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The U.S. Department of Education has introduced a new earnings indicator as part of the Free Application for Federal Student Aid (FAFSA) process. This feature will alert students when they apply to colleges where graduates earn less than the average high school graduate. Education Secretary Linda McMahon announced the initiative, emphasizing its role in providing transparency and helping families make informed decisions about higher education.
According to the Department of Education, the earnings indicator will appear on the FAFSA form as a "lower earnings" disclosure if a selected institution's graduates typically earn below the average high school completer. This aims to empower students and families to consider financial outcomes when choosing a college. The data for this indicator is drawn from the College Scorecard, a public database that tracks colleges' student outcomes.
The new feature, which took effect on Sunday (December 7), is part of a broader strategy to enhance transparency in higher education. It is designed to inform students rather than limit their choices, allowing them to weigh earnings outcomes alongside other factors like cost, location, and personal interests. Higher Ed Dive reports that the indicator will not affect a college's eligibility for federal student aid.
The Department of Education notes that more than 2 percent of undergraduates attend institutions where graduates earn less than high school completers, yet these schools receive over $2 billion annually in federal aid. The Department plans to update the earnings data as new information becomes available, ensuring students have access to the most current data.
Education officials encourage counselors and college-access organizations to use this information to guide students in their decision-making process. For more details, the Department directs students and families to resources such as the Federal Student Aid Data Center and the Under Secretary of Education Kent’s Homeroom Blog.