Federal Aid For Beauty Schools in Jeopardy
“Do No Harm” Rule Could Put Federal Aid for Beauty Schools at Risk
A new U.S. Department of Education proposal could put federal student aid at serious risk for most cosmetology, barbering and wellness programs—based on how much graduates earn after school compared to workers without a college degree.
Part of a broader higher education accountability rule known as “Do No Harm,” the proposal would evaluate programs using an “earnings premium” test—measuring whether graduates out-earn adults ages 25 to 34 with only a high school diploma or equivalent.
In practical terms, that benchmark is roughly $30,000 to $35,000 per year in many states. If graduates don’t earn more than that shortly after completing their program, the school may fail the test. While the rule is not final and does not impact cosmetology licensing, industry groups say it may not accurately reflect how salon careers grow over time.
What the “Do No Harm” Rule Would Change
Under the proposed rule, the Department of Education would evaluate programs based on whether graduates’ earnings meet or exceed this federal threshold. Programs that fail the measure in two out of three years could lose access to federal student loans. The rule also includes a second test: whether graduates’ student loan payments are affordable relative to their income.
To pass:
- Annual loan payments must be 8% or less of total income or 20% or less of discretionary income
If graduates fall short on both measures, programs risk losing federal aid eligibility.
The Financial Reality Behind Beauty School
Most private cosmetology programs cost approximately $15,000 to $22,000+, with many students relying on federal loans to cover tuition.
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That typically translates to:
- About $150 to $200 per month in loan payments
- Or roughly $2,000 per year
Under the proposed rule, a graduate with that level of debt would likely need to earn at least $30,000 to $35,000 annually to both:
- Keep loan payments within the 8% threshold, and
- Surpass the earnings benchmark tied to high school graduates
This creates a narrow window where graduates must reach a certain income level relatively quickly after leaving school.
Why Beauty Industry Groups Are Concerned About the “Do No Harm” Rule
According to the American Association of Cosmetology Schools (AACS) and other industry groups, the proposed metric could hit beauty and wellness programs especially hard. AACS estimates that 92.5% of cosmetology programs and 90% of massage schools could fail under the proposed measure.
Beauty careers often look different from traditional full-time wage jobs.
Many professionals:
- Start with lower earnings while building clientele
- Earn tips that may not be fully reported
- Work flexible or part-time schedules
- Transition into independent or self-employed roles
Income in this industry often builds over time—not immediately after graduation.
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Industry groups argue that measuring earnings too early may not reflect the long-term earning potential of beauty professionals. “It is critical that the Department of Education recognizes this discrepancy, or that Congress steps in to prevent a terrible outcome,” said Lynelle Lynch, Owner and CEO of Bellus Academy.
The Department’s proposal does include wages and reported self-employment income, but negotiators have raised concerns about income that may not be fully captured, including unreported tips.
Timeline: When Could This Actually Impact Beauty Schools?
The rule is not final yet, and any potential impact would happen gradually over several years—not overnight.
Here’s how the timeline is expected to unfold:
- Now through May 20, 2026: Public comment period is open
- By June 2026: The Department of Education is expected to publish a final rule
- July 1, 2026: Rule officially goes into effect
However, this does not mean schools immediately lose funding.
- 2027: The first set of graduate earnings data would be evaluated
- 2027–2028: Programs receive performance results over time
- As early as July 2028: Programs that fail the metrics in two out of three years could begin losing access to federal student aid
In practical terms:
Any funding changes would likely take at least 2 to 3 years to fully materialize.
Who Decides What Happens Next?
While the “Do No Harm” concept is already part of federal law, the Department of Education is responsible for finalizing how the rule is applied—including how earnings are measured and how programs are evaluated. That process is happening now.
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Industry feedback during the public comment period can still influence:
- How earnings are calculated
- How career paths like beauty are treated
- Whether adjustments are made for industries with nontraditional income models
“The new rule has not been finalized. It’s not too late for Americans to share their voices and hopefully help protect these students and future small business owners. We encourage everyone to tell the Department of Education and White House that you value American workers in the beauty and wellness industry,” said American Institute of Beauty CEO Michael Halmon. Some industry leaders are also calling on Congress to revisit or refine the policy, but any legislative changes would take additional time.
What the “Do No Harm” Rule Could Mean For Hairstylists and Salons
For working hairstylists, nothing changes immediately. But if the rule is finalized as written and programs begin losing access to federal aid over time, the long-term effects could include:
- Fewer students enrolling in beauty school
- Fewer licensed professionals entering the workforce
- Reduced program offerings at some schools
- Increased hiring pressure for salon owners
In short: a smaller pipeline of new talent entering the industry
That is why industry leaders are asking the Department of Education to either exclude certificate programs or adjust the earnings metric to better reflect how beauty careers develop.
How To Submit a Public Comment on the “Do No Harm” Rule
The rule is still in the proposal stage, and public comments can influence how the Department revises or finalizes it. The Department of Education is accepting comments through May 20, 2026, and may make changes based on feedback.
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Stylists, salon owners, educators, students and graduates can submit comments through Regulations.gov.
As decisions are made in the coming months, the impact of this rule will extend far beyond policy. It will shape who has access to beauty education—and ultimately, who gets the opportunity to build a career behind the chair.
This is a developing story and will be updated as new details emerge.
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