FAFSA will now tell you if your school has ‘lower earnings’
The Department of Education is adding a new layer of transparency on earnings outcomes for students and their families applying for federal financial aid for college.
Section Announced on December 8 Earnings data will be added to the Free Application for Federal Student Aid. The department says that if a first-time undergraduate student chooses an institution that shows graduates, on average, earn no more than in-state workers (or workers nationally for schools with primarily out-of-state students) and have only completed high school, the student will see a “lower earnings” disclosure.
Ministry, the country’s approximately 1.7 trillion dollars federal student debt I owe and a NBC News poll It reports a growing proportion of Americans who say a college degree is not worth the price, reasons that contribute to the implementation of the statements. Announcements will be made based on publicly available earnings data, including average earnings by institutions. University Scorecardadjusted for inflation.
College Scorecard is an online database of colleges and universities managed by the Department of Education, allowing users to explore and compare schools based on factors such as earnings results, costs, and graduation rates.
“This new FAFSA feature will not only make public earnings data more accessible, but will also enable potential students to make data-driven decisions before they struggle with debt,” Secretary of Education Linda McMahon said in the press release.
The Ministry added the following in its announcement: Federal Student Aid website that the earnings indicator “should not be interpreted as the Ministry making a normative judgment about which institutions are worth attending” and that an institution’s past performance should not necessarily predict the success of an individual student.
Why are potential earnings important when choosing a university?
Going to college is worth it for most students, even if it comes with high out-of-pocket expenses. Federal Reserve Bank of New York survey Found from April 2025. The average wages of college graduates are roughly 68% higher than those of workers without a degree, and the earnings premium tends to increase over the course of individuals’ careers, the researchers noted.
Even when accounting for student debt, degree holders earn nearly $8,000 more per year than those without postsecondary degrees; This is a separate situation. Research from Brookings Institution to create. Nearly 1 in 5 Americans with a bachelor’s degree have educational debt, according to research. Education Data Initiative.
However, those who attended but did not finish college and those who attended for-profit institutions are more likely to default on their student loans than college graduates and those who attended nonprofit institutions. According to New York Fed.
Moreover, some colleges have a history of producing little or no return on investment, with graduates earning significantly more than their peers without postsecondary education.
Most of the colleges flagged by the Department of Education with lower earnings disclosure are for-profit institutions and cosmetology schools. A. 2022 survey A study from The Century Foundation, a progressive think tank, found that 98% of cosmetology programs do not meet the basic standard that graduates go on to earn more than workers with only a high school diploma.
Aveda Institutes of Arts and Sciences and Empire Beauty Schools, two major nonprofit cosmetology school networks with dozens of campuses that will disclose lower earnings, did not respond to CNBC Make It’s request for comment.
The Department for Education says the move to flag potential applicants to universities with a history of lower earnings is aimed at helping students be aware of potential negative consequences before taking out loans.
“This indicator is designed to inform, not limit, student choices,” said Education Undersecretary Nicholas Kent. blog post. “It’s an additional resource that students can use, along with factors like cost, mission, location, and personal interests, to determine the path that best suits their goals.”
The full list of schools flagged with low earnings disclosures is now available for download Here. The data currently reflects the 2021 earnings of workers who finished school in the 2014-15 and 2015-16 school years, adjusted for inflation to 2025 dollars. Earnings for those who completed high school are derived from 5-year estimates for 2019 and 2020 from the Census Bureau’s American Community Survey. The ministry says the data will be updated as it becomes available.
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