If Our School Uses a Third-Party Contractor To Provide Food Services, Can Those Costs Be Included In a Student's Cost of Attendance?

Award Year: 2023-24 KA-36468 Helpfulness Rating 135 page views

This guidance is specific to the 2023-24 award year and later.

Yes. Section 472 of the Higher Education Act of 1965 (HEA), as amended, [20 USC 1087LL], requires schools include an allowance "for a student electing institutionally owned or operated food services, such as board or meal plans, a standard allowance for such services that provides the equivalent of three meals each day."  Many schools contract with third-party food contractors for these services. The U.S. Department of Education (ED) provided clarification in Dear Colleague Letter GEN-22-15, COA-Q6:

"Does 'institutionally owned or operated food services' include institutionally contracted food services via a third party?

Yes. Contracted food and housing are considered institutional charges and typically make up a significant portion of institutional costs. Many institutions use food contractors and know the exact costs associated with these services. Appropriately including these costs in a student’s COA helps the student to obtain the maximum amount of financial aid permissible."

Note: Effective with the 2023-24 award year, the COA component for “room and board” has been renamed “food and housing.” See Section 472 of the HEA, as amended [20 USC 1087LL].

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.