Remiah Ward’s day at SmartStyle salon inside Walmart was near its end, with just $30 in tips. Despite a year since beauty school graduation, her earnings barely covered rent. She transitioned to stocking shelves at the same Florida Walmart, earning $14 per hour, yet working 18-hour days left her struggling with bills and rest.
The American Institute of Beauty’s admissions officer had painted a rosy picture. Ward was assured she’d easily repay the $10,000 loan borrowed for tuition. Unbeknownst to her, graduates from the school typically earn $20,200 annually, four years post-graduation. Seven years on, her loan remains unpaid.
In July, Congress introduced policies aimed at preventing scenarios like Ward’s, targeting colleges whose graduates earn below high school diploma holders. However, schools like the American Institute of Beauty were excluded. Certificate programs managed to secure an exemption, sparing over 1,280 programs from losing federal student loan funding. These programs, enrolling over 220,000 students, are primarily for-profit, with 45% being cosmetology schools.
Preston Cooper of the American Enterprise Institute noted a “strange donut hole in accountability” where workforce and two-year degree programs face scrutiny, but certificate programs escape it. Certificate programs, offering a quick economic uplift, are the fastest-growing sector in higher education, training people for roles such as hair-stylists and welders. Quality varies, and while some stylists thrive, many struggle with loan repayment due to low early-career wages.
Ward faced this dilemma, pausing her styling career to work at Amazon alongside part-time salon gigs. Without family support for rent and loans, she couldn’t afford full-time salon work essential for building clientele and tips. A representative from the American Institute of Beauty denied promising easy loan repayment.
The cost of for-profit cosmetology schools often exceeds $20,000 for a year-long program, leading to significant debt. In May, the government identified 850 colleges at risk of default, 42% of which were for-profit cosmetology schools. Denise Herman of AIB blamed relaxed pandemic-era policies for nonpayment issues.
July’s “big beautiful bill” mandates two- and four-year colleges ensure graduates earn at least as much as high school diploma holders within four years. Cosmetology schools lobbied for an exemption, arguing against earnings formulas that exclude tips. The American Association of Career Schools (AACS) challenged the gainful employment rule, claiming it unfairly targets career schools.
If the court sides with cosmetology schools, certificate programs may evade accountability on graduate earnings. Critics doubt the Trump administration would enforce gainful employment rules, given past actions. CECU’s Jason Altmire emphasized fairness in accountability measures.
Ward ultimately relocated to Kentucky for affordable living, working at an aluminum factory. She hopes to return to styling once her debt clears, regretting the lack of information when enrolling in beauty school. “They really sugar-coated it,” she noted.
Marina Villeneuve contributed data analysis to this story.
This story about cosmetology schools produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger higher-education newsletter.
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