BeautyLink - Volume 9 Issue 2 - 11

AND THEN THERE'S
COMPLIANCE

How Much
Does it

Cost?

academic and/
or career program they are interested in, there
is always the question: "How much does it cost?"
This allows the opportunity for educating the students about what costs are involved in achieving
their academic goals.
School personnel strives to help students see
that attaining their educational and career goals
is possible. Therefore, they like to have minimum
costs depicted. As a result, staff will ask: "Why
does the cost of attendance (COA) budget have to
include things other than the charges for tuition,
fees, books and supplies?"

The quick answer to the question above is that
the components of COA are dictated in the Higher
Education Act1 (HEA). The answer in more practical terms is that most students would not be able to
attend school if the only aid received was to cover
direct tuition and fee costs. A student may not even
have sufficient funds to cover basic rent and food
costs, as well as other personal miscellaneous costs
for personal hygiene, auto insurance, etc.
The law requires that the COA for a typical student be calculated to include not only tuition, fees,
books and supplies, but also an allowance for room
and board, transportation and personal miscellaneous expenses. These indirect costs are referred
to by some as the cost of living (COL) components of
the COA. Additional COA components may further
include an allowance for loan fees, child care, or a
student's disability costs, as applicable. The particulars about these allowances authorized by HEA are
highlighted in the 2016-2017 Federal Student Aid
Handbook, Volume 3; Chapter 2.

reasonable amount."2 There is no specific stipulation
as to how often a COA must be updated. However, in
keeping with the requirement to have an appropriate
and reasonable amount, a school will need to update
its COA's tuition and fees component (and, room
and board charges, etc., if applicable) when there
are increases in direct institutional charges, e.g.,
annually. For the indirect costs or COL components
of the COA, a school must determine reasonable
figures. Best practices indicate that annually, or at
least biennially, a school should update its indirect
costs (COL components). The rationale for this is
that everyday cost of living does not stay static, but
rather, almost without exception, increases each
year. Therefore, to have a reasonable COA, it must
take into account increases in the cost of living.
Depending upon the economy, locally and nationally,
you may see greater increases in COL components
in some years than others.
Ideas for researching source data to substantiate
a school's local COA may include:
* Conduct student surveys of actual costs
* Research local rental rates
* Local county Cooperative Extension Office data
* Local utility company's data
* Local public transportation office or auto club
regarding travel and transportations costs
Schools are accountable for their COA in compliance audits and federal Program Reviews. It is
imperative that the COA be reasonable and appropriate for their students, and includes all appropriate
cost components. This valid COA assists in accurate
awarding, recruiting, and student counseling, as well
as more compliant operations. Therefore, it is critical
that schools can accurately and appropriately answer
the question: "How much does it cost?"

Updating the COA

References

Once schools understand the range of components to
be included in the COA, questions arise as to how to
validate the COA. The validity of the COA is further
assured by use of current cost data when developing
it. This necessitates a regular review and update of
the COA, prompting the query: "How often do I have
to update our COA?"
Naturally, a school must have an accurate COA for
use in calculating students' need, and the subsequent
accurate awarding of aid each year. The requirement
is that the school "must determine an appropriate and

1. U.S. Code, Title 20, Chapter 28, Subchapter IV; Part E,

ONCE STUDENTS HAVE FOUND THE

Components of the COA

BY
SHERWIN
HIBBETS

Section 1087ll
2 2016-2017 Federal Student Aid Handbook, Volume 3;
Chapter 2, pages 3-34

This material is presented for informational and
educational purposes only and should not be considered to be giving legal advice. This article is
condensed from material previously presented
in a more exhaustive discussion in FAME's
Regulatory Bulletin.
BE AUT YLIN K | ENH ANCI NG EDUCAT IO N | 20 1 7 |

