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Cost of Attendance Adjustments

Adjustments for special circumstances can be made to either the cost of attendance or one or more data elements. An adjustment to the cost of attendance leads to a dollar for dollar increase in financial need (100%). This has a bigger impact than an adjustment to income (maximum of 47% for parent income and 50% for student income) or assets (maximum of 5.64% for parent assets and 20% for student assets).

The decision whether to adjust the cost of attendance or a data element depends on whether the special circumstance relates to educational costs or the family's ability to pay. As a result, most financial aid administrators limit adjustments to the cost of attendance to expenses that relate to the student and are educational in nature or normally included in the student budget. Such adjustments are usually made in response to a student request to increase one or more specific budget items.

As a practical matter, when a student already has zero EFC, many schools will adjust the cost of attendance because it is the only way to provide the student with additional assistance.

The expenses normally included in the student budget are specified by Section 472 of the Higher Education Act and include the following:

  • Sec. 472(2): transportation costs, student health insurance and student medical fees
  • Sec. 472(3): increased board costs due to special diet dictated by medical or religious reasons
  • Sec. 472(8): dependent care
  • Sec. 472(9): disability-related expenses
  • Sec. 472(11): cooperative education employment expenses
  • Sec. 472(12): amount of education loan fees

The student budget may also include an allowance for the purchase of a computer as part of the budget for books and supplies.

Some schools deliberately keep the student budget artificially low, since prospective students often use cost of attendance to compare competing schools. The school might also use a lower standard student budget to discourage overborrowing by students. Students who have basic expenses beyond those specified by the budget are forced to ask for an increase.

Some financial aid administrators feel that adjustments to cost of attendance should be based on just the incremental increase in costs attributable to attending an institution of higher education. To the extent that an expense is already included in the income protection allowance, only the incremental increase should be added to cost of attendance. Since disability expenses are not included in the income protection allowance, the full amount of reasonable disability-related expenses should be added to cost of attendance.

With the exception of dependent care, expenses that relate to the student's family are applied as adjustments to data elements and not cost of attendance.

Some financial aid administrators will consider whether the student is subject to automatic zero EFC before deciding whether to adjust data elements or cost of attendance. A student with zero EFC usually does not benefit from data element adjustments, but can benefit from an increase to cost of attendance.

Often an adjustment to cost of attendance will make the student eligible for increased Perkins and subsidized Stafford, while an adjustment to AGI will not. Increasing cost of attendance might also make the student eligible for an increased Pell Grant if the school's tuition rate is low.

Many financial aid administrators feel that it is important to choose the adjustment method that maximizes the benefit to the student.

Note that although loan fees may be included in a student budget, loan payments may not, not even through PJ. Federal student aid funds may not be used to repay education debt.

See also Student Budgets and Loan Fees in Student Budgets.

 

 
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