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.
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2 Important Disclosures for College Ave.
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.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
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). 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. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (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 applicant’s ability to supply the necessary information for submission.
4 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
6 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable interest rates range from 3.54%- 6.40% (3.54% – 6.40% APR). Fixed interest rates range from 3.79% – 6.65% (3.79% – 6.65% APR).
Graduate Rate Disclosure: Variable interest rates range from 2.72% – 6.11% (2.72% – 6.11% APR). Fixed interest rates range from 3.49% – 6.36% (3.49%-6.36% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.47% – 8.35% (1.47% – 8.20% APR). Fixed interest rates range from 4.45% – 10.74% (4.45% – 10.59% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.47% – 7.25% (1.47% – 7.10% APR). Fixed interest rates range from 4.40% – 9.64% (4.40% – 9.49% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 3.09%-6.23% (3.09%-6.23% APR). Fixed interest rates range from 5.48%-8.52% (5.48%-8.52% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.79% – 9.93% (4.79% – 9.85% APR). Fixed interest rates range from 7.39% – 12.94% (7.39% – 12.82% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.88% – 7.38% (3.88% – 7.04% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of May 1, 2020, the one-month LIBOR rate is 0.44%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
|1.25% – 9.44%*,1||Undergraduate and Graduate|
|1.49% – 11.98%2||Undergraduate, Graduate, and Parents|
|3.18% – 13.92%3||Undergraduate and Graduate|
|1.49% – 11.99%4||Undergraduate and Graduate|
|3.52% – 9.50%5||Undergraduate and Graduate|
|3.54% – 6.40%6||Undergraduate and Graduate|