule ED expects to administer going forward, and may better position tipped-income programs for the transition relief built into STATS/Earnings Accountability. A school that chooses not to implement early should do so intentionally, based on program-level data and a documented assessment of why remaining under FVT/GE for one more cycle is worth the uncertainty.
Using PPD:2026 to Inform the Path Forward
Schools should use PPD:2026 now to understand what the available data suggests under both regulatory frameworks. Although the file is not a final STATS/Earnings Accountability metric, it contains information that is highly relevant to the remaining FVT/GE framework, including median earnings measured three years after completion and estimated debt-to-earnings rates based on federal loan debt. At the same time, the earnings data can help schools identify programs that may be vulnerable under the new STATS framework, particularly programs close to or below the applicable earnings threshold. The file will not answer every question, but it can help schools move from general uncertainty to a more informed assessment.
McClintock & Associates can help schools work through that analysis on a program-by-program basis. We can assist with interpreting the PPD:2026 file, identifying where the preview data may overstate or understate actual exposure, evaluating whether tipped-income programs may benefit from transition relief, and helping leadership think through the practical questions surrounding early STATS implementation. For many schools, the right next step is not simply “wait and see.” It is to understand the data, document the assumptions behind the reporting decision, and make a defensible choice before the October 1, 2026 reporting deadline.
Frequently Asked Questions
No. PPD:2026 is a preview data file, not the metric ED will use for eligibility determinations. The first official metric uses earnings year 2025 matched to an initial completer cohort from the 2020-21 award year.
ED works through a defined cohort expansion sequence — adding earlier award years, then combining years, then combining CIP-matched programs at the institution — before concluding a program is too small to calculate.
Programs listed in Table 5.22, derived from Treasury/IRS tip income data and an ED/Labor CIP-SOC crosswalk. Twenty programs qualify, including cosmetology, barbering, bartending, gaming, and massage therapy.
No. ED still calculates and publishes earnings information for these programs during the delay year. The delay affects enforcement timing, not whether the underlying data is measured.
It depends on your current program risk and your team’s readiness. Early implementation reduces the data elements you report for the October 1, 2026 cycle, but it isn’t a shield from the earnings test, which applies regardless of which reporting path you choose this cycle.
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Luke Hoey presented “Earnings Accountability: The Painful Deployment of Gainful Employment” at the 2026 MAACS Conference. Reach him at lhoey@mcclintockcpa.com or 412-257-5980.
