For generations, we’ve been told that higher education is the surest path to a better life. But too many students don’t feel that way, and often with good reason: They are graduating with mountains of debt and few career prospects.
Last summer, Congress wisely ushered in a new era of accountability in higher education when it passed the “One Big Beautiful Bill.” Along with streamlined repayment options for student borrowers, the law includes overdue benchmarks for earnings, designed to ensure that higher education degrees leave students financially better off than if they had stuck to a high school diploma alone.
These are important steps toward protecting students and taxpayers alike. Yet there is still one glaring carve-out to the “do no harm” standard: certificate programs that often don’t pay off.
Certificate programs may not get a lot of attention, but they are the fastest growing sector in higher education. Today, more than 1,280 programs enroll upward of 220,000 students every year, about 80 percent of them at for-profit institutions. Yet, despite longstanding concerns of predatory practices among many of these programs, Congress has continued to shield them from meaningful oversight.
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Take cosmetology schools, which account for 45 percent of certificate programs. For-profit cosmetology schools first sprang up in the 1920s, as Hollywood gave rise to the first “it girls,” and along with them, new makeup and hair trends. After World War II, federal policies like the GI Bill and the Higher Education Act created expansive financial aid programs intended to lift more Americans into the middle class.
They also paved the way for predatory for-profit schools to game the system. Cosmetology schools needlessly raised tuition to rake in more financial aid dollars.
By the 1970s, bank regulators were sounding the alarm: cosmetology schools had become major sources of waste and abuse. In 1971, a loan officer testifying to Congress confirmed that the largest increases in loans had been among “trade schools and so-called beauty or barber schools.”
The loan officer noted that while cosmetology schools made up only a small, but growing, volume of the loan portfolio, they generated a significant portion of loan defaults. “Who is benefiting from these programs?” he asked. “Are the students benefiting, or are the school operators benefiting?”
We’re still asking that question 50 years later. Today, cosmetology schools market themselves to women and working parents as a pathway to better pay and flexible hours. But research shows that most cosmetology students enrolled today will likely earn less than someone who only has a high school diploma.
Related: Congress exempted beauty schools from rules about how much graduates should earn
Tuition at some cosmetology programs can reach $20,000 a year, yet graduates from certain schools often leave for jobs earning just over $17,000 a year, while burdened by a median student loan debt of $11,000. At the same time, many schools use exploitative business practices under the guise of training programs.
For example, it’s common for cosmetology schools to have paying students “work the floor,” essentially making students cut hair and paint nails for no pay, while the school pockets the proceeds.
If any career education program was in need of reform, it was cosmetology schools. So that begs the question: why did they get a pass?
The answer lies, unsurprisingly, in Washington, D.C. As cosmetology schools grew in popularity, their powerful lobbying arm grew alongside them. At every turn, the American Association of Cosmetology Schools has pushed against the basic accountability measures that other certificate programs are held to in this country.
In 2023, when the Department of Education mandated that all career-oriented programs meet minimum earnings and debt-to-earnings standards, the AACS sued to stop the rule from being put in place. They claimed that unreported tips account for a significant portion of a cosmetology graduate’s earnings, making the “minimum earnings requirement” an unfair burden for these schools.
Yet research shows that nearly 90 percent of salons do, in fact, report tips on W-2 forms. So, it turns out the burden was fair after all.
And what’s worse is that these schools often prey on low-income women and women of color, exacerbating cycles of poverty for the very students they purport to help.
The “One Big Beautiful Bill” was a chance for Congress to end the legal battle over reforming a wasteful industry. Instead, it handed certificate programs, and thus cosmetology schools, an exception.
Related: How cosmetology schools mire students in debt
Helpfully, the Department of Education’s “do no harm” proposal would use existing authority to hold all programs accountable for their earnings. With a final rule on the bill’s provisions anticipated by July 1, public debate continues, especially as cosmetology schools lobby to influence the outcome.
Congress needs to revise the underlying statute to make clear their intent to hold all programs – including certificate programs – to the earnings standard. In the meantime, the U.S. Department of Education must continue to stand firm and enforce regulations that can keep low performers in check.
If a program consistently leaves its graduates worse off, it should lose access to federal student loans, just as an associate or bachelor’s degree program would. That way, schools that deliver real value will survive, while others will be forced to reform or go out of business.
It’s time for cosmetology schools—and other certificate programs like them—to prove that behind the glitter of big promises, there can be gold.
Kelly McManus is executive vice-president of education at Arnold Ventures. The Arnold Ventures has been among the numerous funders of The Hechinger Report.
Contact the opinion editor at opinion@hechingerreport.org.
This story about certificate programs was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for Hechinger’s weekly newsletter.
