Financial aid you receive through the FAFSA can pay for much more than tuition. Federal grants, loans, and work-study funds can cover a broad range of education-related costs, from housing and food to a laptop, transportation, and even childcare. The key concept is your school’s Cost of Attendance (COA), a budget that defines every expense category eligible for federal aid coverage.
How Your Cost of Attendance Works
Your school builds a COA budget for each student based on categories set by federal law. This budget isn’t a bill you pay to the school. It’s an estimate of what it costs to attend for the academic year, and it sets the ceiling on how much total financial aid you can receive. The gap between your COA and your Expected Family Contribution (or Student Aid Index) determines your financial need and the aid you’re offered.
The COA includes both direct charges the school bills you for (like tuition) and indirect costs you pay on your own (like rent and groceries). Understanding the difference matters because it affects how you actually receive the money.
Tuition, Fees, and School Charges
Tuition and mandatory fees are the most straightforward category. This covers the charges your school assesses for your coursework, including things like graduation fees and student health insurance premiums that are billed to all students. Your financial aid is applied directly to these charges first, before any money reaches you.
Housing and Food
Your COA includes a standard allowance for food and housing, and the amount varies depending on whether you live on campus, off campus, or with your parents. If you live on campus, room and board charges are paid directly from your aid just like tuition. If you live off campus, your school estimates a housing and food allowance based on typical costs in the area.
Here’s how that works in practice: after your aid covers tuition, fees, and any on-campus charges, leftover money is paid to you as a credit balance refund. You can then use that refund to pay rent, buy groceries, and cover utilities. Your school is required to send you that refund within 14 days of the credit balance appearing on your account, unless you authorize the school to hold it for future charges.
A few limitations to keep in mind. The housing and food allowance covers the nine-month academic year, not the summer. Security deposits, furniture, and other move-in costs are not part of the budget. And if your actual rent exceeds the school’s estimate, you may be able to borrow additional loan funds to cover the gap, but only if you have remaining eligibility.
Books, Supplies, and Computers
Your COA includes an allowance for books, course materials, supplies, and equipment required for your program. This also covers a reasonable allowance for buying or renting a personal computer you’ll use for coursework, even if you purchased it before the semester started (for example, a laptop bought over the summer for fall classes). Equipment needed for online instruction also qualifies.
Schools that participate in federal aid programs must give you a way to get your books and supplies by the seventh day of the term, as long as you’re eligible for a disbursement at least 10 days before the term begins and will have a credit balance. If the school offers vouchers through its bookstore, you generally have the right to opt out, receive a check instead, and buy materials on your own.
Transportation
Your COA includes costs for getting between your home, school, and workplace, plus any travel required by your program (like clinical rotations or fieldwork sites). The one clear exclusion: buying a car is not covered. Gas, public transit passes, and general commuting costs fall within the allowance.
Licensing and Professional Credentials
If your program prepares you for a career that requires a license or certification, the costs of obtaining that credential can be built into your COA. This includes exam fees, application fees, and the cost of actually getting the license or certification. The expenses must be incurred during a period of enrollment, not after you graduate. Schools can also include the cost of multiple exam attempts, though they have discretion to set a reasonable limit on how many attempts they’ll cover.
This is particularly relevant for students in nursing, teaching, accounting, and other fields where passing a licensure exam is required to work.
Childcare and Dependent Care
If you have children or other dependents, actual childcare costs can be included in your COA. This covers care needed during class time, study time, fieldwork, internships, and your commute. The allowance is based on what you’re actually expected to spend, not a flat estimate, so you may need to document your costs with your financial aid office.
Disability-Related Expenses
Students with disabilities can have additional costs included in their COA for special services, personal assistance, adaptive transportation, equipment, and supplies that are reasonably connected to attending school. These expenses qualify only if they aren’t already covered by another agency or program. If you use a screen reader, wheelchair-accessible transportation, or other assistive tools, talk to your financial aid office about adjusting your budget.
Study Abroad
If you participate in a study abroad program that your home school approves for credit, reasonable costs associated with that program can be included in your COA. This means your federal aid can travel with you, covering tuition, housing, and related expenses abroad.
Miscellaneous Personal Expenses
Schools can include an allowance for general personal expenses, but only for students enrolled at least half-time. This is a catch-all category covering things like toiletries, clothing, and other day-to-day costs. It also includes prior learning assessments, which are evaluations some schools offer to grant credit for knowledge gained outside the classroom.
How the Money Actually Reaches You
Your school first applies your grants and loans to direct institutional charges: tuition, fees, and on-campus room and board. If aid exceeds those charges, the remaining amount is sent to you as a credit balance refund, typically by check or direct deposit. You’re free to spend that refund on any of the indirect costs in your budget, including rent, food, books, transportation, and personal expenses.
There’s no receipt-checking process for how you use your refund. Federal aid is meant to cover your full cost of attending school, and the government trusts that you’ll direct it toward education-related living costs. That said, your total aid package can never exceed your COA, so every dollar is bounded by the budget your school sets.
One important distinction: Federal Work-Study works differently. Those earnings are paid to you as a paycheck for hours worked and are not applied to your school account. You receive the money directly and can use it however you need.
What FAFSA Aid Does Not Cover
Several costs fall outside the COA no matter your situation. Buying a vehicle is explicitly excluded. Summer living expenses are not part of the standard academic-year budget. Start-up costs like apartment security deposits and furniture are not included. And any expense that exceeds your school’s COA estimate can only be covered if you successfully appeal for a budget adjustment and have remaining loan eligibility. If your actual costs run higher than the school’s allowance in any category, contact your financial aid office to ask about a COA adjustment.