On December 8, 2025, the Department of Education published an Electronic Announcement stating that, effective December 7, a low earnings indicator will be implemented on the 2026/2027 FAFSA. This indicator will appear on a first-year undergraduate student’s FAFSA Submission Summary for any institution they select to receive their FAFSA data if ED determines that an undergraduate completer from the institution can expect to earn less than either:
1. A typical high school graduate in the same state
2. The national average of high school graduates if the institution’s student body is predominantly out-of-state students
How the Indicator Appears to Students
Appearing in the form of a yellow alert box, this indicator will allow students to see which of their selected schools ED has determined to have low earnings compared to high school graduates. ED states that this measure is intended to increase transparency for first-year undergraduate students to guide their decision-making when considering postsecondary education pathways.
Earnings Data Sources and Methodology
Derived from three sources, the earnings data driving the low earnings indicator is calculated using the median earnings of undergraduate completers, four years after graduation, adjusted for inflation. This sampling methodology inherently creates a sizable gap of time between the data on which institutions are being evaluated and the present day, as the cohorts currently being used to determine median earnings for 2026/2027 are the 2014-15 and 2015-16 completer cohorts.
The institutions excluded from this indicator are as follows:
1. Institutions located in U.S. territories (except Puerto Rico, where institutions are being evaluated for low earnings)
2. Institutions with no published median earnings for the 2014-15 and 2015-16 completer cohorts
3. Institutions that only confer graduate-level credentials
Department of Education Clarifications and Institutional Impact
In the Electronic Announcement, ED offers the following reassertions: “The earnings indicator should not be interpreted as the Department passing normative judgment on what institutions are worthy of attendance, or the expected return on investment of attending a particular institution. Past post-graduation success of graduates at an institution is not necessarily predictive of the likely earnings of any individual borrowers. Furthermore, the data presented here is provided at the institutional level. Post-graduation earnings will vary by degree and program type, which are not reflected in the data presented. Some institution programs may have higher or lower average post-graduation earnings than the institutional earnings data presented on the FAFSA Submission Summary”.
Without the possibility to appeal the data under Gainful Employment regulations, McClintock & Associates is concerned that the low earnings indicator may increase the likelihood that students misconstrue what their earnings reality may be after attending an institution flagged by the indicator.
This low earnings alert, driven by decade-old data, not only presents a risk of creating a misleading picture of post-graduation outcomes but may may also lay the framework for harm to enrollment and increased skepticism from the student body. In light of this, our team at M&A stands ready to support your institution in navigating the implications of the low earnings indicator.
McClintock & Associates helps institutions meet complex reporting requirements with confidence—combining deep regulatory knowledge, data strategy, and operational insight to keep clients ahead of compliance deadlines.
If you have questions or need assistance preparing for these changes, please contact us.
