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With just a high school diploma in hand, and no additional training or education, the average Californian is currently expected to earn about $18 an hour, or $36,000 a year — just above the state’s minimum wage.
Effective this month, all colleges, universities and short-term certificate programs in the U.S. must prove that their graduates earn at least the median wage of someone in their state with only a high school diploma. Otherwise, their students will soon become ineligible for federal loans.
It’s a “low bar,” said Michael Itzkowitz, the president of the HEA Group, which conducts research into higher education policy. “If you’re going to college, you expect to be earning at least minimum wage, and probably even more than that.”
In places such as the Bay Area, $36,000 a year barely covers housing, not to mention other expenses.
Of the nearly 3,000 higher education courses of study in California evaluated by the U.S. Department of Education, roughly 90% of graduates earned at least that much, according to Itzkowitz’s analysis. But graduates of about 300 California programs — especially those in cosmetology, medical assisting, arts and theater — failed to earn $36,000 four years after graduating, his analysis found.
Most of the failing programs are at for-profit colleges, sometimes known as trade schools or career colleges, which have faced decades of scrutiny, occasionally from lawmakers, over poor outcomes and high tuition costs. But courses of study at community colleges and four-year universities failed too, including theater and fine arts programs at eight California State University campuses and at three University of California campuses.
Schools still have at least two more years to prove to the federal government that graduates of these programs are meeting the new income standard. If trends at low-performing programs continue, their students could lose access to loans as soon as July 1, 2028.
CalMatters reached out to over 15 universities, community colleges and for-profit trade schools asking about the future of these programs with low-earning graduates, but few schools responded. Spokespersons for the UC and Cal State systems both said that they’re reviewing the new law but declined to answer most other questions. Cal State spokesperson Amy Bentley-Smith said the campuses were seeking “constructive solutions.”
One of the few schools that did respond was the California Institute of the Arts, a private arts school near Santa Clarita whose alumni include actor Don Cheadle, filmmaker and animator Tim Burton and comedian Paul Reubens, otherwise known as Pee-wee Herman. Graduates of its fine arts, film and photography programs have some of the lowest earnings of any large bachelor’s degree program in the state, just below $30,000 four years after finishing school.
In an interview, college officials offered a number of explanations, pointing to issues with the data and the ways that arts careers are different from more mainstream ones. Arts careers can take longer to build and many graduates intentionally forego more lucrative corporate opportunities, said Ranu Mukherjee, the dean of the college’s film and video school.
Just over 30 fine arts, music, theater, film and photography programs in California fail the new earnings test.
Mukherjee said the school doesn’t intend to close any of the affected programs, though she said it’s important to communicate with students about what could happen in the future. “It’s hard to imagine CalArts without an undergraduate film or arts program,” she said. “It’s in our name.”
Roughly 100 other fine arts, music, theater, film and photography programs in California pass the new earnings requirement, according to current education department data. They include the film program at UC Berkeley and the fine arts programs at San Diego City College and the University of Southern California, where workers all report earning over $70,000 four years after graduating school.
‘Regulatory ping pong’
Over the years, the federal government has tried, and often failed, to regulate college programs that offer poor returns on investment.
In 1989, the U.S. Department of Education banned colleges from distributing certain forms of federal aid if a large percentage of their students had defaulted on student loans in the past. The rule was effective at first, shutting down numerous low-performing schools, but over time loopholes emerged.
“Institutions have learned how to game the system,” said Itzkowitz, adding that many schools encourage students with low earnings to put their loans into forbearance or deferment status, which delays payment. “No one fails.”
The Obama administration put forward another rule that tied access to federal financial aid to certain college programs’ debt-to-income ratio, meaning that institutions whose graduates have a high level of debt and low earnings would face repercussions. The Trump administration ended the rules before they were ever enforced. Another, related policy by the Biden Administration faced a similar fate in 2025, when Trump assumed office for a second time.
“We’ve been playing regulatory ping pong,” Itzkowitz said. “The Department of Education is like, ‘We’re going to do this, we’re not going to do this.’ This has more teeth now because it’s actually written by Congress and put into law.” That law, known as the One Big, Beautiful Bill Act, or H.R. 1, was signed on July 4 last year and went into effect this month.
Itzkowitz’s analysis comes from the education department, which released preliminary data about earnings using the 2022 and 2023 tax returns for graduates from the 2017-18 and 2018-19 school years. Many schools that failed the new test have criticized the numbers, saying they’re misleading.
It’s “an overly broad benchmark,” wrote Angelica Muro, the chair of the visual arts and music department at Cal State Monterey Bay, in an email to CalMatters. The new earnings rule “undercuts the societal benefits of critical thinking and the immense sociocultural value held within the arts,” she wrote.
The school’s fine arts graduates earned about $34,000 four years after graduating, according to federal data, but the education department doesn’t measure the industry where the graduate is working or whether it’s related to their course of study. The data also doesn’t take into account any geographic differences in California, such as the “smaller creative economy” in the largely rural seaside region around Cal State Monterey Bay, wrote Muro.
Some of the fine arts programs with the highest-earning graduates are located in the Bay Area, Los Angeles and San Diego, where there are more creative jobs and higher wages. But even some colleges in rural counties and those in regions with high poverty rates, such as Stanislaus State, Fresno State, Cal State Bakersfield and Chico State, have fine arts programs that pass the new earnings test.
Yet another loophole?
Of the roughly 300 California programs that fail the new earnings test, more than a quarter are for cosmetology or personal grooming, such as nails, hair or skin care. Numerous studies have long documented challenges with cosmetology education, including high levels of debt and low earnings.
Graduates of the Shasta School of Cosmetology in Redding, for instance, reported earning just over $12,000 four years after graduating — well below the state’s poverty line. CalMatters reached out to 10 of the largely private and for-profit cosmetology schools whose graduates have the lowest earnings, but none responded.
As the education department finalized its interpretation of the new law, cosmetology schools argued that the earnings data was unfair because it didn’t take into account that many barbers and salon owners run their own businesses and may not report their tips in their taxes. The department gave these programs an additional year to comply, meaning that graduates could lose access to loans no earlier than July 1, 2029.
The cosmetology schools’ arguments are based on the “flimsiest of rationale” and provide yet another loophole that allows schools to avoid accountability, said Christopher Madaio, a senior advisor for federal and state accountability at the Institute for College Access and Success, which advocates for affordable higher education.
Still, he said he supports the new earnings law as a first step. “It didn’t go far enough, and it’s not written perfectly,” he said. “But yes, I’m happy to see that it’s being implemented.”
