Understanding the New FAFSA Earnings Indicator: What Institutions Should Know

The Department of Education has added a new earnings comparison to the FAFSA Submission Summary. Beginning December 3, students who choose schools where median graduate earnings are lower than those of high school graduates will see an informational note in their FAFSA results. This change does not affect eligibility, loan access, or Title IV participation, but it gives students one more factor to consider when deciding where to enroll.

When Students Encounter the Earnings Note

After submitting their application, students might see the message: “Some of Your Selected Schools Show Lower Earnings.” This note includes a visual comparison of the school’s median graduate earnings with the median earnings of high school graduates ages twenty-five to thirty-four. The baseline uses either state or national data, depending on whether the school mainly serves in-state or out-of-state students. The Department explained this update in its December 3 Electronic Announcement, stressing that it is meant to inform, not judge.

How This Information Is Positioned

The comparison reflects reported wage data only and does not function as a ranking or as a measure of academic quality. As explained in the Department’s Homeroom post, the goal is to support informed decision-making, much as existing FAFSA cost disclosures do. It is one data point within a larger set of considerations students weigh when choosing where to enroll.

Fields with Distinct Entry Models

Some licensure-based programs, including cosmetology and barbering, follow earnings paths that can differ from standard wage structures. Graduates in these fields may begin their careers through client payments, booth rental arrangements, commissions, or gradual business development. Because the FAFSA comparison draws solely on reported wage data, institutions may find it helpful to describe how graduates typically enter and advance within these professions, without disputing the figures themselves. This provides context for early career earnings patterns in service-based fields.

Supporting Clear Interpretation

As more guidance emerges, schools can examine how the note connects to their programs and, when it adds clarity, help students understand how graduates enter their fields and what early pay may look like. The aim is transparency, not penalties.

The earnings data used in the comparison now come from years that include the COVID period, which may have affected income patterns across many industries. As new data becomes available, the Department may update its calculations, giving schools and students a broader view over time. The Department’s earnings methodology resource explains how these comparisons are developed and how state and national benchmarks are determined.

The earnings indicator gives students another way to compare schools. Institutions can help by clearly and calmly sharing this information so students can make informed choices.