On Nov. 4, 2022, FSA published a Federal Register notice [87 FR 66683] announcing changes as authorized by the FAFSA Simplification Act (Act), which was enacted into law as part of the Consolidated Appropriations Act, 2021 and amended by the Consolidated Appropriations Act, 2022.
As described in the June 11, 2021 Electronic Announcement, the Department of Education (Department) is implementing these changes via a phased approach that began with the 2021-22 Award Year, with full implementation planned for the 2024-25 Award Year.
The November 4 Dear Colleague Letter (DCL) describes requirements that ED is implementing for cost of attendance (COA), professional judgment, and independent student statuses for the 2023-24 Award Year. We will break down these DCL section into more digestible information.
The FAFSA Simplification Act and the Consolidated Appropriations Act jointly modify the COA components and consumer information pertaining to those components. The revisions provide more clarity and detail to individual COA components, and institutions must implement them for the 2023-24 Award Year.
The Act expands existing consumer information requirements by explicitly stating that each institution must make COA information publicly available on its website. The disclosure must include a list of all COA elements and must appear on any portion of the website that describes tuition and fees. Additionally, ED may now regulate the cost of attendance, except for tuition and fees, and may choose to do so in the future to provide clarity in this area.
The DCL explains what has changed, listed below:
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Costs for rental or purchase of equipment, materials, or supplies has moved out of the definition of “tuition and fees” and into a broader definition of “books, course materials, supplies, and equipment.”
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Transportation expenses may include transportation between campus, residences, and a student’s place of work.
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“Room and board” are now known as “food and housing,” although the meaning of the terms remains the same. Food and housing are grouped as “living expenses.”
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Living expense categories now break out costs associated with specific housing and food situations and require standard allowances within certain categories, such as on or off campus and with or without a meal plan. Review each living expense category below to ensure that all required categories are captured in the institution’s COA policy.
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A standard food allowance that provides the equivalent of three meals each day, regardless of whether a student chooses institutionally owned or operated food services (i.e., board or meal plans). Institutions must provide an allowance for purchasing food off campus for a student that does not elect institutionally owned or operated food services.
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Housing allowances for students residing in institutionally owned or operated housing with or without dependents must be based on the average or median amount assessed to such residents for housing charges, whichever is greater.
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Housing allowances for students living off campus must include rent or other housing costs.
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For dependent students living at home with parents, institutions must include a reasonable standard allowance for living expenses that is not zero.
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For students living in housing on a military base or for which they receive a basic allowance under section 403(b) of title 37, United States Code, institutions must include a reasonable allowance for food on-campus or off-campus but cannot include housing costs.
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For all other students, institutions must include a reasonable allowance based on expenses incurred by such students.
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Institutions may no longer include loan fees for non-Federal student loans borrowed by students.
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The costs of obtaining a license, certification, or first professional credential are no longer restricted to a one-time allowance.
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Course materials and the cost of obtaining a license, certification, or a first professional credential were added to the types of expenses that an institution may include in a confined or incarcerated individual’s COA.
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The types of expenses that an institution may include in the COA for a student who is enrolled less than half time has been broadened to include components not otherwise prohibited by the law.
Students must be enrolled at least half time for miscellaneous personal expenses to count in the student’s COA. There were no substantive changes to the COA components for students engaged in correspondence study or distance education. There were also no changes to the definitions of study abroad expenses, cooperative education expenses, dependent care expenses, and disability-related expenses.
Special Populations
The following student populations have cost of attendance requirements based on their unique situations.
- COA for students engaged in a program of study by correspondence must include tuition and fees and, if required, books, course materials, supplies, and equipment. A school may also include an allowance for travel, housing, and food costs incurred specifically for a period of residential training.
- The cost of attendance for confined or incarcerated students may only include:
- Tuition and fees
- Books, course materials, supplies, and equipment
- The cost of obtaining a license, certification or a first professional credential
- The cost of attendance for students enrolled less than half-time:
- Must include any components (tuition and fees; books, course materials, supplies, and equipment; and transportation) normally applied to students who are enrolled less than half-time, along with any other components (disability expenses, etc.) that are not expressly prohibited for less than half-time students (e.g., miscellaneous personal expenses).
- May also include an allowance for living expenses, including food and housing costs, for up to three semesters, or the equivalent, with no more than two semesters being consecutive.
- For students receiving all or part of their instruction by means of distance education, no distinction may be made with respect to the mode of instruction in determining costs. For example, an institution may not eliminate the transportation cost component for a distance education student.
Additional updated definitions are available on the FSA DCL.
