Does a School Have To Include Loan Fees In the Cost Of Attendance?

Yes. Loan fees for the Direct Subsidized Loan, Direct Unsubsidized Loan, and parent and graduate PLUS are required to be itemized in the cost of attendance (COA). However, inclusion of nonfederal loan fees for student or parent borrowers is not allowed.

Citation: Section 472 of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL]

“SEC. 472. [20 U.S.C. 1087LL] COST OF ATTENDANCE.
For the purpose of this subchapter, the term “cost of attendance” means—
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(13) ”for a student who receives a loan under this or any other Federal law, or, at the option of the institution, a conventional student loan incurred by the student to cover a student's cost of attendance at the institution, an allowance for the actual cost of any loan fee, origination fee, or insurance premium charged to such student or such parent on such loan, or the average cost of any such fee or premium charged by the Secretary, lender, or guaranty agency making or insuring such loan, as the case may be;"

You are not required to recalculate the student's COA to remove the loan fees if the student declined the loan or requested a lower loan amount. However, you need to ensure the continued inclusion of the loan fees in the COA does not mask a potential overaward. See AskRegs Knowledgebase Q&A, Can a School Use Actual or Average Loan Fees in the Cost of Attendance?

See Dear Colleague Letter GEN-22-15 for more information.

Student Aid Reference Desk: For additional information, try the Student Aid Reference Desk. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes.