ED Launches New Earnings Indicator Tool

Using the Free Application for Federal Student Aid (FAFSA) submission summary for first-year undergraduate students, the Department of Education introduced a new earnings indicator that will warn students if they indicate interest in an institution where graduates earn less than an adult with a high school diploma.

Specifically, the new tool will label certain higher education institutions as having “lower earnings” if their graduates’ median earnings are lower than a high school graduate in their state, or nationally, if more than half of their students are out-of-state. If a student receives this notification for an institution on their list of schools, they will be able to return to their form and remove that institution from the list of those receiving their FAFSA submission.

The earnings data is pulled from existing data on the College Scorecard. An institution’s graduates’ earnings are based on Title IV recipients who are working four years following graduation. These earnings are compared to high school graduates aged 25-34 in the state or nationally.

A review of the schools flagged by this change shows that private, nonprofits make up about 30%of all programs reviewed, but less than 2%of programs flagged by this change. Out of all flagged programs, 88%are private, for-profit institutions, the overwhelming majority of which do not confer degrees.

The Department has made available additional information, including the list of institutions flagged as “lower earnings.”

For more information, please contact:
Justin Monk