Questions and Answers
The DCL provided eight Questions and Answers specific to COA:
- COA-Q1: Must institutions use the new terms specified in the FAFSA Simplification Act, such as “housing and food” versus “room and board,” throughout their COA policy?
- Not immediately. We understand that it may take some time for institutions to fully update their documentation, publications, policies, and practices with any new terms and phrasing outlined in the Act, such as “housing and food” versus “room and board.” However, we do expect institutions to begin planning for any revisions and to formally make changes as soon as it is feasible within their normal consumer information update process.
- COA-Q2: Costs for materials or supplies required of all students in the same course of study moved from the tuition and fees component to the books, course materials, supplies, and equipment component. Does this mean books, course materials, supplies, and equipment can no longer be included in tuition and fees as allowed under 34 CFR 668.164(c)(2)?
- No. Nothing in the Act prohibits an institution from incorporating books, course materials, supplies, and equipment as part of their tuition and fees nor considering them to be institutional costs. Under the Act, many COA components are broken out into their own specific category. This restructuring of the COA components is simply an organizational reordering to help clarify what items must or may be included in the COA.
- COA-Q3: Is the transportation cost allowance limited to transportation between campus, residences, and place of work?
- No. The language in the Act indicates that institutions “may” include costs associated with transportation between campus, residences, and places of work, but this should not be considered an exhaustive list. Nothing in the Act restricts or modifies previous Department guidance on including transportation costs associated with trips, conferences, or medical residency interviews, if the components are a required part of a student’s program of study. Institutions should develop reasonable costs for transportation based upon measured outcomes that can be demonstrated to the Department upon request. A school can also adjust COA components based upon individual circumstances under their professional judgment policy.
- COA-Q4: When implementing the requirement to include the cost of a first professional credential, does it have to be actual costs, or does the Department allow the use of average costs like it does for most other cost components?
- For a student enrolled in a program requiring professional licensure, certification, or a first professional credential, the institution must now include the cost of obtaining the license, certification, or a first professional credential in the student’s COA. An institution can use actual or average costs of obtaining a first professional credential and licensure/certification based on student needs and program structure. If an institution chooses to use average costs, the institution will need to develop a reasonable basis for the average figure using the actual costs of a first professional credential that they are aware of for the profession that the program prepares the student to enter. The Act removed the one-time cost restriction, allowing institutions to include costs for multiple license or credential test attempts, if appropriate. However, institutions may set a reasonable limit on the number of attempts allowed to be included in a student’s COA.
- COA-Q5: When determining on-campus housing costs, at what point does an institution need to establish its determination of median amounts assessed to such residents for housing charges?
- Under the HEA, institutions have broad latitude when developing median costs associated with residential housing. Institutions should develop and document any reasonable methods used to support median costs including the date they determined the median costs. Median costs could be based on prior year data, current year estimates, or some other reasonable methodology consistently applied to all appropriate students.
- COA-Q6: Does “institutionally owned or operated food services” include institutionally contracted food services via a third party?
- Yes. Contracted food and housing are considered institutional charges and typically make up a significant portion of institutional costs. Many institutions use food contractors and know the exact costs associated with these services. Appropriately including these costs in a student’s COA helps the student to obtain the maximum amount of financial aid permissible.
- COA-Q7: Under the new component associated with living expenses for students attending at least half-time, an institution must develop a living expenses allowance for students living at home with parents that cannot be zero. What are some examples of ways for institutions to derive a non-zero amount when the student is not charged for housing or food by the parents?
- Aside from any specific requirements outlined in the HEA, institutions have very broad discretion when developing reasonable costs associated with COA elements. For this component, institutions should develop reasonable methods to determine a dollar amount greater than zero for living expenses of students living at home with their parents. This may include costs associated with food when taking in-person classes or participating in internships/externships. Institutions could use surveys or other methods to determine if there are any typical housing costs incurred by students while living at home, such as parents charging rent. Institutions must develop an amount greater than zero that is reasonable and supportable.
- COA-Q8: Under the Act, institutions must make publicly available on their website a list of all the elements of COA and disclose such elements on any portion of their website describing tuition and fees. Can the Department give further guidance on where and how institutions can meet this requirement?
- As noted, institutions must make publicly available on their website a list of their COA elements and on any webpage discussing tuition and fees. Under the HEA, institutions otherwise have flexibility in determining specifically how and where to best provide the information. Institutions should be able to demonstrate to the Department a reasonable approach to providing the required information in all the appropriate places.
Source:
DCL: (GEN-22-15) FAFSA® Simplification Act Changes for Implementation in 2023-24