This letter provides information that supplements the FAFSA Simplification Act information provided in the Federal Register notice published on Nov. 4, 2022, regarding new policies that become effective for the 2023-24 Award Year. We will continue to address other aspects of the FAFSA Simplification Act implementation in the future.
On Nov. 4, 2022, we published a Federal Register notice [87 FR 66683] announcing changes as authorized by the FAFSA Simplification Act (Act), which was enacted into law as part of the Consolidated Appropriations Act, 2021 and amended by the Consolidated Appropriations Act, 2022. The Act makes many important amendments to the Higher Education Act of 1965, as amended (HEA) and the Free Application for Federal Student Aid (FAFSA ® ), which are required to be implemented by July 1, 2024.
As described in the June 11, 2021 Electronic Announcement, the Department of Education (Department) is implementing these changes via a phased approach that began with the 2021-22 Award Year, with full implementation planned for the 2024-25 Award Year.
This Dear Colleague Letter describes requirements that the Department is implementing for cost of attendance (COA), professional judgment, and independent student statuses for the 2023-24 Award Year. Where possible, the Department has made changes to the 2023-24 FAFSA form in anticipation of full implementation in 2024-25. The Department also notes that, while the Student Aid Index (SAI) will replace the Expected Family Contribution (EFC) on the 2024-25 FAFSA form, we will continue to reference the EFC in this publication and elsewhere until we implement the SAI.
The Department is also implementing new Federal Pell Grant (Pell Grant) eligibility for students incarcerated in Federal and State penal facilities and restoring Pell Grant eligibility to students who had Federal student loans discharged under specific criteria, including closed school, false certification, and borrower defense to repayment loan discharge, in the 2023-24 Award Year. Although we address these items briefly in this publication, we are developing additional guidance on these topics.
To further assist institutions in implementing some of these new policies for 2023-24, we are providing a Questions and Answers section at the end of this Dear Colleague Letter.
The FAFSA Simplification Act (116 Pub. L. 260, Division FF, Title VII) and the Consolidated Appropriations Act, 2022 (117 Pub. L. 103, Division R) jointly modify the COA components and consumer information pertaining to those components. The revisions provide more clarity and detail to individual COA components, and institutions must implement them for the 2023-24 Award Year.
What has changed?
Language regarding costs for rental or purchase of equipment, materials, or supplies has moved out of the definition of “tuition and fees” and into a broader definition of “books, course materials, supplies, and equipment.”
Transportation expenses may include transportation between campus, residences, and a student’s place of work.
“Room and board” are now known as “food and housing,” although the meaning of the terms remains the same. Food and housing are grouped as “living expenses.”
Living expense categories now break out costs associated with specific housing and food situations and require standard allowances within certain categories, such as on or off campus and with or without a meal plan.
Institutions may no longer include loan fees for non-Federal student loans borrowed by students.The costs of obtaining a license, certification, or first professional credential are no longer restricted to a one-time allowance.
“Course materials” and “the cost of obtaining a license, certification, or a first professional credential” were added to the types of expenses that an institution may include in a confined or incarcerated individual’s COA.
The types of expenses that an institution may include in the COA for a student who is enrolled less than half time has been broadened to include components not otherwise prohibited by the law. For example, an allowance for students in work related to a cooperative education program is permissible because that COA element [HEA Sec. 472(a)(12)] does not exclude less-than-half-time students, while miscellaneous personal expenses [HEA Sec. 472(a)(4)] are not includable, as noted below.
What remains the same?
A student must be enrolled at least half time for miscellaneous personal expenses to count in the student’s COA.
There were no changes to the definitions of the following components: study abroad expenses, cooperative education expenses, dependent care expenses, and disability-related expenses.
There were no substantive changes to the COA components for students engaged in correspondence study or distance education under section 472(a)(6) and section 472(a)(11) of the HEA, respectively.
Below we provide the updated definitions of commonly used COA terms based on the statutory changes in section 472 of the HEA, incorporating the changes described above for the 2023-24 award year:
Tuition and fees—An amount normally assessed a student carrying the same academic workload, as determined by the institution.
Books, course materials, supplies, and equipment—An allowance for books, course materials, and equipment, which must include all such costs required of all students in the same course of study, including a reasonable allowance for the rental or upfront purchase of a personal computer, as determined by the institution.
Transportation—An allowance, as determined by the institution, which may include transportation between campus, residences, and place of work.
Miscellaneous personal expenses—An allowance, as determined by the institution, for a student attending the institution on at least a half-time basis.
Living expenses—An allowance for food and housing costs, as determined by the institution, to be incurred by the student attending the institution on at least a half-time basis, including—
A standard food allowance that provides the equivalent of three meals each day, regardless of whether a student chooses institutionally owned or operated food services (i.e., board or meal plans). Institutions must provide an allowance for purchasing food off campus for a student that does not elect institutionally owned or operated food services.
Housing allowances for students residing in institutionally owned or operated housing with or without dependents must be based on the average or median amount assessed to such residents for housing charges, whichever is greater.
Housing allowances for students living off campus must include rent or other housing costs.For dependent students living at home with parents, institutions must include a reasonable standard allowance for living expenses that is not zero.
For students living in housing on a military base or for which they receive a basic allowance under section 403(b) of title 37, United States Code, institutions must include a reasonable allowance for food on-campus or off-campus but cannot include housing costs.
For all other students, institutions must include a reasonable allowance based on expenses incurred by such students.
Review each living expense category above to ensure that you properly capture all required categories in your COA policy.
Study abroad expenses—An allowance for reasonable costs, as determined by the institution, for a student in a study abroad program approved for credit by the home institution.
Cooperative education costs—An allowance for reasonable costs, as determined by the institution, associated with such employment for a student engaged in a work experience under a cooperative education program.
Dependent care—An allowance based on the estimated actual expenses incurred for dependent care, based on the number and age of such dependents.
Such allowance must not exceed the reasonable cost in the community in which such student resides for the kind of care provided; and
The period for which dependent care is required includes, but is not limited to, class-time, study-time, field work, internships, and commuting time.
Disability-related expenses—An allowance, as determined by the institution, for expenses associated with a student’s disability, including special services, personal assistance, transportation, equipment, and supplies that are reasonably incurred and not provided for by other agencies.
Federal student loan fees—An allowance for the cost of any Federal student loan fee, origination fee, or insurance premium charged to the student or the parent of the student. The allowance—