When you apply for financial aid, the amount you qualify for is largely based on the college’s cost of attendance. Yet, few people understand what this important figure really means.
Before accepting an offer, make sure you know what the cost of attendance means, how it’s calculated, and how financial aid offices use it to determine your student aid offer.
Cost of attendance definition
What is cost of attendance, exactly? The cost of attendance, or COA, is a figure calculated by financial aid offices that represents the average cost of attending their college.
As you know, costs vary widely depending on whether you’re going to a community college, state college, or private college. No matter where you’re going, though, the cost of attendance should not be confused with what you are actually going to pay for college.
What you end up paying out-of-pocket will depend on how much financial aid you get first. That’s where COA comes into play — it’s one of four factors used by financial aid offices to determine your financial aid eligibility.
Expenses included in COA
While the cost will vary from school to school, the categories of school expenses included in COA are pretty much the same:
- Tuition and fees.
Types of fees may include activity fees (for maintaining the student center, library, and on-campus gym), health fees (for visits to the campus health center), counseling fees (for career and general guidance), parking fees, enrollment fees, technology fees (for computer labs), and “green” fees (for energy-related expenses).
- Room and board.
This covers the cost of housing and food, whether you live on-campus or off. That said, your off-campus allowance will be limited, meaning it won’t automatically cover whatever you choose to spend on rent or food. If you go over the allowance, the difference will have to come out of your pocket.
- Books, supplies, transportation, and miscellaneous expenses.
The cost of buying your own personal computer or printer may be included in this category.
- Childcare or other dependent care.
This cost allowance is decided on a case-by-case basis.
- Disability expenses.
This is another cost allowance decided on by a case-by-case basis.
- Studying abroad.
First, the program has to be eligible. If it’s approved, the cost allowance is limited to “reasonable” expenses.
Your cost of attendance is calculated by adding all of these qualifying expenses together. Most schools calculate this figure based on the cost of attending a fall and spring semester. However, the COA timeframe may be longer for certain certification programs.
It’s also worth noting that the cost of attendance is generally higher for graduate students.
There is one circumstance in which this list of included expenses will vary. If you are attending school less than half-time, the cost of attendance may or may not include room and board, for example.
Expenses not included in COA
Though the cost of attendance includes basic living expenses, including housing costs, food, and some personal expenses, it’s very limited. That means you’re not going to see your college incorporating any of the following types of cost into your COA:
- Car payments or insurance (the COA allowance for transportation is limited to the cost of commuting and parking)
- Credit card debt
- A new wardrobe
If you budget right, you may have enough extra money here and there to pay a credit card bill or buy a new outfit. But if you have much more than that left over from your student loans, for example, then you’re probably borrowing too much and will pay the price later.
How COA is used to determine financial need
Once your cost of attendance has been calculated by adding up all of the qualifying expenses together, it is then used by the financial aid office to determine your financial need.
Cost of attendance – Expected family contribution = Need-based aid
It’s this figure — need-based aid — that determines how much you are eligible to receive in the form of Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Direct Subsidized Loans, and Federal Work-Study.
But the use of COA doesn’t end there. It’s also used to determine non-need-based aid.
Cost of attendance – Financial aid already awarded (e.g. scholarships) = Non-need-based aid
Non-need-based aid determines your eligibility for Federal Direct Unsubsidized Loans, Federal PLUS Loans, and Teacher Education Access for College and Higher Education (TEACH) Grants.
Shopping around for the best COA
It’s a good thing to have your heart set on a specific school. But if the cost of attendance is too high, you may find that the financial aid offer doesn’t help enough to make it an affordable choice for you.
Keep your options open and shop around for the best deal. That doesn’t have to mean the cheapest option, but it can mean finding an affordable school that doesn’t break your bank for the next 10 to 20 years.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of TCM and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents|
|3.97% – 12.97%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.12% – 10.98%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.00% – 13.00%6||Undergraduate and Graduate|
|4.72% – 9.81%7||Undergraduate and Graduate|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents|
|4.19% – 12.06%9||Undergraduate, Graduate, and Parents|