The U.S. Department of Education has introduced a new earnings indicator designed to provide students and families with more information when making decisions about college enrollment. This tool is integrated into the Free Application for Federal Student Aid (FAFSA) process and uses existing department data to show average post-graduation earnings for each institution.
When students complete the FAFSA and list their preferred colleges, the form will now display key financial information for each school. If an institution’s average graduate earnings fall below those of the typical high school graduate, a “lower earnings” disclosure will appear on the application. The goal is to help prospective students and their families understand potential financial outcomes after graduation.
“More than half of all Americans now say a college degree is not worth the price, and total outstanding student loan debt is approaching $1.7 trillion. Families deserve a clearer picture of how postsecondary education connects to real-world earnings, and this new indicator will provide that transparency,” said U.S. Secretary of Education Linda McMahon. “Not only will this new FAFSA feature make public earnings data more accessible, but it will empower prospective students to make data-driven decisions before they are saddled with debt.”
According to the Department, over 2 percent of undergraduate students attend institutions where graduates typically earn less than those with only a high school diploma. These schools collectively receive more than $2 billion in federal student aid annually.
The new indicator is part of broader efforts by the Department to increase transparency in higher education outcomes. Its features include highlighting schools where graduates’ median earnings are lower than high school completers, making use of publicly available data at critical decision points, and supporting counselors and professionals who guide students through college choices. Additional program-level results can be accessed through the College Scorecard at CollegeScorecard.ed.gov.
The Department notes that while the indicator aims to inform choices, it should not be seen as limiting them. It encourages families to consider various factors such as cost, location, mission, and personal interests alongside potential earnings when choosing a postsecondary institution. Data supporting this new tool have been posted on the FSA Data Center and will be updated as more recent information becomes available via the College Scorecard.
Further details about the earnings indicator can be found in Under Secretary Kent’s Homeroom Blog, Federal Student Aid’s Electronic Announcement, and at the FSA Data Center.
