The new feature, which took effect this week, displays a "lower earnings" disclosure to first-year undergraduate students after they complete their FAFSA form if any of their selected colleges show poor financial outcomes for graduates.
"Families deserve a clearer picture of how postsecondary education connects to real-world earnings, and this new indicator will provide that transparency," Education Secretary Linda McMahon said in a statement. "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."
The announcement comes as more than half of Americans question whether a college degree is worth the cost, and outstanding student loan debt approaches $1.7 trillion.
When students complete the FAFSA digitally, they may see a yellow warning box stating: "Students graduating from some of the schools you selected don't always earn more money than people with only a high school diploma."
The department determines this by comparing the median earnings of a college's graduates four years after graduation to the median earnings of high school graduates in the same state. For institutions serving primarily out-of-state students, the comparison uses national median earnings for high school graduates.
Students who receive the warning can click through to view detailed earnings information for all institutions listed on their FAFSA. They can then choose to keep their selections, remove flagged schools, or add other institutions. The warning does not affect FAFSA completion, submission, or eligibility for federal aid.
