Tuesday, March 20, 2012 3:44 PM
Translating the Award Letter - the COA
It has been said that financial aid folks have their own language speaking of FAFSAs , EFCs, COAs, SARs and other strange terminology. Sometimes we take it for granted that students will just understand this “jibberish”. But seeing that our first batch of aid award letters for the class of 2015 just went out last week I wanted to insure that nothing was lost in translation. To that effort,in clarifying elements of the aid award letter, this blog focuses on the COA otherwise known as the Cost of Attendance.
The Cost of Attendance is just another word for your budget for the year. It appears first in the aid award letter because it literally drives all other calculations in the all important need based aid formula : Cost of Attendance minus Contribution= Financial Need.
Federal regulations stipulate that a Cost of Attendance must be all inclusive not just reflecting your direct expenses billed from the school (like tuition, student fees and health insurance ) but the estimated total cost of actually attending the university. Institutions traditionally estimate those other costs which usually include books, travel and a living allowance (room and board).
So how do we know our estimates are accurate to survive and thrive at YLS ? Because each year we actually survey our current students with a Cost of Living survey asking for what they pay for rent, food, utilities, cable, internet etc. We conducted that survey this past Fall and the average cost of living inclusive of all those expenses was $14,562- so the estimate we had been using of $17,000 more than covered the average costs of living in the Elm City (yes,that’s New Haven’s nickname) .
The one area in that survey which students indicated additional funding was needed were travel costs. So we changed our Cost of Attendance budgeting process for this year, and now add a travel allotment into every student’s cost of attendance based on average costs of travel from their specific state of residence to New Haven.
Why is looking at the Cost of Attendance so important in analyzing your aid award? Because the greater the Cost of Attendance, the more aid you should receive in the need based financial aid approach. But you also need to look at where is that extra expense in the Cost of Attendance that is driving your increased award. If that extra aid is just awarded to make up for a higher cost of living based on the geographic location of the institution - what are you really gaining? Yes, you will have more aid but you are going to have to spend more to live there. As suc, it’s not as simple as comparing, XYZ school gave me a $25,000 scholarship and ABC school gave me a $21,000 scholarship. If XYZ’s Cost of Attendance shows that it costs $4,000 more per year for living and/or room and board in XYZ city– the offers are then virtually equivalent and the difference in the scholarship amount should be taken off the table as a comparative.
There is also nothing to say that you have to spend up to the estimated living allowance. If you can find a cheaper rent, split costs with a roommate or develop a steady diet of ramen noodles, you can maximize your financial aid because your award will still be based on the standard cost of living estimate, thereby allowing you to save funds or, more importantly, minimize your loan borrowing. Follow the old saying: “ live like a student today to live like a lawyer tomorrow”. Sound advice!