11



Table of Contents for the Digital Edition of BeautyLink - Volume 9 Issue 2

Message from the AACS President and CEA Chair
And Then There's Compliance: How Much Does it Cost?
Going the Extra Mile in Employment Verification
AACS 2017 New Directions
Workings of Washington: President Trump's First Budget
Creating Efficient Communication in Education
The Feedback Loop and its Influence on Assessment Design
Voices From The Classroom
How to Create a Powerful Presentation
Beauty Changes Lives
People & Places
New Products & Services
Associate Member Profiles: Education
New School Members
Upcoming 2017 Events
Index to Advertisers
Advertiser
BeautyLink - Volume 9 Issue 2 - bellyband1
BeautyLink - Volume 9 Issue 2 - bellyband2
BeautyLink - Volume 9 Issue 2 - cover1
BeautyLink - Volume 9 Issue 2 - cover2
BeautyLink - Volume 9 Issue 2 - 3
BeautyLink - Volume 9 Issue 2 - 4
BeautyLink - Volume 9 Issue 2 - 5
BeautyLink - Volume 9 Issue 2 - 6
BeautyLink - Volume 9 Issue 2 - 7
BeautyLink - Volume 9 Issue 2 - Message from the AACS President and CEA Chair
BeautyLink - Volume 9 Issue 2 - 9
BeautyLink - Volume 9 Issue 2 - 10
BeautyLink - Volume 9 Issue 2 - And Then There's Compliance: How Much Does it Cost?
BeautyLink - Volume 9 Issue 2 - Going the Extra Mile in Employment Verification
BeautyLink - Volume 9 Issue 2 - 13
BeautyLink - Volume 9 Issue 2 - AACS 2017 New Directions
BeautyLink - Volume 9 Issue 2 - 15
BeautyLink - Volume 9 Issue 2 - 16
BeautyLink - Volume 9 Issue 2 - Workings of Washington: President Trump's First Budget
BeautyLink - Volume 9 Issue 2 - 18
BeautyLink - Volume 9 Issue 2 - 19
BeautyLink - Volume 9 Issue 2 - 20
BeautyLink - Volume 9 Issue 2 - Creating Efficient Communication in Education
BeautyLink - Volume 9 Issue 2 - 22
BeautyLink - Volume 9 Issue 2 - 23
BeautyLink - Volume 9 Issue 2 - The Feedback Loop and its Influence on Assessment Design
BeautyLink - Volume 9 Issue 2 - 25
BeautyLink - Volume 9 Issue 2 - 26
BeautyLink - Volume 9 Issue 2 - 27
BeautyLink - Volume 9 Issue 2 - 28
BeautyLink - Volume 9 Issue 2 - Voices From The Classroom
BeautyLink - Volume 9 Issue 2 - How to Create a Powerful Presentation
BeautyLink - Volume 9 Issue 2 - 31
BeautyLink - Volume 9 Issue 2 - 32
BeautyLink - Volume 9 Issue 2 - Beauty Changes Lives
BeautyLink - Volume 9 Issue 2 - 34
BeautyLink - Volume 9 Issue 2 - People & Places
BeautyLink - Volume 9 Issue 2 - 36
BeautyLink - Volume 9 Issue 2 - New Products & Services
BeautyLink - Volume 9 Issue 2 - 38
BeautyLink - Volume 9 Issue 2 - Associate Member Profiles: Education
BeautyLink - Volume 9 Issue 2 - 40
BeautyLink - Volume 9 Issue 2 - New School Members
BeautyLink - Volume 9 Issue 2 - 42
BeautyLink - Volume 9 Issue 2 - Upcoming 2017 Events
BeautyLink - Volume 9 Issue 2 - 44
BeautyLink - Volume 9 Issue 2 - Index to Advertisers
BeautyLink - Volume 9 Issue 2 - Advertiser
BeautyLink - Volume 9 Issue 2 - cover3
BeautyLink - Volume 9 Issue 2 - cover4
BeautyLink - Volume 9 Issue 2 - outsert1
BeautyLink - Volume 9 Issue 2 - outsert2
BeautyLink - Volume 9 Issue 2 - outsert3
BeautyLink - Volume 9 Issue 2 - outsert4
BeautyLink - Volume 9 Issue 2 - outsert5
BeautyLink - Volume 9 Issue 2 - outsert6
BeautyLink - Volume 9 Issue 2 - outsert7
BeautyLink - Volume 9 Issue 2 - outsert8
BeautyLink - Volume 9 Issue 2 - outsert9
BeautyLink - Volume 9 Issue 2 - outsert10
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