To calculate financial aid eligibility, every student who files the FAFSA must have a cost of attendance, or budget, figured based on the school's costs and your situation. This basically means your budget is an estimate of your educational expenses for an academic year. Other than the Expected Family Contribution, this is the key component for financial aid personnel in calculating your financial aid.
Fortunately for financial aid people, federal regulations allow us to use an estimate of average college expenses. For example, if your school charges an hourly tuition and/or fee rate per credit, the school can determine the average student takes 15 credits per term, let's say, and use a standard tuition and fee rate of 30 credits in every student's academic year budget. Your school can't just make up or assume these standards. Documentation as to how these figures were determined must be available to auditors.
The following are the most common allowable budget costs:
- Tuition and fees (charged to all students)
- Books and supplied determined by the school
- Room and board
- Dependent living at home--school determines expense
- Independent and/or dependent living on campus--standard amount normally assessed to all students
- Independent and/or dependent living off campus--reasonable expenses determined by school
- Miscellaneous expenses including transportation, personal, etc., determined by the school.
The following are also allowable costs, but are not used often:
- Study Abroad expenses
- Disability expenses
- Employment expenses for co-op study
- Extra fees such as lab fees, access fees, etc.
Here is an example of a student's budget:
Sally is enrolled at XYZ University for 13 hours per semester, or 26 hours for the 9 month academic year. She is an independent, married student who lives off campus. She does not have any extra fees associated with her courses.
- XYZ University has researched enrollment trends within the university and has found that the majority of students take 16 hours per semester. The hourly rate per semester hour is $250 for tuition and fees combined, so XYZ decides to use a standard tuition and fee rate of $4,000 per semester ($8,000 for the academic year) based on 16 hours per semester even though Sally is enrolled for only 13 hours.
- Research was also completed to document the average cost of rent by surveying rental companies and landlords in the immediate area, which was found to be $400 per month, or $4,500 for the 9 month academic year.
- The school is using the standard board (food, etc.) rate as an on-campus student, which is $1,500 per semester, or $3,000 for the academic year.
- XYZ University's bookstore has provided the average cost of $40 per credit hour for books, so 16 hours per semester book cost is $640, or $1,280 for the academic year.
- The school established a rate for miscellaneous expenses by documenting travel and commuting costs, personal expenses, and other miscellaneous expenses via student survey and government allowances. The miscellaneous costs total $2,000 per semester, or $4,000 for the academic year.
Sally's budget for each semester is as follows:
- Tuition and fees $ 4,000
- Room $ 2,250
- Board $ 1,500
- Books & Supplies $ 640
- Miscellaneous $ 2,000
Total budget for one semester: $10,390
Total budget for academic year: $20,780
Now, I know I am writing for online learning students, so I have to throw in a caveat. There are exceptions to the allowable costs, with one being for students taking Correspondence Courses. It is completely up to your school on how online and Internet classes are classified, and whether a regular budget is used, or a reduced Correspondence budget is substituted. Unfortunately, there's no way for me to know which schools do which.
Today's message is for those who attend universities where online and Internet courses are treated as regular coursework. My next post with cover the exceptions to allowable costs, including Correspondence Courses.