The Feds Just Put a Price Floor Under Your Diploma.

Look How Low It Is.

Jul 10, 2026

"Still worth it to you?"

Friday, July 10th, 2026

This week the Department of Education began rolling out a rule with a name I couldn’t have written better myself: the “do no harm” test.

Here’s how it works. If the graduates of a college program don’t earn more than people who never went to college at all, that program gets cut off from federal student loans. By the department’s own count, more than 800,000 students are sitting in programs expected to fail.

Stop and think about what just happened.

The federal government just admitted, in regulation, that college can leave you worse off than skipping it.

The same institution that guaranteed the loans, inflated the tuition, and sold three generations on the degree as the ticket now needs a rule borrowed from medicine. First, do no harm. As if a diploma were a surgery that might kill you.

In The Preparation, Doug, Maxim and I argued that going to college has become the single worst financial decision a young person can make today. People told me that was hyperbole. Now Washington has built a regulation around the same premise.

But here’s the part worth your attention, and it’s my standard advice with any statistic: figure out how it’s calculated.

The test asks one question. Four years after graduation, does the median graduate of a program out-earn a high-school graduate in the same state? The bar sits around $30,000 to $41,000 a year depending on where you live.

That’s the whole test.

Not “did the degree beat the quarter million you spent on it.” Not “did it beat putting those four years into work and compounding skills.” The test doesn’t count debt at all. A graduate earning $42,000 with $100,000 in loans passes. By this yardstick, that program did “no harm.”

Do the arithmetic yourself. Four years at a private university runs roughly $262,000. The prize for that outlay: clearing a $35,000 bar that a 19-year-old heavy equipment operator steps over in his first year, debt-free, with a four-year head start.

Most bachelor’s programs will pass. Roughly 99% of them, per the department’s data. That should comfort nobody. A test this easy doesn’t tell you college is worth it. It only tells you which programs are so bad even the government can’t keep pretending. About 18% of career-focused certificate programs fail. Cosmetology tops the list. Among bachelor’s degrees, the failures cluster in theater, music, and studio art. The rest get a passing grade for out-earning the people the system spent decades calling failures.

Meanwhile, in the same news cycle: layoff trackers count roughly 186,000 tech workers cut so far in 2026, and 56% of this year’s layoff announcements explicitly cite AI. Recent college grads now face higher unemployment than the workforce at large. That’s a reversal. For my entire lifetime the degree meant lower unemployment, not higher.

College is essentially a trade school for white-collar jobs, and those jobs are in AI’s crosshairs. The new test grades programs on the 2025 earnings of students who finished back in 2021, before ChatGPT existed. It’s grading the last war.

So separate what you can’t control from what you can. You can’t control the credential cartel or the pace of AI. You can control what you build.

I’ve hired hundreds of employees. Rare was the young man with a body of work to stand on instead of a piece of paper. The paper tells me next to nothing. The body of work tells me almost everything.

That’s why The Preparation works the way it does. Sixteen three-month cycles: medic, welder, builder, pilot, entrepreneur. 480 committed hours per cycle. A public weekly write-up of what you actually did, and a running log of capabilities anyone can inspect. No diploma. Proof of work. The total cost of all sixteen cycles is about one year at a prestigious university.

I could be wrong on timing. Maybe the white-collar economy limps along another decade. But the mechanism is now plain enough that even the Department of Education wrote it into regulation.

The government just told you where the floor is. Don’t build your (or your son’s) future on it.

Best,

Matt Smith

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