New Tool Launched to Help Students Assess Post-Graduation Earnings
On Monday, the Department of Education under President Donald Trump introduced a tool designed to help students evaluate their potential earnings after graduation, particularly before they take on student loan debt. This new feature, referred to as “profit indicators,” has been incorporated into the Free Application for Federal Student Aid (FAFSA) process. It utilizes existing data to provide insights into the average post-graduation income of students from the colleges under consideration.
U.S. Secretary of Education Linda McMahon noted, “More than half of all Americans now believe a college degree isn’t worth the cost, while total student loan debt is nearing $1.7 trillion.” She emphasized the need for families to have a better understanding of how higher education correlates with actual income. This new tool aims to enhance transparency in educational decisions. “It not only makes income data more accessible but also enables prospective students to make informed decisions before incurring debt.”
When a student submits a FAFSA application, their personal data is sent to the selected institution. With this new tool, financial information about each institution will be visible as students complete the form. It will also highlight if the average income of graduates from that institution is less than what high school graduates generally earn. If it is found to be lower, the FAFSA will signal this with a “reduction in revenue” warning.
Currently, around 2% of undergraduates across the country are enrolled in colleges where graduates earn, on average, less than those with only a high school diploma. Interestingly, these institutions receive over $2 billion in federal student aid annually.
The Department of Education stated that this tool is not meant to restrict student choices but rather to empower them and their families in making financially sound educational decisions. High school counselors can also leverage this information to advise students on choices that could lead to successful long-term outcomes in their careers.
The revenue indicators aim to help students see the bigger picture when considering postsecondary education, taking into account income outcomes among a range of factors like costs, mission, location, and personal benefits.
The data that feeds into these profit indicators will be routinely updated to reflect the latest earnings information. For access to the data, the department directs individuals to their data center website.
