My wife runs a cosmetology school in California, founded by her mother three decades ago after she immigrated from Mexico. In the coming days, the U.S. Department of Education is expected to finalize a rule that would cut off federal student-aid access for nearly every school like ours.
The Department has received more than 8,700 comments on this rule and is finalizing it now. Before it does, it should answer one question: of all the workforces in this economy, is cosmetology really the one we should be defunding?
One of the major problems with the rule is that its framework rests on an assumption about the labor market that artificial intelligence is rapidly making obsolete.
Goldman Sachs reported that AI has trimmed U.S. monthly payroll growth by roughly 16K jobs this past year, and expects that number to climb. Stanford researchers found that workers aged 22-25 in the most AI-exposed occupations have seen a 16% relative decline in employment since late 2022.
Every technological revolution leaves behind jobs that looked stable until they weren’t. Switchboard operators, who numbered more than 350K at their mid-century peak — mostly women — were made obsolete in a single generation by automatic exchanges.
The case that today’s entry-level white-collar workforce is now in that position is no longer fringe; it is mainstream economic analysis.
Cosmetologists are not affected by AI in the same way, and almost no one in Washington has noticed why. For the beauty and wellness industry, AI is an enabler. The workforce is overwhelmingly small-business owners who came up through the trade. Their core skill is a hands-on craft.
Their survival depends on secondary tasks — marketing, social media, bookkeeping, customer follow-up — that have nothing to do with their training. For a first-generation immigrant entrepreneur, those tasks have always been the barrier to scaling. Generative AI removes them.
The same tools taking over white-collar entry-level work are what let salon, spa, or barbershop owners write fluent English captions, keep their books, and run follow-up at near-zero cost, without touching the craft they were trained to do.
And yet the Department of Education is about to do something puzzling. Its earnings-accountability rule would, by its own projections, fail roughly 92.5 percent of cosmetology programs nationwide.
The premise sounds reasonable: Programs whose graduates earn less than working adults with only a high school diploma should lose access to federal Pell Grants and loans. But the comparator is wrong. The rule measures cosmetology graduates four years out against a group aged 25 to 34 — workers with seven to 16 additional years in the labor market.
The RAND research group finds the average worker’s wages grow about 50% over the first eight years of work alone. That gap produces a structural failure, not a measurement of program value.
This is the part Washington has not thought through. The comparison group is concentrated in the jobs most exposed to AI: office and administrative support, customer service, data entry, and clerical work.
Findings by Anthropic, an AI safety and research company using real usage data, reveals AI task-coverage above 60-90% for jobs across several office categories. Personal-care work performed by cosmetologists, barbers, estheticians, nail technicians, and similar, sits near the bottom of every exposure ranking in the same research.
Washington has otherwise made skilled-trades expansion a national priority. Market research group JLL projects 2.1 million unfilled trades positions by 2030, with annual economic losses approaching $1 trillion.
Cosmetology education is trade preparation — state-licensure-gated, hands-on, hours-based. Cutting federal aid to those programs at this specific moment is policy moving in the wrong direction.
None of this means career programs should escape accountability, or that weak schools should keep unlimited access to federal aid. It means the test mismeasures the thing it claims to measure — and that is fixable.
Executive Order 12866 and OMB Circular A-4 already require federal agencies to identify significant uncertainties before issuing major rules.
A baseline being actively reshaped by AI is exactly that kind of uncertainty, and the Department’s Regulatory Impact Analysis does not address it. Before the final rule issues, it should.
Eric Jochim is a small-business marketer in Santa Fe Springs, CA. His family owns and operates Beyond 21st Century Beauty Academy, a Title IV-eligible cosmetology school.
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