How to Calculate the True Cost of Attendance Before You Enroll in College

College costs have consistently increased year over year at a rate faster than the inflation on the Consumer Price Index, home values and median income since before the 1990s.

This increase paired with college attendance now being the expectation for most high school graduates contributes to why the United States is sitting at $1.6 trillion in student loan debt outstanding — surpassing the amount of auto loans, credit card debt, home equity loans, and all other personal loans since before 2010.

What is the cost of attendance for college?

Cost of attendance (COA) is based on the following expenses: tuition, fees, room and board, books, travel, loan fees and more. The Higher Education Act requires schools to disclose their cost of attendance on their websites.

Laura Perna, a University of Pennsylvania professor produced a study finding that, despite this requirement, many four-year institutions are failing to meet federal standards for their disclosures, and other institutions are providing cost information that is misleading or incomplete.

The study used four low-income student profiles and sought to get cost estimates for each one from 40 public and 40 private four-year colleges. “There was no pattern in transparency based on the type of institution, although public colleges tended to rely on a federal template for price calculators,” according to Perna.

“A third of colleges did not prominently display the correct net price. Some left costs of attendance like textbooks out of the net price estimate. Two-thirds of colleges used data that was either out of date or didn’t specify the academic year.”

Financial planning for the cost of attendance is only as good as the data you’re using, and if you can’t totally rely on that, you have a significant concern to address.

How to calculate your true cost of attendance

First, let’s talk about how to find the cost of attendance. If you do a quick Google search of any college and program you’re thinking about attending, you should find the cost of attendance estimate. If you can’t seem to find it listed on the school’s website, you can contact the school’s financial aid office and request this information.

Below is an example of a financial aid office’s 2020-2021 COA listing from my alma mater, Kennesaw State University:

Tuition, fees, and room and board are typically paid directly to the school by either you or your financial aid package, which can consist of scholarships, grants and student loans. Other expenses would be your responsibility to pay for over the course of the year, and you could use the proceeds of a student loan if there’s anything left over after tuition.

Make sure to take note of a school year being listed for the COA. Older information may not be as accurate, and you might have to inflate this cost to get the amount for the current year. You also may want to take that a step further and do the inflation math for the cost of each year you will be attending so that you can project a realistic total cost.

Factor in inflation

Some schools will list their average COA inflation rate but most will not. I would use two to four times the current Consumer Price Index’s inflation rate, or you can use this calculator.

A simple calculation for finding the true cost of attendance including inflation is: the total cost today x 1.05 = Year 2’s cost with inflation. Then you use that Year 2 cost to calculate Year 3’s cost with inflation, and so on.

Graduate programs will list their COA as well, sometimes along with the estimated cost for each year it would take to complete a specific graduate program, which can include their inflation calculation. Below is an example of the COA listing for University of Georgia’s Veterinary School:

Reassess the school’s ‘allowance’ amounts

Colleges estimate an allowance, or a budget, for books, supplies, transportation, loan fees, and dependent care (if applicable). These line items are estimated differently from college to college and are based on the expenses reasonably incurred by students of that institution and program.

Do some research on your own about how much you think you’ll need for these things, though, because you might compare your estimate to theirs and find out theirs is low.

Be leery of averages

Colleges will sometimes list the average amount of their alumni’s student debt or average allowances for certain college expenses. These averages can be misleading. There’s a fantastic book called “How to Lie With Statistics” that explains how a person or organization can manipulate numbers to make almost anything lean in favor or whatever message they’re trying to convey.

Let’s consider this language from KSU’s website on how they are, as they say, recognized for low student loan debt:

“According to the LendEDU study of public and private four-year colleges nationwide, Kennesaw State students graduating in 2015 had an average loan debt of $25,123, while 63 percent of students had some form of student debt.”

There’s something wrong with this representation by KSU. It’s framing the data in a misleading way. This language says that out of all graduating students from 2015, the average student loan debt was $25,123, but then goes on to clarify that only 63% of those graduating students actually had some form of student debt.

But what's the average loan debt for the 63% of people who did borrow? Don’t throw in the other 37% of students who were fortunate enough to pay out of pocket for their education, because it drags that student loan debt average down with their $0 borrowed. This framing is damaging because then the story goes on to present:

“The “Student Loan Debt by School by State” study found that the average borrower among 1,300 colleges nationwide graduated with about $28,400 in debt in 2015.”

So KSU is comparing an apple to an orange. KSU’s data is a mix of borrower and non-borrower student loan “averages,” while comparing that to data of solely borrower averages, and trying to call it “low student debt.”

Calculate what your student loan balance will be by graduation with interest accrual

You can find up-to-date loan interest rates and loan fees for undergraduate, independent undergraduate, graduate, and PLUS federal student loans online. Federal student loan interest rates are fixed for the life of the loan. The interest accrued does not capitalize into your principal balance until you enter repayment.

Interest accrues, or grows, on your balance daily (except for subsidized loans, which don’t accrue while in deferment). This formula consists of multiplying your outstanding principal balance by your interest rate and multiplying that result by the number of days since you made your last payment.

Example: Interest Amount = (Outstanding Principal Balance × Interest Rate Factor) × Number of Days Since Last Payment

Do your research to prepare for paying for college

You can reduce your cost of attendance by applying for scholarships, looking for grant opportunities, choosing an in-state school, pursuing work-study opportunities or working part time. Listen to our podcast on preplanning for college debt and check out our Guide to Smart Student Borrowing.

You also can use our free calculator to look into what your student loan repayment plan will look like for you after your graduate, and you can schedule a consultation with us to get a customized plan.