PRIVATE STUDENT LOANS
When comparing colleges to figure out where to attend, a term that will pop up is the “Cost of attendance” or “COA”. This term is specifically used to describe the total costs associated with attending a particular school and is officially established by the financial aid office each year. This process is required for a school to remain eligible to provide federal financial aid to their students.
The cost of attendance is the total of six different costs including tuition, room, board, books, transportation and miscellaneous expenses. Each category is standardized to reflect commuter or resident student status. For example, if the student lives on campus, their transportation costs would be lower than a commuter student.
The cost of attendance is adjusted each year to reflect increased and/or changing costs.
The cost of attendance is also the maximum amount of funding that can pay to a student’s account during an academic period. It serves as a cap to prevent students from accessing grants, scholarships and student loans far beyond the actual costs of college.
Example of annual Cost of Attendance:
Total Cost of Attendance: $47,197
It is important to note that the total cost of attendance is always greater than the actual balance due on a billing statement. In the above example the cost of attendance is $47,197, but the billing statement will show total charges for tuition, room and board for a total of $43,200. Subtracting $43,200 from $47,197 leaves a difference of $3,997. If the student applies for maximum financial aid, scholarship and student loan eligibility, the entire school balance would be paid, and an additional $3,997 would be given to the student in the form of a refund check. Because refunds are normally processed by the semester, this would create a refund of $1998.50 in the fall, and $1998.50 in the spring.
Refund checks have become normal for college students and are used to cover expenses like computers, books, supplies, extra food, clothing, transportation, and all the expenses that go along with college. However, students need to be put in check with their refunds. Students have been known to use student loan refunds for games, gadgets, gizmos, parties and all manner of non-school related activities. This is why there is a cap on refunds using the cost of attendance as a maximum. It is protection for the students and prevents them from accessing too much refund money at once.
Modifying your cost of attendance:
It is possible to have your cost of attendance increased as long as you meet requirements as established by your financial aid office. The financial aid office can make adjustments to reflect your individual circumstances using Professional Judgment, sometimes referred to as PJ.
The financial aid office may consider educational costs or the family’s ability to pay when deciding on eligibility for professional judgment. Cost of attendance adjustments are limited to specific expenses that relate to the student and are educational in nature or are already listed in the cost of attendance, but are actually much higher. Here are some common areas where students request an increased cost of attendance to reflect actual costs.
By increasing the cost of attendance, the student can fit additional student funding onto the account, enabling a larger refund to be produced. It is important to note that increasing the cost of attendance can effectively increase the overall financial need of the student, and may increase eligibility for subsidized Direct loans or Perkins loans. Before applying for additional private loan funding, always make sure you have maximized eligibility for Direct subsidized and Perkins loans.
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