The Department of Education is providing greater transparency regarding income outcomes for students and their families applying for federal financial aid for college.
The department announced Dec. 8 that it would add income data to the Free Application for Federal Student Aid. According to the department, if a first-time undergraduate student chooses a college where data shows graduates do not earn more, on average, than in-state workers (or national workers in the case of schools with primarily out-of-state students) who have just graduated from high school, that student will be subject to “low-earning” disclosures.
The department cited the roughly $1.7 trillion in federal student debt nationwide and an NBC News poll showing a growing number of Americans believe a college degree is not worth the price as reasons for the disclosure. Disclosures are made based on publicly available income data, including median income by institution from the College Scorecard, adjusted for inflation.
College Scorecard is an online database of colleges run by the Department of Education that allows users to research and compare schools by factors such as revenue, costs, and graduation rates.
“This new FAFSA feature not only provides easier access to public income data, but also empowers prospective students to make data-informed decisions before taking on debt,” Secretary of Education Linda McMahon said in a press release.
In an announcement on the federal student aid website, the department added that the income metrics “should not be construed as the department making prescriptive judgments about which institutions are worthy of attendance,” and that an institution’s past performance is not necessarily predictive of individual student success.
Why income potential matters when choosing a college
An April 2025 New York Fed study found that attending college is worth it for most students, even if it comes with high out-of-pocket costs. Median wages for college graduates are about 68% higher than for workers without a degree, and the earnings premium tends to increase with an individual’s career, the researchers said.
Another study from the Brookings Institution found that even after accounting for student loans, those with a degree earn about $8,000 more per year than those without a higher education degree. According to the Education Data Initiative, approximately 1 in 5 Americans with a bachelor’s degree has education debt.
But people who attended college but didn’t graduate or attended for-profit institutions are more likely to default on their student loans than those with college degrees or those who attended nonprofit institutions, according to the New York Fed.
In addition, some universities have a history of low or no return on investment, where their graduates earn less, if any, than other universities whose graduates did not earn a higher education degree or higher.
Many of the universities cited by the Department of Education as having low income disclosures are for-profit organizations and cosmetology schools. A 2022 study by the Century Foundation, a progressive think tank, found that 98% of cosmetology programs fail to meet the basic criteria of allowing graduates to earn more than workers with just a high school diploma.
Aveda Arts & Sciences Institute and Empire Beauty School, the two largest networks of for-profit beauty schools with dozens of campuses and lower revenue disclosures, did not respond to CNBC Make It’s requests for comment.
The Department of Education says the move, which flags universities with poor income histories to potential applicants, is aimed at ensuring students are aware of the potential negative consequences before taking out a loan.
“This indicator is designed to inform, rather than limit, student choices,” Education Undersecretary Nicholas Kent said in a blog post. “This is one of the additional resources students can use in conjunction with factors such as cost, mission, location, and personal interests to identify the path that best fits their goals.”
A complete list of schools currently reporting low revenue disclosure can be downloaded here. The data currently reflects 2021 earnings for workers who left school in 2014-15 and 2015-16, and is adjusted for inflation to $2,025. Earnings for high school graduates are derived from five-year estimates from the Census Bureau for 2019 and 2020. Data will be updated as it becomes available, the agency said.
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