Last Updated: 02-13-2026
In this month’s edition of our Program Economic Analysis (PEA) use case series, we talk through a number of recent activities that may impact program eligibility for federal funding.
At the majority of institutions, conversations about revenue typically focus on driving enrollment to academic programs. Many institutions use tuition discounting to this end, and many institutions end up collecting less tuition revenue overall as a result. A thorough review of discounting practices is certainly in order.
There are other considerations on the revenue side as well, including the fact that a good portion of net tuition revenue is not actually paid by students. If you’re a public institution, some of your tuition revenue is from state appropriations. If you’re a private institution, the net tuition revenue that you collect from students comes from a combination of direct payments and federal funding in the form of student loans and grants. What would happen to your programs if those federal funding sources were significantly reduced or lost altogether? This is an important strategic question, and not just because it would fundamentally alter your institutional revenue assumptions. Recent federal legislation, combined with negotiated rulemaking related to accountability in higher education, means that students will not be eligible for student loans if their program of study, at the institution of their choice, does not produce graduates who pass a minimum earnings test (usually benchmarked against high school graduates in the state). A significant number of undergraduate certificates will fail this metric. A little more than half of all students who would lose eligibility under this framework are enrolled at for-profit institutions, but many are enrolled at private, nonprofit institutions. This means you need strategies that are program-specific, not institutionwide.
If you are a PEA client, you can start getting to the bottom of this in your PEA Program Tuition dashboard.
- Set View Choice 1 to “Program.”
- Scroll down to the “What Drove Net Tuition?” table. You’ll see something like this for each of your academic programs.
What Drove Net Tuition?
| BA-BA in Psychology in General Psychology emphasis | |||||
|---|---|---|---|---|---|
| 2023 | 2024 | 2025 | |||
| Student Enrollment | 48 | 29 | 41 | ||
| Gross Tuition | 1,183,142 | 672,697 | 1,098,175 | ||
| Discount Choice | 726,338 | 389,926 | 674,698 | ||
| Tuition Choice | 456,804 | 282,771 | 423,477 | ||
| Discount % | 61% | 58% | 61% | ||
The emphasized row is the net tuition revenue per credit hour for students in that program. However, as noted above, a good portion of that revenue is not coming directly from students. If you were to disaggregate this net tuition revenue for each academic program, what percentage of the revenue would come directly from students? What percentage of the revenue is from Pell Grants and other income-based grants? What percentage of revenue is paid by student loans? What would happen if one of those revenue sources was suddenly reduced or severely restricted indefinitely? These are all questions that institutions should be ready to answer by 2027, when the Department anticipates publishing the program-level results by institution. If you are interested in doing this analysis, Forvis Mazars can work with you to build these disaggregated numbers right into your dashboard, or you can do them yourself using institutional data.
For instance, let’s take the psychology example provided above. Undergraduate psychology isn’t a professional degree program associated with licensure or with a defined career path. According to reputable sources like Payscale,1 it’s one of the lowest-earning degrees five years after graduation. This makes psychology fodder for increased scrutiny. Programs in the arts and humanities will likely have an even steeper hill to climb.
It is important to recognize that these “gainful employment” standards have been proposed and, in one way or another, implemented for close to 20 years by presidents of both major U.S. political parties. This is not a traditional political issue, which means that institutions should not assume this challenge will go away in 2029. We strongly encourage institutions to start thinking about how you will continue to offer some of your bread-and-butter programs, like history, philosophy, and studio art, if you can no longer count on federal tuition support to sustain them. Here are a few things you can ask yourself once you’ve completed the analysis above. You should consider these questions at the program level to develop effective responses.
- Will you voluntarily close this program (which, under the new rules, would allow students to keep their federal funding while you teach out the program)?
- Will you reduce your operations in this program to match whatever revenue your applicants can pay out of pocket?
- Will you identify strategic partnerships with other institutions that will allow you to sustain this program moving forward?
- Will you ask your advancement team to secure donor funding to sustain this program in perpetuity?
- Will you revise your curriculum or approach to help graduates of this program earn enough in the workforce to meet the new criteria?
How Forvis Mazars Can Help
You won’t be able to answer these questions until you know which programs are most likely to be affected if tuition funding is cut.
See our other PEA use case articles to discover numerous ways PEA can help provide strategic value to your institution. Contact our higher education consulting team if you have any questions or if you’d like to hear more about how to build these data points into your dashboards.
- 1“10 College Majors With the Lowest Starting Salaries.” usnews.com, July 21, 2022.