U.S. Department of Education Introduces New College Earnings Indicator to Help Students Make Smarter Choices
The U.S. Department of Education has rolled out a powerful new tool designed to help families understand the real value of a college degree. This updated college earnings indicator appears directly inside the FAFSA® process and gives students a clear picture of how much graduates from a particular school typically earn after completing their program. For millions of American families struggling to compare colleges, this college earnings indicator offers a simple, transparent way to evaluate return on investment before committing to tuition and loans.
At its core, the college earnings indicator uses existing federal data to show whether graduates from a selected college earn more—or less—than the average high school graduate. When students fill out the FAFSA and choose the schools they’re interested in, the form will automatically display key financial details. If a college’s typical earnings fall below the high school benchmark, the form will highlight a “lower earnings” warning. This feature is meant to guide students toward smarter, data-driven decisions as they navigate the college selection process.
Education Secretary Linda McMahon noted that today’s families need more clarity than ever. With student debt nearing $1.7 trillion and rising skepticism about the value of higher education, the college earnings indicator is designed to bring greater transparency to the real-world outcomes of various institutions. According to McMahon, making accurate, easy-to-understand data available at the exact moment students apply helps reduce the risk of taking on unnecessary debt. The goal is simple: empower students to make choices that genuinely support their long-term financial well-being.
The introduction of the college earnings indicator comes at a critical time. More than 2 percent of U.S. undergraduates attend colleges where graduates earn less on average than someone with only a high school diploma. These colleges still collect more than $2 billion in federal aid every year. Providing families with clearer information through the college earnings indicator can help shift students away from low-value institutions and toward programs that offer stronger economic outcomes.
This new FAFSA feature is part of the Department’s broader initiative to hold colleges accountable and help students understand the financial impact of their education. The college earnings indicator highlights several important benefits:
First, it promotes greater transparency. Students and families can now see—directly within the FAFSA—whether a school’s graduates typically earn less than high school completers. This gives applicants a realistic view of potential earnings and helps them compare colleges more effectively.
Second, the college earnings indicator uses publicly available data. Anyone can explore additional details through the College Scorecard, where program-level earnings and debt information are broken down in more depth. By connecting FAFSA with the Scorecard, the Department ensures families can access all the critical information they need at the moment they need it most.
Third, the college earnings indicator supports counselors, advisors, and community organizations that help students with college planning. These professionals can use the indicator as a conversation tool to guide students toward higher-value educational paths. Instead of relying on marketing material or assumptions, families can use hard data to match students with colleges that provide real economic opportunity.
Despite its strong emphasis on transparency, the Department stresses that the college earnings indicator is not meant to restrict choices. A student may still choose a lower-earning program based on personal goals, interests, or location. The purpose of the indicator is simply to ensure students see the full picture before making costly decisions. College value depends on many factors, and earnings are only one piece of the puzzle.
The updated college earnings indicator data is now available on the FSA Data Center. The Department will refresh the information as newer earnings data becomes available through the College Scorecard. By keeping this information current, the college earnings indicator will remain a reliable, timely resource for students planning their futures.
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In an era when families are more cautious than ever about college costs, the new college earnings indicator provides a critical layer of transparency. It helps students avoid low-value programs, encourages smarter financial decisions, and brings much-needed clarity to the complex world of higher education.