Editor’s Note: This piece highlights the findings of Cut Short, a new, comprehensive investigation by think tank New America into the troubling realities of cosmetology education. The full report unpacks how for-profit beauty schools exploit federal financial aid, burdening students with debt while failing to provide a viable path to financial stability.

In the fall of 2023, the U.S. Department of Education introduced new consumer protections for college students through a federal regulation known as gainful employment. The rule set clear, common-sense benchmarks: career programs must show that graduates earn enough to repay student loans and surpass the average earnings of a high school graduate in their state. Programs that fail either test twice over three years would lose access to taxpayer-funded federal financial aid, which many institutions depend on to survive.

At its core, the rule forces for-profit education to fulfill the promise of higher learning. If a program cannot ensure students earn a credential that leads to stable employment and a livable wage, then it should not be allowed to continue extracting federal funds from vulnerable students.

Yet after the Biden administration finalized these protections in September 2023, an adversary emerged: the cosmetology industry.

The American Association of Cosmetology Schools, or AACS, which represents accredited beauty and cosmetology institutions, sued the federal government in December 2023, arguing that the gainful employment rule would jeopardize the “very existence” of many of its member schools. Their admission was striking: if forced to prove their students achieve meaningful financial stability, many of these programs would go under.

This revelation underscores the findings of Cut Short: The Broken Promises of Cosmetology Education, a report from New America that explores the exploitative and often mediocre training students endure in cosmetology schools. The report details the financial burdens these programs impose, their inadequate educational value, and the policy failures that allow them to persist. It offers concrete recommendations to hold bad actors accountable, improve student learning, and expand economic opportunity.

Consider the absurdity of the beauty industry’s logic. By its own admission, many of its programs would shutter under the gainful employment rule. But if these schools are leaving students with unmanageable debt or placing them in jobs that pay less than a high school graduate’s median earnings, they are doing more harm than good. The federal government should not be bankrolling these poorly performing programs through Pell Grants and student loans.

And yet, that very lifeline fuels a $2.2 billion for-profit beauty school industry. Many cosmetology students come from low-income backgrounds and rely on student loans to enroll. Gaining access to these funds allows beauty schools to increase their enrollment numbers—but also their tuition, capturing even more federal dollars in the process. Rather than providing students with a pathway to financial stability, the system often traps them in debt with little hope of long-term economic security.

The resistance to gainful employment is not the only way cosmetology schools prioritize profits over students. AACS has pushed to prevent more affordable cosmetology programs in community colleges, according to a 2024 industry research report from IBISWorld.

And schools have lobbied aggressively to keep licensure requirements needlessly high, ensuring students remain in school longer than necessary while continuing to collect tuition payments. To qualify for a cosmetology license, students must complete extensive in-person training, which schools insist is crucial for mastering health and sanitation practices. While client safety is paramount, these licensing hour requirements far exceed those of many other professions.

When states attempt to ease licensure burdens, cosmetology schools fight back to protect their interests. In 2017, Texas legislators proposed lowering the required training hours from 1,500 to 1,000—a reduction that would still leave students with more classroom time than is required to become an emergency medical technician. Yet industry lobbyists intervened, helping to kill the bill. It was only in 2019, after sustained pressure, that Texas successfully lowered its licensing hours. This delay exemplifies how the industry prioritizes its revenue over student success.

By prolonging enrollment with excessive licensure hours, cosmetology schools create an artificial dependency on federal student aid, ensuring a steady stream of taxpayer money with little accountability. The result is an educational system that prioritizes financial gain over student outcomes.

This must change. Cosmetology students—many of whom enter the field as artists, entrepreneurs, and caregivers—deserve better. They provide transformative services to their clients and communities, yet they remain at the mercy of an industry that resists reforms that would make their education more affordable and effective. Policymakers must act to protect students, not the institutions that exploit them.