The Department of Education is adding another layer of transparency around earnings outcomes for students and their families applying for federal financial aid for college.
The department announced on Dec. 8 it will be adding earnings data to the Free Application for Federal Student Aid. If a first-time undergraduate student selects an institution where the data shows graduates on average don’t earn more than workers in the state — or workers nationally, for schools with primarily out-of-state students — who only finished high school, the student will see a “lower earnings” disclosure, the department says.
The department cited the nation’s nearly $1.7 trillion in federal student debt owed and an NBC News poll that reports a growing share of Americans who say a college degree isn’t worth the price as contributing reasons for implementing the disclosures. The disclosures will draw on publicly available earnings data, including median earnings by institution, according to the College Scorecard, adjusted for inflation.
The College Scorecard is an online database of colleges and universities run by the Department of Education that allows users to explore and compare schools on factors including earnings outcomes, costs and graduation rates.
“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,” Secretary of Education Linda McMahon said in the press release.
The department added in its announcement on the Federal Student Aid website that the earnings indicator “should not be interpreted as the Department passing normative judgment on what institutions are worthy of attendance,” and that an institution’s past performance is not necessarily predictive of an individual student’s success.
Why potential earnings matter when selecting a college
Going to college is worth it for most students, even when it comes with high out-of-pocket costs, a Federal Reserve Bank of New York study from April 2025 found. Median wages for college graduates are roughly 68% higher than for workers without degrees, and that earnings premium tends to grow over individuals’ careers, the researchers said.
Even when accounting for student debt, degree holders earn roughly $8,000 more per year than those without post-secondary degrees, a separate study from Brookings Institute found. Roughly 1 in 5 Americans with undergraduate degrees have debt from their education, according to Education Data Initiative.
However, those who attended but didn’t finish college and those who attended for-profit institutions are more likely to default on their student loans than college graduates and those who attended nonprofit institutions, according to the New York Fed.
Further, some colleges have a history of providing low or no return on investment when their graduates don’t go on to earn much, if any, more than their peers who didn’t pursue post-secondary degrees.
Many of the colleges the Department of Education has flagged with lower earnings disclosures are for-profit institutions and cosmetology schools. A 2022 study from The Century Foundation, a progressive think tank, found 98% of cosmetology programs do not meet the basic standard that graduates go on to earn more than workers with high school diplomas alone.
Aveda Arts & Sciences Institutes and Empire Beauty Schools, two major for-profit cosmetology school networks with dozens of campuses that will have lower earnings disclosures, did not respond to CNBC Make It’s request for comment.
The Department of Education says its move to flag colleges with lower earnings histories to potential applicants will aim to help students be aware of potentially negative outcomes before they take out loans.
“This indicator is designed to inform — not limit — student choices,” Nicholas Kent, Under Secretary of Education, wrote in a blog post. “It’s one additional resource students can use — alongside factors like cost, mission, location, and personal interests — to identify the path that best aligns with their goals.”
The full list of schools that are now flagged with lower earnings disclosures is available to download here. The data currently reflects 2021 earnings of workers who completed school in the 2014-15 and 2015-16 school years, adjusted for inflation to 2025 dollars. High school completers’ earnings are drawn from the Census Bureau’s American Community Survey 5-year estimates from 2019 and 2020. The data will be updated as it becomes available, the department says.
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