Skip to main content

When students are interested in attending school, naturally they look for one that offers academic programs that prepare them for their career ambitions.  But, once they have found one that offers the academic program they are interested in, there is always a question that soon follows.  That question is:  “How much does it cost?”  The answer given in response to that question may, at times, be less than clear.  (Effective as of January 1, 2016, more specificity will be required in data provided by FAME clients.  Continue reading for more details.)

Naturally, a student is interested in the direct costs applicable to the educational program; things such as tuition, required fees, typical amounts charged for required textbooks, and so on.  But, the reality is that the various costs a student incurs as they attend school include a broader scope of expenses than just those charged by the institution directly.  In order for a student to attend school, it is helpful for them to have a place to live, along with the necessary utilities.  And, most students still have not overcome the basic necessity for food, so there is a cost for those vital commodities as well.  Likewise, it is important for the student’s well being (as well as being appreciated by classmates, the faculty, and staff) that they are able to accommodate the basic expenses required for personal hygiene and laundry.  Further, it is essential for students to be able to actually arrive at the location of their educational study.  Therefore, it is important that the cost of transportation be considered in the costs related to pursuing their academic goals.  So, we see that the amount that it will cost a student to attend school is beyond the direct costs of tuition, fees, books and possibly supplies.  The cost of attendance (COA) also includes those other less specific, but necessary, expenditures that may vary from school to school, or by region of the country in which the student and school are located.  These other indispensable components of living while going to school are commonly called the “indirect” costs of attending school.

While schools may be reticent in their desire to discuss these indirect costs with students, it is important to keep in mind that the U.S. Department of Education (ED) has made it clear that they are to be included in discussions about, and in the awarding, of Title IV Federal Student Aid.  This insistence is simply a result of the way the law itself is written in U.S. Code, Title 20, Chapter 28, Subchapter IV; Part E, Section 1087ll.  The specifics of this section of the law are highlighted in the 2015-2016 Federal Student Aid Handbook, Volume 3; Chapter 2.  It is important to note, however, that ED is prohibited from regulating this section of the law.  Therefore, the legislation itself is self-interpreting.  Yet, it is very clear that when awarding a student Title IV aid, the institution must include both direct and indirect costs when determining the COA and the resulting need (as defined and described elsewhere in Section 1087 of the law).  ED further notes the prohibition of packaging to meet only direct costs in the 2015-2016 FSA Handbook, Volume 3; Chapter 6, page 3-100; and, Chapter 8, page 3-144.

In light of the law’s specific definition of costs associated with attending school, the indirect components of a student’s COA (or, as some refer to it, the cost of living expenses) include allowances for room and board, personal expenses, and transportation costs, among other items for consideration in special circumstances and varying enrollment statuses.  Both, the direct costs (tuition and fees), and an allowance for books and supplies, along with the other indirect costs (room, board, personal expenses and transportation costs) make up the COA for Title IV purposes.  Each participating Title IV-eligible school is responsible to ascertain and provide the complete, accurate, and reasonable COA in information made available to students, and that is used in awarding (packaging) students’ financial aid.

There are several categories of living circumstances for which the cost of attendance figures will vary. The two main categories are 1) students—dependent or independent—who have no dependents and physically live with their parents and, 2) independent and dependent students, not living with their parents.  Other possible COA budgets include dependent students living “on campus” (when an institution provides contracted housing and/or meals) and students who live in housing located on a military base for which a basic allowance is provided.  If your institution is one that has “on campus” living opportunities, it means the school itself would already have the figures applicable to the cost of housing and/or meals that it contracts with the student to provide.  For military personnel that receive a basic allowance for housing, the indirect costs in the COA budget would include an amount for board (food), but not room (rent/mortgage).  A more detailed explanation of the determination of the COA is available in the Federal Student Aid Handbook as well as in the National Association of Student Financial Aid Administrators’ (NASFAA) Monograph Number 24, “Developing the Cost of Attendance”[1] (NASFAA membership is required to access the Monograph.)

For FAME clients, the determination of the figures to use for the COA comes through information shared in partnership.  Those clients utilizing our servicing and/or software provide FAME with the amounts of its tuition, fees, and costs for books and supplies.  Then, unless the school has determined its own indirect cost components, FAME provides the indirect cost of living components based upon the College Board’s published annual figures.  However, effective January 1, 2016, schools will have different options available.  A client school may choose the option of providing the indirect cost of living components of a student’s COA based upon a survey that they have conducted of their students’ actual local expenditures.  An alternative choice being implemented is that a school may elect to utilize the indirect cost components FAME obtains from the College Board’s regional figures.  The regional figures are based upon a specific metropolitan statistical area (MSA) where your school is located.  The MSAs are defined by the U.S. Office of Management and Budget (OMB).  The regional figures for the 2015-2016 award year are available for schools to view on the College Board’s Web site at  These new COA (budget) determination options will be effective (and required) for our clients for all students processed on or after January 1, 2016.  The chosen COA option will be indicated using a selection in a drop-down box in the software.  (More detailed instructions for clients will be provided in a future software release announcement.)

Those schools who anticipate using the figures based upon their students’ actual local expenditures should begin surveying their students now to be ready for the January 2016 implementation.  The survey should be for their current term or period of enrollment.  The period for which a student is asked to report their expenditures should be based upon a weekly expenditure pattern (preferred), or a monthly basis.  The survey that you may give to your students to complete should consist of at least the following basic categories:


  • rent
  • utilities
  • food costs (up to an amount to provide a nutritionally adequate diet)
  • transportation (to and from campus; and/or whether use of public transportation is available)
  • clothing
  • laundry and cleaning
  • personal hygiene and grooming
  • recreation

Some institutions may choose to greatly expand the scope and specificity of their survey data elements for use for other financial literacy-type purposes, e.g., workshops on financial management, budgeting, debt management, etc.  The method of conducting an institutional survey of students’ expenditures is the choice of the school.  Certain schools may utilize such tools as SurveyMonkey®, SurveyGizmo, or SoGoSurveyor, etc., to develop their survey instrument[2].  Other schools may elect to develop their own survey within their own Web portal.  Supported by actual data from the institution’s own students allows a school to detail specific amounts to include for its students in the indirect components of the COA.

An accurate description and dissemination of the total components of a student’s COA are basic to answering his or her question about how much it costs to go to school.  And, accurately collecting, and using, the COA data elements defined in the law is crucial to the compliant and appropriate funding of students as they pursue their educational goals.

[1]NASFAA’s Monograph No. 24, “Developing the Cost of Attendance,” was last accessed on October 28, 2015, on

[2] FAME does not endorse or vouch for the quality or usefulness of any of the listed survey options.  The named surveys are simply listed as examples of the types of survey tools available.  Those survey names with a registered mark (®) are the property of those entities.  A school may conduct an Internet search for any number of other possible survey options.

This material is presented for informational and educational purposes only and should not be considered to be giving legal advice.


Leave a Reply