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Since You Asked: Q & A Special Edition Cost of Attendance

Q1:  What is the cost of attendance (COA) for student financial aid purposes?

A1:  The COA is an estimate of the expenses a student may be expected to incur in an award year while pursuing their academic program.  It is the underpinning upon which the process of financial aid need determination begins for a student.  The COA includes both the direct and indirect costs of attending school.  The direct costs are those charged directly by the school, such as tuition and fees.  The indirect costs are the other basic necessary expenses a student experiences in order to attend and complete his or her education.

Q2:  Why does the COA budget have to include things other than the costs for tuition, fees, books and supplies?

A2:  The quick answer is that the components of the COA are dictated in the Higher Education Act (HEA), as amended.  The answer in more practical terms, upon which the HEA dictates are based, is that most students would not be able to attend school if the only aid they received was to cover direct tuition and fee costs.  In many instances a student is not able to work, or not as many hours, while going to school, and thus the student does not have sufficient funds to cover basic rent and food costs, etc.

The specifics of the law require that for the typical student the COA must be calculated to include not only the tuition, fees, books and supplies, but also an allowance for room and board, transportation, and personal miscellaneous expenses.  These other indirect costs are referred to by some as the cost of living (COL) components of the COA.

For students who take out a student loan, an allowance for the fees associated with the loan must be included in those students’ COA.  Most typically, the fees a school will include are the Direct Loan origination fee.  If a student also has a private education loan, it may also have fees associated in processing the loan by the lender.  Private education loan fees may also be included in the COA.  The allowance for the amount of loan fees included in the COA may be either the actual loan fees the student incurs, or an average loan fee amount based upon the average fees incurred by all students borrowing a loan of the same type.  The loan fee is only to be included in the COA if the student receives a loan.

Additionally, students with dependent children are able to have the expected amount of child care costs to be incurred during the educational program included in their COA.  (The child care allowance must be only for child care costs while the student is in class, studying for classes, field work, internships, externships, and commuting time for the student.)  If child care costs are applicable to a student’s COA, the amount allowed must not exceed the reasonable cost for the community where provided.

In certain circumstances there may be an allowance for costs associated with other items.  An example of such a situation is the ability to include costs related to a student’s disability.

Q3:  How often do I have to update our COA?

A3:  Naturally, a school wants to ensure they have an accurate COA for use in calculating a student’s need and the subsequent appropriate and accurate awarding of aid to students each year.  The requirement is that the school “must determine an appropriate and reasonable amount.”[1]  There is no specific stipulation as to how often a school’s COA must be updated.  However, in keeping with the requirement to have an appropriate and reasonable amount, a school will need to update its COA’s tuition and fees component (and room and board charges, etc., if applicable) when there are increases in the direct institutional charges.  At most schools this occurs annually.  For the indirect costs, or COL, components of the COA, a school must determine reasonable figures to use.  “Reasonable” is not definitive.  But, best practices would indicate that annually, or at least on a biennial basis, a school should update its indirect cost (COL) components.  The rationale for this is that everyday cost of living does not stay static, but rather, almost without exception, increases some each year.  Therefore, to have a reasonable COA, it must take into account increases in the cost of living.  Depending upon the economy locally and nationally, you may see greater increases in the COL components in some years than others.

Q4:  How do I determine appropriate and reasonable figures to use for the indirect cost COL components of the COA?

A4:  The determination of appropriate and reasonable figures for the COA does take a commitment of resources.  Likely the greatest required resource is time to research the data.  Researching the data needed may include such activities and resources as surveying and/or interviewing students, reviewing local, regional, and possibly national, economic data.

If a survey or interview method of research is utilized, careful thought should be given as to what types of questions might be asked.  Questions should be developed to determine expenditures necessary for a modest[2] but appropriate and reasonable COA budget.

A review of local, regional, and national economic data sources can be used as a tool in your COA development.  Such sources can be helpful in ascertaining the reasonableness of the figures you incorporate in your COA.  In essence, the external sources help validate the appropriateness and reasonableness.  In some locales, the local county extension office may provide “Family Living Programs” that may offer resources related to budgeting and more localized spending patterns.  As an example is the University of Wisconsin-Extension at  A link to find a local county extension office anywhere in the United States is Find Local Cooperative Extension Office in the U.S.–UC IPM.

Q5:  Can I just use the figures that the College Board produces annually on their Web site at

A5:  As was discussed in Q&A4 above, it is imperative that an institution develop COAs that are appropriate and reasonable to reflect costs students attending your institution will incur.  While it is true that the College Board does provide helpful information each year related to national and somewhat regional data (based upon the 24 metropolitan statistical areas (MSAs) in the United States, this information may not likely provide data specific enough to your geographic area, unless your institution is within one of the specific MSAs for which data is provided.  For example, one of the MSAs is for New York, Long Island, and northern New Jersey.  If your school is in the metropolitan New York City area, the data provided for this MSA “may” be applicable for use in your COA.  However, if your school is in upstate New York in a more rural area, the data for the New York City MSA would not likely be able to be utilized at face value as the cost of living in NYC is generally higher than the costs in more rural areas.  Likewise, if your school is in Los Angeles or San Diego, CA, the figures that College Board provides for those MSAs “may” be applicable to your school and students.  After reviewing the data made available by such organizations as the College Board, the Financial Aid Administrator still has to decide if the figures are appropriate, reasonable and applicable to your school’s COA.  It may well be determined that you need to do further research or conduct a survey of student expenses of your actual students.  “The frequency of the review and research, the methods used, and the final determination of component costs remain matters of local institutional control.  COA research is a fundamental part of responsible administration of student financial aid and must be considered essential to the accountability of FAAs as stewards of financial aid funds.”[3]

Q6:  How many different COA budgets do I have to have?

