{"id":110438,"date":"2025-12-27T16:20:15","date_gmt":"2025-12-27T16:20:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/110438\/"},"modified":"2025-12-27T16:20:15","modified_gmt":"2025-12-27T16:20:15","slug":"new-federal-alert-warns-over-100-colleges-in-california-produce-lower-earnings","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/110438\/","title":{"rendered":"New federal alert warns over 100 colleges in California produce \u2018lower earnings\u2019"},"content":{"rendered":"

This article first appeared in EdSource.<\/a><\/p>\n

Starting this month, prospective students considering any of 132 California colleges \u2014 including cosmetology schools, a music conservatory and even Barstow Community College \u2014 will see a new warning label about alumni earnings when they apply for federal financial aid.\u00a0<\/p>\n

The notification cautions that those colleges are among 1,365 nationwide where the typical graduate earned less after four years of completing their studies than a student who only finished high school. The U.S. Department of Education\u2019s new \u201clower earnings\u201d alerts<\/a> primarily flag for-profit institutions, including beauty and trade schools that offer credentials other than bachelor\u2019s degrees.<\/p>\n

In California, the 132 schools that triggered the \u201clower earnings\u201d label enrolled more than 80,000 students, an analysis of federal data found, and received $277 million in Pell Grants and $314 million in direct loans during the 2024-25 award year. Officials from some of those schools \u2014 which offer varied training in medical billing, welding, massage therapy, arts and other fields \u2014 contend that boiling down their value to a single metric isn\u2019t fair.<\/p>\n

\"AlertA new disclosure on federal financial aid forms alerts students of lower alumni earnings. (Frame grab courtesy of the U.S. Department of Education)<\/p>\n

The earnings indicator, announced Dec. 8, is meant to help students make informed decisions without limiting their choices, U.S. Undersecretary of Education Nicholas Kent\u00a0said<\/a>\u00a0in a blog post. <\/p>\n

The disclosure \u2014 which compares students who completed their college or trade school degree or certificate to workers who only have a high school diploma \u2014 does not prevent students from using federal aid at schools and colleges even if the institutions are tagged with the \u201clower earnings\u201d alert. The label compares the median earnings of graduates to either an in-state or nationwide benchmark for employed high school-only graduates between the ages of 25 and 34. For most California colleges, that means beating the in-state median of $36,710.<\/p>\n

While the alert itself does not carry any immediate penalties, it foreshadows a new law poised to remove federal loan eligibility starting next summer from academic majors or credentials that can\u2019t prove they are increasing graduates\u2019 earnings.<\/p>\n

In California, 122 for-profit institutions fell short of earnings benchmarks. Only five public institutions raised the same alert; most were adult and career education programs. Five private nonprofits in California \u2014 two seminaries, a music conservatory, a drama school and the Hypnosis Motivation Institute in Tarzana \u2014 also received the lower earnings tag.\u00a0<\/p>\n

For-profit beauty and trade schools dominate the list \u2014 with exceptions<\/p>\n

Among the handful of public institutions to gain the \u201clower earnings\u201d indicator is Barstow Community College, which serves a Mojave Desert community halfway between Los Angeles and Las Vegas. Isolated from major urban job markets and a punishingly long commute to the nearest four-year university, many locals find their career prospects limited to lower-paid service, logistics or retail jobs, college officials said.<\/p>\n

In a community where roughly 23% of residents live below the poverty line, most Barstow Community College students rely on federal financial aid to help pay for their education. More than half of the community college\u2019s students receive Pell Grants to defray the annual cost of in-state fees, books and supplies,\u00a0totaling $2,469<\/a>. Federal data shows the median graduate earned $35,468, narrowly missing the statewide benchmark.<\/p>\n

\u201cHelping families earn a sustainable wage is the No. 1 priority,\u201d said Eva Bagg, the college\u2019s superintendent-president. The college also \u201cprovides hope,\u201d helping students to navigate challenges that are all too prevalent in their city, like addiction and domestic violence, she said. \u201cThat\u2019s a huge value that we provide to this community.\u201d<\/p>\n

Starting this month, students planning to attend Barstow Community College and the others on the list will see a \u201clower earnings\u201d disclosure on the Free Application for Federal Student Aid, which students nationwide use to apply for the Pell Grant and federally subsidized student loans. After submitting the FAFSA, first-year undergraduates will see earnings data for each institution they\u2019ve listed on the form, drawing from information that\u2019s already publicly available through the U.S. Department of Education\u2019s College Scorecard.<\/p>\n

\"ComparisonProspective students can now review earnings data for schools they list on federal financial aid forms. (Frame grab courtesy of the U.S. Department of Education website)<\/p>\n

Federal data released earlier this month, alongside the \u201clower earnings\u201d announcement, shows that only about 2% of students nationwide attend an institution that failed to meet the high school-only earnings benchmark. <\/p>\n

The new indicator is not a \u201cnormative judgment on what institutions are worthy of attendance, or the expected return on investment of attending a particular institution,\u201d a department announcement\u00a0said<\/a>. The dataset omits the earnings of 960 postsecondary institutions nationwide, including 159 in California, due to inapplicable or unavailable data.\u00a0<\/p>\n

