The Department of Education, under President Donald Trump, unveiled a fresh initiative on Monday designed to provide students with insights into their potential earnings post-graduation, before they commit to student loan debt.
This novel “earnings indicator” has been integrated into the Free Application for Federal Student Aid (FAFSA) process. It leverages existing data from the Department of Education to present students with the average earnings information of graduates from their prospective colleges or universities.
Linda McMahon, the U.S. Secretary of Education, emphasized, “More than half of Americans now question the value of a college degree, especially as student loan debt nears $1.7 trillion. Families need a clearer understanding of how higher education relates to actual earnings, and this indicator will offer that clarity. By making earnings data more accessible, this new FAFSA feature empowers students to make informed decisions before incurring debt.”
As students submit their FAFSA applications, they share personal information with their chosen institutions. Now, FAFSA will provide financial data for each selected school. If an institution’s graduates earn less on average than high school graduates, the form will issue a “lower earnings” alert.
The Department highlighted that over 2% of U.S. undergraduates attend colleges where graduate earnings fall below the average earnings of high school graduates.
“These institutions collectively receive over $2 billion in federal student aid each year,” the Department noted in a press release.
“These same institutions receive upwards of $2 billion in Federal student aid annually,” ED said in a press release.
ED explained the tool can help students and parents make more financially savvy education decisions and help high school counselors guide students to make the best long-term decisions for their education and career. ED said students can further explore program-level result using the College Scorecard.
READ MORE: Exclusive — Education Secretary Linda McMahon: Parents, Students Must Prioritize ‘Return on Investment’ for Career Success
The department said the earnings indicator is meant to inform students, not to limit their choices.
“Students and families should have the full picture before making postsecondary education choices, and earnings outcomes are one of many factors students and families should consider alongside cost, mission, location, and personal interests,” ED said.
The data used for the earnings indicator is posted on the FSA Data Center website. ED said data will be actively updated with more recent earnings data as it becomes available on College Scorecard.
Katherine Hamilton is a political reporter for – News. You can follow her on X @thekat_hamilton.
