Paying for College 101: Knowing Your Cost of Attendance
This is the fifth post in a series entitled “Paying for College 101: What You Need to Know about Financial Aid” by Myra Baas Smith, Executive Director of Financial Aid Services at the College Board.
When you’re reviewing your financial aid package, the cost of attendance should not be a mystery! Simply put, your cost of attendance is a summary of direct and indirect costs you will incur while you are in school. Like the estimated family contribution, your cost of attendance will not reflect your actual out of pocket cost, but is a baseline value for the computation of your need for financial aid.
So what are the components of the cost of attendance? Direct costs are billed by the college and normally payable before the start of classes each semester. The most common direct costs are tuition, room and board. Most schools will have some kind of other billed “fees” – everything from a technology fee, a first year student fee, a student government fee, etc.
Direct costs are normally published on each college’s web site and are most often thought of as out-of-pocket costs. It is important when you do receive a bill for these costs that they reflect your current enrollment and housing plan. Be especially alert to the fees charged and make sure they fit your situation.
Less transparent to you will be the indirect costs – those not billed by the school but associated with the cost of attending college. These costs may include books, supplies, transportation, and personal expenses (shampoo and pizza!). Colleges normally compute an average for this component, but the actual amount you spend may vary.
Your college should publish both its direct and indirect costs with these five components included: tuition and fees, room and board, books and supplies, transportation, and personal expenses. The College Board also displays this information for colleges listed in its College Search resource.
The Importance of Cost of Attendance
Why does the cost of attendance matter to students and their families?
- First of all, total financial aid cannot exceed your cost of attendance. So even if you spend more on personal expenses that you expected, you cannot get financial aid to cover expenses over the amount allowed for in the cost of attendance.
- Secondly, eligibility for some forms of financial aid is based on need, which is calculated by colleges as the amount remaining after your family contribution is subtracted from the cost of attendance.
- Finally, in order to determine your net price – or in simpler terms, your real cost of college – you’ll need to calculate the cost of attendance less any grant or scholarship aid awarded. Recently Congress mandated that colleges provide a net price calculator on their institution’s website. These calculators will help you compare cost of attendance figures as well as the final net price for each school you are considering. This mandate goes into effect in the fall of 2011, so if your school of choice doesn’t have one yet, be sure to check back in the coming year.
Now that you understand the cost of attendance, next week I will discuss the awarding of financial aid and the different types of aid you need to know about.
