Understanding Direct Cost Vs. Cost of Attendance: Applying for Financial Aid

Direct Cost are the actual charges that a student has to pay to get a college education. Direct Cost are a portion of the Cost of Attendance depending on where one lives and can vary depending on how one lives while going to a school, college or university.

Cost of Attendance includes:

Tuition & Fees                                                                                                           $   3000.00

Books & Supplies                                                                                                     $      500.00

Room & Board (dorms, home with parents, apartment)                        $   5000.00

Transportation (to and from school)                                                             $    1000.00

Personal (toiletries, shaving cream, toothbrush, etc.)                           $      500.00

Total Cost of Attendance                                                                                    $10,000.00

An example to consider is if you were intending to continue living at home, Direct Cost to get an education would be Tuition & Fees and Book & Supplies only. Because of the lower direct cost, this means you would not have to borrow or finance the other items in the Cost of Attendance because your parents or you have already been taking care of this since you are living at home.

This could be a tremendous savings.

In essence, the Tuition & Fees and Books & Supplies would be direct cost of $3500.00 for the Academic Year  for one year by living at home. The total direct cost for 4 years would be approximately $3500.00 x 4 years of $14,000.00 versus $40,000.00 Cost of Attendance.

The key is to understand the difference. Schools, Colleges and Universities are obligated to provide you a total Cost of Attendance by federal regulation. So, you will see financial aid awards that will be very high. In this example, approximately $10,000.00 an academic year.

I will be covering this subject more extensively and providing options to consider to be able to get an education with the least amount of debt in upcoming blogs. Remember to contact each institution you intend to make an application and get their Cost of Attendance and completing your FAFSA so that we can continue on this journey of evaluating your financial options.

Do not hesitate to ask questions or submit comments to see anything you may want more clarification or answers.

Till next time.

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