This guidance is specific to the 2023-24 award year and later.
It depends. According to the U.S. Department of Education (ED), in areas where public transportation is not available for students to travel to and from school, the costs of operating and maintaining a car (e.g., gas, oil, license, insurance, repair) may be included in the transportation allowance of the cost of attendance (COA). Actual or average costs may be used.
It would be appropriate to only include such car maintenance and operation costs (including car insurance) in the standard transportation allowance for all off-campus students where public transportation is not available. However, we do not believe you should add such costs to the standard transportation allowance in areas where public transportation is available. For these students, you could add these costs to the transportation allowance on a documented case-by-case basis using professional judgment (PJ).
The COA may never include the cost of purchasing or leasing an automobile (i.e., car or lease payments).
In Dear Colleague Letter GEN-22-15, ED provides additional guidance with regard to the transportation expense component of the COA in COA-Q3:
"Is the transportation cost allowance limited to transportation between campus, residences, and place of work?
No. The language in the [FAFSA Simplification] Act indicates that institutions “may” include costs associated with transportation between campus, residences, and places of work, but this should not be considered an exhaustive list. Nothing in the Act restricts or modifies previous Department guidance on including transportation costs associated with trips, conferences, or medical residency interviews, if the components are a required part of a student’s program of study. Institutions should develop reasonable costs for transportation based upon measured outcomes that can be demonstrated to the Department upon request. A school can also adjust COA components based upon individual circumstances under their professional judgment policy."
Note: Effective with the 2023-24 award year, the COA components for “living expenses,” for “books, course materials, supplies, and equipment,” for “transportation,” and for “miscellaneous” are now separate cost components.
See Section 472 of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL].
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. Search Cost of Attendance.
AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.
Join NASFAA and receive full member access to the AskRegs Knowledgebase and question services.Learn More