But Bagg, nonetheless, fears the new flag could discourage would-be students from enrolling at Barstow Community College. She said the metric fails to capture the college\u2019s most recent efforts to develop new career education programs that prepare students for higher-earning fields \u2014 and that it doesn\u2019t reflect local economic realities.\u00a0<\/p>\n

\u201cThis is unfortunate. It\u2019s worrisome,\u201d Bagg said of the earnings indicator. \u201cIt\u2019s just another thing that we need to work extra hard to explain to our students what it really means and instill what the value is.\u201d<\/p>\n

Barstow is the rare public institution flagged by the \u201clower earnings\u201d test. The flag is more often raised at for-profit institutions like Paul Mitchell beauty schools, a franchise that trains students in skills like manicuring and barbering.\u00a0<\/p>\n

Yasmin Niru, the owner of a Paul Mitchell location in Modesto, where federal data suggests the typical graduate earns $23,477\u00a0compared to the statewide median of $36,710 for high school graduates, said the threshold is \u201cnot really fair\u201d because it doesn\u2019t account for tips and the fact that many graduates are young mothers.<\/p>\n

\u201cThey\u2019re working part time; they\u2019re not working full time,\u201d Niru said. \u201cIt\u2019s not a career. It\u2019s their backup income for the majority of them.\u201d<\/p>\n

The school charges $9,400 in tuition and fees, plus $2,540 for books and supplies, according to\u00a0federal data<\/a>.\u00a0College Scorecard data\u00a0<\/a>shows the median borrower who attended the Modesto school has $6,211 in debt after graduation.<\/p>\n

Trump tries a new twist on college transparency<\/p>\n

The lower earnings indicator is the latest in vacillating federal efforts to prevent abuse in the student aid system. The Obama administration was first to enact a\u00a0\u201cgainful employment\u201d rule<\/a>\u00a0that would have cut mainly career and certificate programs\u2019 access to federal student aid if graduates\u2019 debt-to-income ratios rose above a certain level. The first Trump administration\u00a0rescinded<\/a>\u00a0that standard, but then the Biden administration\u00a0authorized new earnings and debt tests<\/a>\u00a0for certificate and for-profit degree programs to be eligible for federal aid.\u00a0<\/p>\n

Most recently, under this summer\u2019s federal budget-reconciliation law, a different accountability benchmark makes many programs ineligible for federal loans \u2014 but not Pell Grants \u2014 if they don\u2019t result in higher earnings than high school graduates. Those measures, sometimes dubbed the \u201cdo no harm\u201d standard, are due to take effect in July. First, federal officials and education leaders are scheduled to review the \u201cdo no harm\u201d implementation rules and the older Biden regulations in January,\u00a0Politico reported<\/a>.<\/p>\n

A career education chain labeled \u2018lower earnings\u2019\u00a0<\/p>\n

The list of institutions landing below the \u201clower earnings\u201d threshold included 13 California locations of the for-profit vocational school chain UEI College. They together serve more than 25,000 students around the state, training students to work as medical assistants, automotive technicians and other trades. Depending on the market, the proprietary college charges California students a sticker price of $19,900 or $21,500, before any discounts provided by grants and loans, federal data show.<\/p>\n

A student who lists the UEI College location in Ontario on their federal student aid application will now receive a notification informing them that a typical graduate earns $33,043 four years after they finish the program. That is compared to $35,490 median earnings among high school-only graduates nationwide, a statistic used since the chain also has some campuses in other states.<\/p>\n

UEI College did not respond to requests seeking comment for this story.<\/p>\n

Colleges, trade and beauty schools are pushing back\u00a0<\/p>\n

The new earnings indicator\u00a0drew concerns<\/a>\u00a0from some college trade associations, who said that they were blindsided by the announcement and that emphasizing poor outcomes obscures evidence that most college degrees have a\u00a0positive return on investment<\/a>.\u00a0<\/p>\n

Some criticism echoes arguments used by a trade association representing cosmetology schools in a\u00a0legal challenge<\/a>\u00a0to the Biden-era gainful employment rules. A federal district judge in October\u00a0sided with the U.S. Education Department<\/a>\u00a0in that dispute.<\/p>\n

Gary Yasuda, the president and CEO of a chain of beauty and career education schools called the Milan Institute, which includes six California schools, that was flagged for low earnings, said the federal announcement caught him by surprise. <\/p>\n

\u201cCandidly, for me, they made this decision without having participation and discussion,\u201d he said.\u00a0<\/p>\n

Yasuda said the beauty school sector had expected an opportunity for more input through\u00a0negotiated rulemaking<\/a>, the process by which the federal Department of Education usually reaches an agreement with stakeholders like schools, accreditors and states about financial aid regulations.\u00a0<\/p>\n

Now, Milan Institute locations in California appear on the FAFSA with what Yasuda called a \u201cyellow flag,\u201d the result of federal data showing the median graduates of its California programs earn as little as $20,955 and at most $34,318.\u00a0<\/p>\n

As it stands, Yasuda thinks the earnings data doesn\u2019t accurately compare Milan Institute graduates to other workers on an apples-to-apples basis. He said the indicator will \u201cpush students who wanted a career in cosmetology away from doing that.\u201d<\/p>\n

EdSource <\/a>is California\u2019s largest independent newsroom focused on Education.<\/p>\n

\n\tRelated\n<\/p>\n

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