Photo illustration by Justin Morrison/Inside Higher Ed | Getty Images
For nearly four decades, the federal government had no authority to regulate cost of attendance, a figure calculated by colleges and universities that estimates how much a student will pay to attend the institution. COA, which includes tuition and course materials as well as living costs like housing and food, impacts how much aid a student can receive, meaning miscalculations can have major consequences for a student’s ability to go to college.
But a provision in the FAFSA Simplification Act passed in 2020 reversed that restriction, allowing the Education Department to begin regulating cost of attendance if it so chooses.
Now, advocates for college affordability and basic needs access are calling on the department to take advantage of that power. A new report from Temple University’s Hope Center for Student Basic Needs argues that the department should issue guidance—and eventually develop regulations—for how to more accurately calculate COA, pointing toward a study using 2013–14 Integrated Postsecondary Education Data System data that shows around half of institutions miscalculated living costs by at least 20 percent in either direction. Underestimations are twice as common as overestimations.
But financial aid offices don’t feel regulations are the way forward, according to Sarah Austin, regulatory specialist for the National Association of Student Financial Aid Administrators. While she agrees that COA miscalculations are a major issue, she said she “wouldn’t necessarily go as far as saying the department should regulate cost of attendance.”
That’s because there is no “one-size-fits-all” solution for coming up with accurate COA estimates, she said, and she worries that potential regulations could make estimates less accurate for some institutions, even if they are helpful for others.
“We just don’t want our members to be pigeonholed into one way of doing things when we understand how much flexibility may be needed,” she said. The organization is planning to release its own research into COA in the near future.
‘Not Just a Shot in the Dark’
The lack of any guidance or regulation directing how COA should be formulated results in inconsistent calculations from institution to institution. Bryce McKibben, the Hope Center’s senior director of policy and advocacy, argues that, at the very least, there needs to be a requirement that estimates of things like groceries and rent be based on concrete facts.
“We recommend that they start to issue some guidance to start by setting some broad outlines or principles around cost of attendance, like making sure that it’s evidence-based, not just a shot in the dark … whether it be student surveys or local data,” said McKibben, adding that that further down the line, those principles for calculating COA should become formal regulations.
Both under- and overestimations can be damaging to students, the Hope Center finds; if a university predicts attendance to be too expensive, students might think they can’t afford to go to that institution when they actually can. On the other hand, if a college undercounts the cost of attendance, its students may run out of financial aid.
“The cost of attendance estimate sets a sort of ceiling in the amount of aid they can apply for, so you can think of it as a budget,” McKibben said. “So, if your housing estimate is way short of what it’s actually costing you for just a modest amount of rent every month living with some roommates, where are you going to get the extra money?”
Tristan Stein, associate director for higher education at the Bipartisan Policy Center, said the think tank supports and has previously recommended increased guidance for COA estimates. But he acknowledged that part of what makes developing that guidance so challenging is how complex these calculations can be.
“Part of the reason why there’s lots of variation is that cost of attendance will look really different depending upon the particular student population,” he said. “One thing that the Department of Education could be especially helpful [in] is providing that guidance so that there’s more standardization in how institutions calculate cost of attendance, especially things like: How are they calculating housing costs for student parents? How are they calculating housing costs for different kinds of students in different living situations? And then how transparent are institutions being towards their students about what’s going into those calculations?”
But will the Education Department have any interest in exploring such regulations under the leadership of incoming secretary Linda McMahon? According to McKibben, it’s not unlikely. He noted that other Republicans, including Representative Virginia Foxx of North Carolina, the outgoing chair of the House education and workforce committee, have been pushing for increased cost transparency in higher education.
“This is not something that’s only relevant in one administration; I do think this is a nonpartisan issue,” he said.