BIRMINGHAM, Ala. – The U.S. Department of Education recently launched a new “earnings indicator” to give prospective students clearer information about how graduates from specific colleges fare financially after leaving school.
“More than half of all Americans now say a college degree is not worth the price, and total outstanding student loan debt is approaching $1.7 trillion,” U.S. Secretary of Education Linda McMahon said in a news release. “Families deserve a clearer picture of how postsecondary education connects to real-world earnings, and this new indicator will provide that transparency.
The indicator now appears inside the Free Application for Federal Student Aid, which all Alabama public school students must complete before graduating unless they receive a waiver. The FAFSA calculates how much financial aid a student will qualify for.
When students list the colleges they’re considering, the FAFSA will display each institution’s graduate’s median earnings four years after graduation. If a school’s median earnings for graduates fall below the median of high school graduates, the FAFSA form will show a “lower earnings” warning.
“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,” McMahon said.
Alabama Commission on Higher Education Executive Director Jim Purcell told Alabama Daily News that making the information available should be helpful to parents and students.
“While this metric does involve a variety of factors, and will not account for individual circumstances, it is a step toward helping students and parents make more informed decisions about their education and career choices,” Purcell said.”
“I see it as another opportunity for transparency that will clearly highlight the value of postsecondary education beyond high school.”
While noting that the earnings data offer only a partial picture, University of Alabama Associate Vice President for Communications Monica Watts said the broader evidence shows strong long-term outcomes for UA graduates.
“A recent economic analysis found a UA degree provides lifetime investment returns better than long term real annual rate of return on most U.S. equities and bonds,” Watts said. “An education from the University sets up our graduates for a lifetime of opportunity that benefits our state and expands their personal and career goals.”
The new disclosure arrives as public confidence in higher education continues to decline. A recent Gallup poll found Americans closely divided in their confidence in colleges and universities, continuing a years-long decline driven by rising costs, student debt and questions about the payoff of a degree.
Roughly 2% of undergraduates are enrolled at colleges whose graduates earn less, on average, than high school graduates, according to the department. Those institutions collectively take in more than $2 billion in federal student aid each year.
The measure compares median earnings of college completers four years after finishing their program with the earnings of “working adults” who hold only a high school diploma or GED and are not enrolled in college. Only students who received federal financial aid are included in the data. Earnings data is pulled from W-2s.
The measure uses the most recent data available, which the Department states is earnings data from students who graduated in 2015 or 2016, were working in 2019 and 2020 and not enrolled in college. The numbers are adjusted for inflation to reflect 2025 dollars.
Across Alabama, 13 colleges, all private institutions, show earnings lower than a high school graduate’s.
Alabama’s inflation-adjusted median earnings for high school graduates are $32,860. For schools whose student body is predominantly from out of state or whose campuses are located outside Alabama the comparison is made using the national high school median of $35,490.
The full dataset is posted to the Federal Student Aid website and can be found at this link.
The earnings data matter well beyond FAFSA, though.
Under the One Big Beautiful Bill Act, and beginning July 1, 2026, these comparisons help determine whether a college can continue participating in the federal Direct Loan program. If graduates earn less than high school graduates for two out of three years, a school could lose access to federal loans – a change that could have a negative impact on enrollment.
The Department said the goal is to inform, not restrict, student choice. More detailed data are available on the College Scorecard and the Federal Student Aid Data Center.
The table below lists the relevant data for Alabama’s colleges and universities. Click here if you’re unable to see the table.