Cost of Attendance (COA)

What Is Cost of Attendance (COA)?

Cost of attendance (COA) is a college's total estimated expenses for one year including tuition, room and board, books, supplies, transportation, loan fees, and miscellaneous expenses. A school's cost of attendance is used to determine each student's eligibility for financial aid such as grants and loans.

Understanding Cost of Attendance

Federal law defines the expenses that colleges must include in calculating cost of attendance. Most colleges publish those costs on their websites and elsewhere. That makes it relatively easy for students and parents to compare schools side by side.

Bear in mind that cost of attendance represents the "sticker price" of the college, and many students ultimately pay less.

Many schools calculate and publish more than one cost of attendance, based on the circumstances of their students. For undergraduate students, there may be different COAs for those who live on campus or off campus, or commute from home. State colleges and universities list different COAs for in-state and out-of-state students. Graduate and professional students may have different COAs.

Some colleges also break their COAs down into billable, or direct, charges (such as tuition and room and board) and indirect expenses that a student would pay for separately (such as transportation or meals off campus).

Cost of attendance is a critical number for students and parents who use the Free Application for Federal Student Aid (FAFSA).

In deciding how much financial aid, if any, to offer a student, colleges subtract that student's Expected Family Contribution (EFC) from the school's cost of attendance. The EFC is determined by the information the student and their parents provide when they filled out the FAFSA. It is the government's estimate of what the family might reasonably be expected to pay for a year of college, based on its income, assets, and other factors. The number is used to identify the amount of financial aid that a student is qualified to receive.

The confusingly-named Expected Family Contribution (EFC) will be renamed the Student Aid Index (SAI) to clarify its meaning in July 2023. It does not indicate how much the student must pay the college. It is used to calculate how much student aid the applicant is eligible to receive.

That financial aid might include federal Pell Grants, subsidized and unsubsidized loans, and part-time work-study jobs. Grants and subsidized loans are intended for students with "exceptional financial need," while unsubsidized loans may be available to students and parents regardless of need. It's worth remembering that while loans will reduce a student's net college costs in the short term, they will eventually have to be repaid in most cases. Grants and scholarships, however, are gifts.

Colleges can also help bridge the gap between their COA and the student's EFC with non-federal resources, such as merit scholarships. And, of course, students may be able to obtain scholarships from other sources, such as their state or private scholarship programs.

Can I Borrow More Than the Cost of Attendance?

Federal loans and other financial aid can't exceed the college's cost of attendance minus the family's EFC. The office of Federal Student Aid gives the example of a student whose college has a COA of $16,000 and whose EFC is $12,000. The student would be eligible for a maximum of $4,000 in need-based federal aid, such as subsidized loans or Pell Grants. Similarly, a student whose college has a COA of $16,000 and has received $4,000 in need-based aid and private scholarships would be eligible for a maximum of $12,000 in non-need-based aid, such as unsubsidized student loans and PLUS loans for parents.

The amount that the student can borrow is subject to both annual and total limits. For example, first-year undergraduate students defined as dependents are generally limited to $5,500 in loans, no more than $3,500 of which can be in the form of subsidized loans. In total, such students may borrow no more than $31,000, only $23,000 of which can be subsidized. If their parents are ineligible for PLUS loans, however, students may be able to borrow more money in the form of unsubsidized loans.

Private lenders, such as banks and other financial institutions, can be another source of college funding. While their loans are generally limited to the college’s cost of attendance, just like federal loans, they may have higher annual or total limits.

Private loans have some drawbacks. The student is likely to need a co-signer with good credit. The interest rate may be higher, and the repayment options less flexible, than on a federal loan. For those reasons, it makes sense to consider private loans only after you’ve exhausted all the federal aid you’re eligible for.

Cost of Attendance and 529 Plans

A school's cost of attendance is also used in determining which expenses are eligible for tax-free withdrawals from 529 college savings plans. If, for example, the student decides to live off campus instead of in a college dorm, withdrawals from the 529 plan can cover an amount equal to the college's listed room and board charges, but no more than that.

Student loans reduce the cost of attendance on a short-term basis, but remember that they will have to be paid back eventually — with interest.

The Bottom Line

A college's official cost of attendance can be useful in comparing schools and formulating a budget. But don't let the big numbers scare you. Most students pay less than the full cost of attendance, once financial aid is figured into the equation. In fact, the 2020 NACUBO Tuition Discounting Study, conducted by the National Association of College and University Business Officers, reported that most students received grant aid in 2020-2021 and were awarded larger grants than in previous years — covering an average of 60.3% of listed tuition and fees for first-time undergraduates and 54.3% for all undergraduates. Nearly 90% of first-year students and approximately 83% of all undergraduates received some form of institutional grant aid.