A6:  The answer to this question can depend upon the number of programs your school offers and whether there are different costs associated with the individual programs, for example if there are different tuition rates for different programs and whether there are other costs unique to a particular program.  At a minimum a school will need to have COA budgets for those students who live with parents and those not living with parents.  If your institution provides campus housing (where the student contracts with the school for housing), then you would have a COA budget for on-campus students.  If your school is a credit-hour institution that has students who attend as less than half-time students, you will need a COA budget specific to them since, by law, they do not have the same budget allowance components.  If you have students who live in housing located on a military base, or housing for which the student receives military housing allowance, you will need a COA budget for these individuals that only includes a COA component for “board,” rather than “room” and “board.”

Q7:  What if we have students who are enrolled in one of our distance education (“online”) programs?  How do I determine a COA for distance education (online) students?

A7:  It is important to keep in mind that the law is very specific that the mode of instruction (i.e., in a physical classroom or in a virtual “online” classroom) does not, in and of itself, impact a student’s COA.  In fact, the law specifies that you may not make a distinction in the cost of attendance for a student attending in a physical classroom vs. one attending via distance education (i.e., “online”).  However, you may adjust students’ COA on an individual case-by-case basis with appropriate documentation to exercise professional judgment.  (See “Professional Judgment” in the Application and Verification Guide of the Federal Student Aid Handbook.)

As to how to determine the COA for distance education students that may be “living” in any state in the country or world, you may find it necessary, or at least advantageous, to do a survey of student expenses to have data upon which to base your COL components of your COA no matter where the students may physically reside.

Q8:  I understand that loan fees are a required component of a student’s COA.  How do I determine the appropriate amount to use for loan fees in the COA?

A8:  You can either use the actual loan fees charged a student for the loans received, or you may use an average of loan fees charged to borrowers of the same loan type at your school.

Q9:  What if a student does not complete his program in the originally contracted time frame?  That is, what if it takes the student longer to complete the program?  May we include the costs associated with the additional charges the student will incur in his or her COA?

A9:  A school may not include in a student’s COA any costs associated with “overtime” charges due to failure to complete his or her program within the normal time frame.  Neither may Title IV funds be used to pay for any such “overtime” charges the student may incur as a result of the terms of his or her enrollment agreement or contract.

Q10:  As an ESP client with FAME, will we have to input monthly COA figures for each student?

A10:  No.  ESP clients will enter the monthly figure for the two broad categories of “At Home” and “Not at Home.”  FAME will then enter the figures into a table and they will be used for all programs for all students.

Q11:  As a Freedom Financial Aid client with FAME, do we put in a 9-month or 1-month COL figure for the COA living costs?

A11:  Freedom Financial Aid and ESP clients will input a 1-month COL figure for the COA living costs.  Therefore, if you determine that the College Board’s regional figures on their Web site are appropriate and reasonable for your students’ costs (see Q&A #5 above), you will need to divide the 9-month figure they indicate by 9 to obtain a 1-month figure to input in Freedom Financial Aid (or ESP, as applicable to your school).  You will also, then need to take that 1-month figure and apply it by 54% to arrive at an estimate for the housing component, multiply the 1-month figure by 18% to arrive at an estimate for the transportation component, and multiply the 1-month figure by 28% to arrive at an estimate for miscellaneous and personal expenses.  Note that these percentages applicable to the various budget components may change from year to year.  Again, these are very rough estimates which you should be able to demonstrate are reasonable and appropriate for your students if you have determined to utilize the College Board’s regional figures.  It is best practice to utilize figures that you have researched (as described elsewhere in this set of Q&As) that are more specific to your student population and locale.

Q12:  If we decide we need to do a survey of our students’ expenses, how do we do one?

A12:  If a school determines that a survey would be the most appropriate method for obtaining reasonable and appropriate data upon which to develop its COA, it may use as extensive of a survey, and as sophisticated of a method as it desires to do so.  A survey could be as simple as listing on a form typical expense items a student may incur on a monthly basis and asking the student to record their typical monthly expense amount for that item.

A 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

Likewise, 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 Survey Monkey®, SurveyGizmo, or SoGoSurveyor, etc., to develop their survey instrument[4].  (Most will likely find that such survey tools are fairly simple to utilize and adapt to your own survey.)  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.

[1] The 2015-2016 Federal Student Aid Handbook, Volume 3, Chapter 2, page 3-34.

[2] The 2015-2016 Federal Student Aid Handbook, Application and Verification Guide, Chapter 5, page AVG-122.

[4] FAME does not endorse or vouch for the quality or usefulness of any of the listed survey options or Web sites referenced.  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.


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