Can the Cost Of a Test Preparation Course, Such As the LSAT Or MCAT, Be Included In the Cost Of Attendance?

Scenario: There is some disagreement on our campus about whether a budget adjustment may be made to include the cost of taking a test preparation course for admission into a law school (Law School Admission Test--LSAT), medical school (Medical College Admission Test--MCAT), or graduate school (Graduate Record Examination--GRE).

Answer: If the test preparation course meets a degree completion requirement (even an elective requirement) the course may be included in the calculation of a student's enrollment status and cost of attendance (COA or budget) for Title IV purposes. However, if the course does not meet a degree completion requirement, it cannot be included in the student's enrollment status or COA for Title IV purposes, and it cannot be paid with Title IV aid.

Section 472 of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL(a)], identifies costs that are allowed in the COA. With one exception, allowable costs are only those directly associated with the period of enrollment for which Title IV funds are being awarded (academic year or award year). Unlike the costs of a required (or elective) course which counts toward degree completion requirements, the costs associated with optional test preparation courses or admissions preparation tests (MCAT, LSAT, etc.) are not associated with the student's current period of enrollment, so they are not allowed in the student's COA.

The single statutory exception is the allowance for obtaining a license, certification, or first professional credential (not admission to another program). Effective with the 2023-24 award year, changes to Section 472(a)(14) of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL(a)(14)] state that the cost of obtaining a license, certification, or a first professional credential is a required component in the cost of attendance (COA); it is no longer optional based on school policy.

A school must include an allowance for the of obtaining a license, certificate, or credential for students enrolled in a program requiring professional licensure, certification, or a first professional credential to enter the profession. These expenses may include the fee charged to take the licensing exam, the costs of applying for or obtaining the license, and at the school's discretion, the costs incurred in traveling to a residency interview for a medical student. Note that the costs must be incurred during, not after, a period of enrollment, even if the exam does not occur until after the end of the period of enrollment.

NOTE: HEA Section 472(a)(14), [20 USC 1087LL] does not include the previous provision that the inclusion of the cost of obtaining a license, credential or first professional credential is limited to the "one-time" cost. NASFAA will update this article when the U.S. Department of Education (ED) provides clarification. 

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. See Cost of Attendance.