New FAFSA Earnings Indicator will warn incoming students of poor salaries

As part of an ongoing push for increased student outcome transparency, the U.S. Department of Education recently rolled out a new Earnings Indicator as part of the FAFSA process. From the Department of Education press release:

As part of the FAFSA application, prospective students send their personal data to institutions they have expressed interest in attending. Once the form is complete, the FAFSA will present key financial data for each selected institution. If the institution’s average earnings are below the average high school graduate, the form will generate a “lower earnings” disclosure. This information will help prospective students and families better navigate their postsecondary application journey….

More than 2 percent of undergraduate students nationwide attend an institution where graduates earn less than a high school completer on average. These same institutions receive upwards of $2 billion in Federal student aid annually. 

After students complete the FAFSA, if they have opted to send their financial data to an underperforming school, they will receive a warning like this graph below.

Source: The 74

The data sources for the low earnings indicator include U.S. College Scorecard data and American Community Survey data. While most schools are measured against the mean high school graduate salary of their state, schools where more than half of the student population hail from out of state will be measured against the mean high school graduate salary of the nation.

While this is a useful place to begin, both current U.S. College Scorecard data and American Community Survey data are out of date by five years or more. (The data has been adjusted for inflation, and updates are expected to come.) Additionally, U.S. College Scorecard data only tracks students who received Title IV aid and were working and not enrolled in college four years after graduation. While this does include large swaths of the U.S. student base, more work will need to be done to ensure this tool can be more authoritative than a concerning red flag.

The U.S. Department of Education has provided a full list of the earnings data in a spreadsheet. All North Dakota schools that have been flagged for poor outcomes are below:

Flagged for student income outcomes lower than the mean high school graduate income:

  • Josef’s School of Hair Skin & Body-Grand Forks
  • Cankdeska Cikana Community College
  • United Tribes Technical College
  • The Salon Professional Academy-Fargo
  • The Hair Academy
  • Josef’s School of Hair Skin & Body-Fargo

No data available:

  • Nueta Hidatsa Sahnish College