The Trump administration is pulling back federal student loans for cosmetology schools — and it’s a great opportunity for states to stop forcing aspiring beauticians to take on debt just to practice their trade.
Under the administration’s proposed “Do No Harm” rule, colleges and trade schools can no longer enroll pupils using federal student loans if their graduates earn less than early-career workers with only a high school diploma. The logic is that postsecondary education should, at a minimum, make people better off than those who never went to college. If graduates can’t clear this basic benchmark, they are unlikely to be able to afford their loan payments.
Unfortunately, most cosmetology schools fail to meet this very basic standard. Four years after completing their programs, cosmetology graduates earn a median salary of just $27,000 — while similarly aged high school graduates earn around $35,000. As a result, cosmetology schools have among the nation’s worst loan-repayment outcomes, with roughly one-third of borrowers more than three months behind on their debts.
The Trump administration is right to pull the plug: more than 90% of cosmetology schools are expected to fail the “Do No Harm” rule and lose access to federal loans. That will protect hundreds of thousands of students from unaffordable debt. Meanwhile, taxpayers will no longer have to eat the cost when those borrowers inevitably fail to repay.
But the Do No Harm rule should be only the beginning of a broader conversation about how to change the way barbers, hairstylists, and manicurists prepare for their careers. Every state licenses these professions; some, including Nebraska and West Virginia, require them to undergo over 1,800 hours of training before earning the right to work. The federal government has effectively subsidized these excessive training requirements through unconditional student loan subsidies—but now that funding stream is winding down.
States should take the opportunity to cut the number of required training hours to become a licensed cosmetologist. Research has shown that recent reductions in mandated required training hours has reduced tuition and increased enrollment. Some evidence even suggests that cosmetology school profits increase after such reforms.
Continue reading at The Washington Examiner.
Edward Timmons, PhD, is Vice President of Policy at the Archbridge Institute. He leads the institute's economic policy strategy, identifying focus areas and disseminating work to key stakeholders and policymakers. His own research focuses on labor economics and regulatory policy; he is regularly asked to provide expert testimony to U.S. states on occupational licensing reform and the practice authority of nurse practitioners. Dr. Timmons received his Ph.D. in economics from Lehigh University and his B.A. in economics and actuarial science from Lebanon Valley College. He publishes a weekly newsletter on Substack with the latest research and policy insights surrounding occupational licensing.
Preston Cooper
Preston Cooper is a senior fellow at the American Enterprise Institute (AEI), where his work focuses on higher education ROI, student loans, and higher education reform. Before joining AEI in his current role, Dr. Cooper was a senior fellow in higher education policy at the Foundation for Research on Equal Opportunity, a research analyst at the American Enterprise Institute, and a policy analyst at the Manhattan Institute for Policy Research.
His work has appeared in the popular press, including in the Wall Street Journal, the Washington Post, Forbes, Fortune, RealClearPolicy, and National Review.
Dr. Cooper has a PhD from George Mason University and a bachelor’s degree from Swarthmore College.
Economics of Flourishing
The Trump administration is pulling back federal student loans for cosmetology schools — and it’s a great opportunity for states to stop forcing aspiring beauticians to take on debt just to practice their trade.
Under the administration’s proposed “Do No Harm” rule, colleges and trade schools can no longer enroll pupils using federal student loans if their graduates earn less than early-career workers with only a high school diploma. The logic is that postsecondary education should, at a minimum, make people better off than those who never went to college. If graduates can’t clear this basic benchmark, they are unlikely to be able to afford their loan payments.
Unfortunately, most cosmetology schools fail to meet this very basic standard. Four years after completing their programs, cosmetology graduates earn a median salary of just $27,000 — while similarly aged high school graduates earn around $35,000. As a result, cosmetology schools have among the nation’s worst loan-repayment outcomes, with roughly one-third of borrowers more than three months behind on their debts.
The Trump administration is right to pull the plug: more than 90% of cosmetology schools are expected to fail the “Do No Harm” rule and lose access to federal loans. That will protect hundreds of thousands of students from unaffordable debt. Meanwhile, taxpayers will no longer have to eat the cost when those borrowers inevitably fail to repay.
But the Do No Harm rule should be only the beginning of a broader conversation about how to change the way barbers, hairstylists, and manicurists prepare for their careers. Every state licenses these professions; some, including Nebraska and West Virginia, require them to undergo over 1,800 hours of training before earning the right to work. The federal government has effectively subsidized these excessive training requirements through unconditional student loan subsidies—but now that funding stream is winding down.
States should take the opportunity to cut the number of required training hours to become a licensed cosmetologist. Research has shown that recent reductions in mandated required training hours has reduced tuition and increased enrollment. Some evidence even suggests that cosmetology school profits increase after such reforms.
Continue reading at The Washington Examiner.
Edward Timmons
Edward Timmons, PhD, is Vice President of Policy at the Archbridge Institute. He leads the institute's economic policy strategy, identifying focus areas and disseminating work to key stakeholders and policymakers. His own research focuses on labor economics and regulatory policy; he is regularly asked to provide expert testimony to U.S. states on occupational licensing reform and the practice authority of nurse practitioners. Dr. Timmons received his Ph.D. in economics from Lehigh University and his B.A. in economics and actuarial science from Lebanon Valley College. He publishes a weekly newsletter on Substack with the latest research and policy insights surrounding occupational licensing.
Preston Cooper
Preston Cooper is a senior fellow at the American Enterprise Institute (AEI), where his work focuses on higher education ROI, student loans, and higher education reform. Before joining AEI in his current role, Dr. Cooper was a senior fellow in higher education policy at the Foundation for Research on Equal Opportunity, a research analyst at the American Enterprise Institute, and a policy analyst at the Manhattan Institute for Policy Research.
His work has appeared in the popular press, including in the Wall Street Journal, the Washington Post, Forbes, Fortune, RealClearPolicy, and National Review.
Dr. Cooper has a PhD from George Mason University and a bachelor’s degree from Swarthmore College.
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