Choosing a college is one of the biggest financial decisions a student and family will make. To support more informed decisions, the U.S. Department of Education has introduced a new “lower-earnings indicator” that now appears on a student’s FAFSA Submission Summary. This tool provides clearer insight into typical earnings outcomes for graduates of the colleges a student lists on their FAFSA.
“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.”
What the New Indicator Shows
This lower earnings indicator applies only to first-year undergraduate students. It identifies schools where graduates’ median earnings are lower than those of typical high school graduates in the same state, or lower than those of typical high school graduates nationally if the school serves primarily out of state students.
According to the Department of Education, more than 2% of undergraduate students nationwide attend institutions where graduates earn less than the average high-school completer. These institutions collectively receive about $2 billion in federal student aid each year.
Where does the data come from?
The information comes directly from publicly available College Scorecard data and is adjusted for inflation (to June 2025 dollars) to give families the most accurate snapshot possible.
Institutions can view the data used for the earnings indicator on the FSA Data Center. Additional details on the data sources and methodology are also available on the FSA Data Center. Note that the data and earnings indicator on the FAFSA Submission Summary will be updated as more recent earnings data becomes available and is updated on the College Scorecard.
What It Means for Students and Families
The purpose of the new indicator is simple: greater transparency. For years, families have struggled to evaluate the financial payoff of specific colleges or programs. By placing earnings data directly within the FAFSA workflow, the Department of Education hopes students will more carefully consider the long-term financial implications of their choices.
Importantly, this indicator does not affect financial aid eligibility. It has no impact on the Student Aid Index (SAI), Pell Grants, federal loans, or any part of the aid calculation. Instead, it serves as a prompt to do deeper research when a college may offer weaker economic outcomes.
FSA’s Disclaimer
As part of the announcement of the new earnings indicator, FSA stated that: “The earnings indicator should not be interpreted as the Department passing normative judgment on what institutions are worthy of attendance, or the expected return on investment of attending a particular institution. Past post-graduation success of graduates at an institution is not necessarily predictive of the likely earnings of any individual borrowers. Furthermore, the data presented here is provided at the institutional level. Post-graduation earnings will vary by degree and program type, which are not reflected in the data presented. Some institution programs may have higher or lower average post-graduation earnings than the institutional earnings data presented on the FASFA Submission Summary. Prospective borrowers should not rely on this data as a benchmark for what their likely post-graduation earnings will be. ”
Use the Indicator Wisely
While the indicator is a useful tool, it shouldn’t be the only factor in deciding where to attend. Earnings vary widely depending on major, career path, location, and personal choices. Students should use this data as one part of a fuller evaluation that includes program quality, costs, support services, and individual goals.
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