New FAFSA Indicator Warns Students About Low-Earning Colleges

The Department of Education adds a 'low earnings' flag to help students make informed decisions.

Apr. 17, 2026 at 1:35am

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An abstract, out-of-focus photograph of a college campus scene, with students walking through a hazy, warm-toned landscape of blurred shapes and colors, conveying the concept of transparency around the value of higher education.The Department of Education's new 'low earnings' indicator aims to give students a clearer picture of the potential return on their college investment.Louisville Today

The U.S. Department of Education is introducing a new 'low earnings' indicator on the FAFSA submission summary to alert first-year college students about schools where graduates' median earnings are lower than typical high school graduates in that state. The goal is to provide more transparency around the potential return on investment for different colleges.

Why it matters

With the rising cost of higher education, students and families are increasingly concerned about the value and return they'll get from a college degree. This new indicator aims to give them more data to consider when choosing where to apply and enroll.

The details

The low earnings indicator will appear as a yellow flag on the FAFSA submission summary for colleges where graduate median earnings are below the typical high school graduate in that state. This data comes from the Department of Education's College Scorecard, which tracks both earnings and costs for different institutions. Experts say students should investigate further if a school is flagged, as there could be valid reasons - like a lack of career services support - behind the lower earnings.

  • The low earnings indicator was first introduced in December 2025.

The players

Department of Education

The U.S. federal agency responsible for establishing policies and administering programs related to education.

Jennifer Finetti

A college finance expert with ScholarshipOwl, a scholarship matching and management service.

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What they’re saying

“The FAFSA now has something called a low earnings indicator, which may show if you've chosen to apply to colleges that have graduate median earnings that are less than a high school graduate in your state.”

— Jennifer Finetti, College Finance Expert, ScholarshipOwl

“The earnings data that is provided is based on the state where the college is located. For colleges that do trigger this, there needs to be some concern.”

— Jennifer Finetti, College Finance Expert, ScholarshipOwl

What’s next

Students and families should investigate further if a college is flagged with the low earnings indicator, looking into factors like the school's career services support to understand the potential reasons behind the lower graduate earnings.

The takeaway

This new FAFSA indicator is an attempt by the Department of Education to provide more transparency around the potential return on investment for different colleges, empowering students and families to make more informed decisions about where to apply and enroll.