What Is COA And How Does It Affect My Student Loan?
The Cost of Attendance (COA) is the estimated yearly cost of attending a college or a university. Financial aid authorities of colleges across America use COA to determine the student’s eligibility for financial aid like loans and grants.
Keep reading to learn how it affects your student loans.
What Is The Cost Of Attendance?
COA may vary depending on several factors like out-of-state students, in-state students, students who live at home, and for students who are enrolled part-time. It may also be different for different grades. The calculation can be broken down into direct and indirect costs.
Direct costs cover tuition fees, room, board, and other related fees. Indirect costs may vary and are not always directly paid to the school or college, yet are vital constituents of every academic session. This includes transportation, books and other requirements, and a variety of personal expenses.
The net price calculator for every college is different, but families should expect to provide basic personal information and the dependence of a student in addition to the adjusted gross income and assets of each parent when applying for financial aid.
How It Works
Colleges and universities are required to calculate an estimated annual cost of attending those particular educational institutions and publish it on their official website. This is to aid the parents and students in comparing the schools and the costs for each academic school year. It is important to note that these costs are generally estimated and are not actual costs. The actual costs are generally lower than the estimates. Most of the expenses are under the control of the students and can be reduced substantially.
Filling out the Free Application for Federal Student Aid (FAFSA) helps the college authorities determine the EFC (Expected Family Contribution). EFC is the money that is estimated by the government that you can afford to pay towards the college expenses. This is generally dependent on the income of the family and many other factors including assets. The difference in money that lies between the cost of attendance and the EFC can be covered by financial aid and student loans.
Colleges establish several formal COAs which reflect different living expenses (off-campus, on-campus or at home) as well as in-state and out-of-state tuition costs. Depending on your major, participation in extracurricular activities, and travel expenses, your actual costs of attendance may be more than those advertised.
For instance, if you are a resident student staying on-campus, an estimated calculation would be something like this:
| Estimated Costs | |
| Tuition & Fees | $13,500 |
| Dining & Housing | $7,300 |
| Supplies & Books | $800 |
| Miscellaneous & Personal Expenses | $2,500 |
| Total Cost For 1 year | $24,100 |
Federal Loans And COA
It is not possible for the students to file for financial aid or federal loans in excess of the difference financially after subtracting the EFC of the family from the COA. For example – If a particular college has a COA of $18,000 and the student applying for it has an EFC of $13,000, then the maximum financial aid available is $5,000. Students and parents can apply for this amount in the form of Pell Grants or subsidized assistance.
Likewise, if the educational institution the student wishes to apply for has a COA of $18,000 and has obtained $5000 aid, which is need-based, then the student can gain aids that are non-need based and unsubsidized loan up to a limit of $13,000.
There are also various limits that determine the total amount students can apply for as a loan or aid. This can be distinguished into total and annual limits. For example – second year undergraduate students can receive a maximum of $6,500 annually, and only $4,500 can be in the form of subsidized loans. If their parents are unable to get the PLUS loans, they may be eligible for $10,500 annually with $4,500 as subsidized loans.
Bottom Line
The COA is generally published by colleges and universities to let students know the maximum cost they may incur while studying every year. It is important to remember that these are not the actual costs, but mere estimates, and often, the actual costs are lower.
It is also posted so that you can make a comparison between different colleges and universities with relative ease. Make sure to use the net COA calculators provided by the colleges to get a better estimate and plan your need for financial aid accordingly.
