Beauty industry advocates are urging the U.S. Department of Education to halt a new federal earnings-based accountability rule they say could financially cripple 92% of U.S. cosmetology programs and throw the nation’s beauty industry into crisis.
The Professional Beauty Association, American Association of Career Schools (formerly American Association of Cosmetology Schools), and other organizations argue the ED’s proposed “Do No Harm” provision (DNH), which goes into effect July 1, doesn’t accurately reflect how the beauty industry works — a lapse that could shut down hundreds of cosmetology schools offering federal student aid.
Under DNH regulations, career training programs must prove that their graduates earn more than those with only a high school diploma. Those failing this threshold for two of three years lose access to federal education funding, such as student loans and Pell Grants.
The rule could harm or close about 1,400 accredited cosmetology programs across the U.S., where 70-90% of students access federal financial aid.
The result, advocates say, would be not only mass unemployment of cosmetology faculty and staff, but elimination of a promising career path for thousands of Americans who rely on financial aid to complete their education.
“Federal regulations are about to wreck the industry that gave me everything,” John Paul Mitchell Systems co-founder John Paul DeJoria wrote in an op-ed for Fox News.
Earnings Test Disregards Reality of Beauty Careers
Industry advocates say the new provision has deep flaws in how student career outcomes, especially earnings, are measured and compared.
“I could train 100% of my graduates, with 100% pass rate and 100% placement rate, yet I could fail,” says AACS Vice Chair Stacy Wells, owner of L’esprit Academy in Michigan.
“I looked at the whole Michigan cohort. Not one school, including the community colleges, passed this metric.”
AACS is urging the Department of Education to follow the original accountability measure as passed by Congress in 2025 as part of the One Big Beautiful Bill Act — which had omitted certificate programs like cosmetology.
"The Department of Education put certificate programs back into the rule when they were specifically excluded in the bill that was signed into law," says AACS executive director John D. Russell.
"The best thing right now is to urge the department to follow the law. Certificate programs were not included."
The rules are currently in a public comment period through May 20, with plans to begin tracking in the 2026-27 academic year, with the first potential loss of eligibility in 2028-29.
“The action right now is to make noise,” Wells says. AACS has launched a campaign, My Secret Impact, urging beauty professionals to weigh in with their comments before May 20, providing step-by-step instructions on how to do so.
PBA, on behalf of several plaintiffs including cosmetology schools and advocacy organizations, has filed an amicus brief to stop the rule from being enforced; the case is currently before the U.S. 5th Circuit Court of Appeals.
Potential Fallout Goes Far Beyond Salons
According to PBA, the U.S. beauty industry is made up of more than 1.3 million licensed professionals: 83% women, 47% people of color, and 98% single-location small business owners. It's a steadily growing engine for job creators, economic drivers, and community builders, they say.
“This beauty industry is a global ecosystem that keeps growing more demand,” Wells says.
“You choke this pipeline of talent and everybody’s going to feel it. From manufacturers and distributors to business owners and landlords and the people sitting in the chair. It will have an economic impact and a social impact on communities.”
What the Feds Got Wrong
Here are industry leaders' main concerns about the proposed rule:
- Unfair Comparison Between Cosmetology and “High School” Graduates
The metrics compare cosmetology graduates to “high school graduates” aged 25-34, which is not an “apples to apples” comparison.
The “high school graduate” group often includes people who have had job training such as trades, certifications, or apprenticeships. Plus, “high school graduates” may have several years of work experience, while cosmetology graduates are just starting out in their field.
- Earnings are Evaluated Too Early
The proposed change would ignore average career timelines in an industry where licensed professionals take up to 6 or 7 years to build a steady client base, in effect, undervaluing long-term earning potential.
- Income Data is Misleading.
Reported earnings are artificially low for several reasons: part-time work is not accounted for, tips are often underreported, and many beauty and wellness professionals are entrepreneurs who “take every tax advantage possible, keeping their net income as low as possible,” Wells says.
Given the demographics of the beauty industry, wage gaps exist that aren’t accounted for, Wells adds. “You have a gender wage gap, you have a minority wage gap, you have a part-time earnings wage gap.”
Cosmetology programs, she says, historically have low default rates and have been an effective pipeline for lower- and middle-income populations to enter a secure, flexible, and versatile career in a thriving industry.
“What is the goal really in all this? There is no real clear answer on that,” Wells says of the proposed rule change. “Is it a debt-to-earnings ratio? Because our median loan debt is $6K. $6K is nothing in education debt. It’s a drop in the bucket.
“Many of our schools have low default rates. So there is already accountability there within our current system, making sure we’re delivering a quality education, that debt is low, and that students can pay back their loans.”
Tap here to submit comments about the proposed Do No Harm provision.