Proposed federal student aid rule could put Atlanta beauty schools and thousands of students at risk

A Department of Education proposal outlines that trade school program graduates who earn less than a high school graduate could lose access to federal student aid. This is part of a federal effort to reel back on career programs that leave students with debt and low earnings.

The "Do No Harm" policy provision measures vocational success against rigid earnings standards, potentially eliminating Pell Grants and federal loans for aspiring beauty and wellness professionals.

The Department of Education data shows projections of more than 92% of all Cosmetology, barber, and related personal grooming services would be at risk along with 89% of massage therapy programs that would fail the accountability metric.

Programs that fail this metric in two out of three years lose access to Title IV federal financial aid, effectively forcing the schools and programs to close. 

"You take financial aid away from us, you take the school away from us, which ultimately takes away my job and my opportunities as well along with everyone else's jobs and opportunities," Lorenzo Neeley, barber instructor at the Elaine Sterling Institute in Atlanta, said. "It [financial aid] benefits everybody. It gives them [students] a reason to be here but also gives me a job and reason to be here because without them to teach, I'm unemployed."

The original accountability measure that was passed by Congress in 2025, as part of the One Big Beautiful Bill Act, excluded certificate programs like cosmetology.

According to the American Institute of Beauty, more than two dozen accredited schools in Metro Atlanta alone, serving nearly 4,000 students, would lose access to Title IV Financial Aid.

The potential federal earnings-based accountability rule change is something Elaine Sterling, founder and CEO of the Elaine Sterling Institute in Atlanta, said would be devastating to her students who rely on federal aid. 

"We're 84% African American,  minorities, and 94% women," Sterling said. "Most of our students, especially our female students are single moms, so they love that they're able to do this and take care of their children at the same time. Our students; they could not fund this themselves. They would not have had this opportunity to go to school if they did not have access to financial aid. If you think about how we have beauty supply and we have salons and spas, where are they going to get technicians to support their businesses? It takes years to build up a book, the experience, and the ability to be able to raise prices. This Do No Harm rule is doing the opposite. It's harming us."

Sterling said a four-year college degree route was not for her, which eventually led to a successful career in the beauty industry and an undeniable impact on the industry in Atlanta through the launch of her institute, to help others just like her. Sterling emphasized the importance of those who also discover that a four-year college route having an opportunity to find themselves and their passion through opportunities often made possible by some form of financial aid. She said the path may not be for them, especially for single moms, to be able to build a life for themselves and their children at a pace that works around a flexible schedule.

Me'Lisa Matthews is a single mom originally from New York who is currently a master cosmetology student at the Elaine Sterling Institute. She moved to Atlanta for the beauty industry and said the funding to attend beauty school is what gave her an opportunity to make a better life for both her and her son. Matthews said the job goes beyond the chair and should be protected from any potential financial aid drawbacks.

"You're more than just a hairstylist," Matthews said. "You're kind of like a therapist. You might be like a big sis. A best friend. It's important and we wear a lot of hats. Being a single mom and it kind of being hard to acquire childcare and having to take care of bills and things like that, just being able to have access to the financial aid to be able to do that has been and is going to be life-changing for myself and my son. Not only does It directly affect me, it's going to affect my son if I'm unable to provide and also other women and girls coming after me who feel like, honestly, this may be our only option."

Advocating for students just like Matthews is Michael Halmon, president of the American Institute of Beauty. Halmon is also the former chair of the American Association of Cosmetology Schools, representing more than 600 schools nationwide. Halmon works with and keeps in contact with beauty schools across the country and oversees a commonality; these schools that he has built relationships with are expressing frustration and fear over the potential outcome of the Department of Education's recent proposal.

"Financial aid is essential to these students to be able to change their lives," Halmon said. "These individuals may be in a cycle where they're not able to move up and better themselves. This career gives them that opportunity."

Halmon said the industry has a primary foundation of minorities and women, and barber shops and salons are especially celebrated in spaces like Atlanta's black community.

"A barber shop and a beauty salon in the black community is a place that's looked upon very highly," Halmon said. "Where does the individual from the inner city go when those barber shops and beauty salons no longer exists because there's no longer supplied individuals to meet the needs of the community?"

Halmon also said this ruling would lead to a potential labor shortage in an industry that he said is currently projected to grow exponentially over the next decade at a rate that may prove to outpace the national employment growth rate. Halmon said he hopes to see the provisions reconsidered and revised.

The proposed provisions, along with federal student aid and loan policies, are set to take effect on July 1 if upheld.