Foreign Schools Cost of Attendance: Understanding the Components and Considerations

1. Session #46 Foreign Schools Cost of Attendance Jamie A. Malone | Dec. 2013 U.S. Department of Education 2013 FSA Training Conference for Financial Aid Professionals

2. General Considerations

3. Where is COA in the Awarding Process? Cost of Attendance • EFC Financial Need • COA varies by institution and program • EFC stays the same at every school • School tries to meet the student’s need

4. COA Theory • Used to determine students’ eligibility for Direct Loan • Sets a limit on total aid a student may receive • Provides students with a projection of what costs will be • Should be reasonable and realistic • Does not imply that all costs will be funded • Generally established through development of standardized COA

5. COA Theory • COA is not intended to account for all expenses a student may incur in deciding to pursue a degree overseas • Only those COA components specified in statute • COA is for the student, not the student’s family • Allowance for maintenance of a family is via the Income Protection Allowance (IPA) which offsets the student’s total income in the EFC Formula • COA should allow the student to live reasonably as a student • The institution, not the student, determines maintenance levels and how they translate into dollar amounts in the COA • Use of standardized cost (while not required) is a best practice

6. Period of Time Covered by COA • COA represents costs over a specific period of time • Student’s aid (Direct Loan) is “packaged” for the period of time covered by the that student’s COA. • Generally the academic year, e.g. fall/spring • Could be a single term • COA may only include those costs associated with a given period of enrollment

7. Use of Standard Cost Components • Allows for use of averaged costs • Facilitates packaging large numbers of students • Establishes an overall framework for costs • More standard and useful to students looking at program costs than COA constructed on a student-by student basis

8. Averaging Expenses • You may use average rather than actual expenses • Must be averaged for students with the same enrollment status • Example: Using an average tuition and fees amount for all full-time students as opposed to the actual tuition and fees for each individual student • You may have different standard costs for different categories of students • If standard cost categories are established, you must apply cost allowances uniformly to all students in those categories

9. Averaging Expenses • You cannot combine COA figures for different enrollment statuses • Extra costs for certain programs may be accounted for even with standard costs components • Example: Lab fees for certain science courses

10. COA Components Overview • COA is defined in the law (Higher Education Act, Section 472) • Not subject to regulation by the Department • Law specifies the types of costs included in the COA • If a cost is not mentioned in the prescribed categories, it is not to be included in COA • You must determine the appropriate and reasonable amounts to include for each eligible COA category at your institution

11. No Charge vs. Waivers • Tuition amounts and/or fees provided free of charge are excluded from the student’s COA • Tuition amounts and/or fees that are charged and then waived are included in the student’s COA • The amount of any waiver is considered Estimated Financial Assistance (EFA) in determining the students eligibility for Direct Loan • Room and board supplied at no charge is excluded from the COA • Room and board that is charged and then waived is included in the COA • Amount of the waiver is considered EFA

12. Statutory Components

13. Tuition and Fees • Tuition and fees are those normally assessed for a student carrying the same academic workload as determined by the institution • May include cost of rental or purchase of equipment, materials or supplies required of all students in the same program of study • Actual or average tuition charges may be used

14. Tuition and Fees • COA may include a wide range of fees • Fees are those required of all students in a given program of study • May include health insurance fee assessed all students in a program of study even if those fees are waived for those who can document they are insured • May not include health insurance for family members

15. Book and Supplies • Cost of educational materials related to the student’s program of study • Should not duplicate any costs already included under tuition and fees • Consider separate allowance for students in programs with exceptionally high book costs e.g., art or engineering

16. Allowance For Personal Computer • Reasonable amount for the documented purchase or rental of a computer suitable to student’s needs in a program • Not intended to cover whatever computer a student may want • Maybe included as a standard amount in students’ COA • May be different cost for different categories of students • May be purchased in summer for use in fall • School may require that student document need for computer • Institution has flexibility and options • May be included on a yearly basis • May be allowed only once • May be allowed once with a set amount for annual upgrade

17. Transportation • Cost of student’s daily commute to attend class • Generally public transportation if not housed on campus • Cost of travel necessary to complete course of study • Costs of operation and maintenance of a car, if needed • Is it necessary for educational purposes? • Government established mileage allowances are a good guide • Cost of travel between student’s permanent residence and the institution • School determines how many trips are reasonable • May be average or actual per student • May not include the expenses for the student’s family to travel

18. Miscellaneous/Personal Expenses • Clothing, laundry, personal hygiene etc. • Reasonable allowance for leisure/recreation • Based on living as a student • Not inclusive of needs of student’s family • Not meant to supplement tourism activities

19. Room and Board • Students without dependents living at home with parents • Institutionally determined allowance • Students living on campus • Standard amount normally assessed most residents for room and board • Students living off campus and not with parents • Reasonable allowance for student to rent living space off campus • Average cost of apartment rentals in the city/geographic area • Inclusive of estimated amount for meals • Any allowance is for living arrangements suited to a student lifestyle

20. Dependent Care Allowance • For students with dependents, an allowance for costs expected to be incurred for dependent care • Covers periods including but not limited to class time, study time, field work, internships and commuting time • Based on the number and age of dependents • Should not exceed the reasonable cost in the community for the type of care provided

21. Professional License • Allowance for the one-time direct costs of obtaining a first professional license or certificate for students enrolled in a program that requires such licensure or certification • Fees required to take a licensing exam • Costs of applying for and obtaining the license or certification • Costs incurred in travelling to a residency interview for medical students • Provided one time per student per eligible academic program • Costs must be incurred during the period of enrollment even if the exam is after the end of the period

22. Disability-Related Expense • Reasonable allowance for costs related to the student’s disability • Special services • Personal assistance • Transportation • Equipment • Supplies • Must be expenses not covered by another agency

23. Cooperative Education Program • Reasonable allowance for costs associated with such employment • May include commuting, meals, transportation or other reasonable expenses

24. Loan Fees • For students receiving loans, the fees associated with the loan, Direct Loan and non-federal loans • Exact fees or an average of fees charged to borrowers of the same type of loan at your school • To be included in COA, loan fees for private loans must be charged to the borrower during the period for which the loan is intended

25. Professional Judgment

26. Professional Judgment • Institutions have the statutory authority to use professional judgment to adjust the COA • Adjustments must be done on a case-by-case basis to allow for special circumstances of an individual student • Cannot make same adjustment for category of students • Adjustments cannot be made to circumvent the law • Adjustments must be documented in the student’s file • Professional judgment is not a vehicle for students to appeal the living standards deemed appropriate by the institution and reflected in the standard COA

27. Professional Judgment • Institutions are never required to exercise professional judgment • School’s decision cannot be questioned by auditor who does not agree • May be disallowed if not done on a case-by-case basis or not properly documented • Student has no appeal rights • Authority to make professional judgment adjustments may reside with a single person, several people, or a committee • Be fair but judicious

28. Professional Judgment Examples of special circumstances may include: • Unusually high travel expenses • Special dietary needs • Lack of housing options at costs in-line with standard allowances • Need for specialized computer equipment

29. ED Contact Information Presenter • Jamie A. Malone • 1-312-730-1528 • jamie.malone@ed.gov Foreign Schools Team • E-mail:    FSA.Foreign.Schools.Team@ed.gov • Phone: 1-202-377-3168 • Fax:1-202-275-3486

30. QUESTIONS?