Constructing Graduate Student Budgets
Darrell NabersGraduate and Professional Issues
Committee Chair, ILASFAA
Analyst, University of Chicago-Pritzker School of Medicine
Overview of Presentation… What is a student budget? How does federal law affect the construction
of a student budget? What institutional variables ‘drive’ student
budgets? Review of common budget items Tips to determine the most accurate COA for
students Beyond COA: what are the options?
What is a Student Budget?
Defined as-the total of the educational costs for a student
Why do students and FA officers often differ on the application of this definition?
Reality is:COA=Cost of Attendance=Anticipated or
Estimated Student Budget
What (some) Students Think…
FAO is budgeting for THEIR individualized expenses
FAO is responsible for budgeting items they claim are for the benefit of their education, or have been used for their education:
• IE, loan costs from undergraduate study, credit card bills, car payments, expenses related to care for family members, even mortgages!
Federal Regulations on Budgets
How the Feds define COA:• An institution may use title IV, HEA program
funds to credit a student’s account at the institution to satisfy current year charges for:
• Tuition and Fees• Room and board• With student’s authorization, educationally
related charges incurred by the student
Budget ‘Drivers’
How an institution defines COA is often determined by certain criteria, for example:
• Term, Quarter, or other enrollment status• Housing • Residency• Program of study
Or in many cases-‘One size fits all’
Common Budget Components
Often charges are directly billed to the student. These include:TuitionBillable FeesOn Campus Housing Books and Classroom SuppliesInsurance
All Students are required to pay these costs Waivers accepted for some of these charges on
case by case basis
Common Budget Components
The most common ‘anticipated’ expenses considered COA allowances often include:Off Campus HousingPersonal ExpensesTransportationRequired Testing Fees
What are Allowances?
Allowances increase COA Allowances increase opportunities for students to
borrow Allowances increase potential for debt Allowances should be accessible for ALL
students who are >or = H/T Allowances should be reviewed each year for
accuracy of estimation
Determining Allowances
Sources for Determining Room and Board Allowances:
• Institutional comparison of by division/school• If services are on-campus, then this can be directly
billed in lieu of allowance• Local rental listing comparisons• Online surveys (survey monkey, etc)• Higher Ed data repositories, i.e.
• http://www.lib.umich.edu/govdocs/steccpi.html• Dept. of Labor BLS
Determining Allowances Using Indicators
Cost-of-living index A cost-of-living index measures differences in the price of
goods and services, and allows for substitutions to other items as prices change
Consumer Price index A consumer price index measures a price change for a
constant market basket of goods and services from one period to the next within the same city (or in the Nation)
The CPIs are not true cost-of-living indexes and should
not be used for place-to-place comparisons
Basis of Analysis for COLIndicators
Analysis involves constructing reasonable arguments for or against an increase in cost of living (COL) allowances
Indexing involves the collection and comparison of tangible or data driven ‘proof’, or indicators, to substantiate your arguments
Some indexing variables include:• Consumer Price Index –local affect of prices on consumers• Inflation-national affect of prices on consumers• Tuition and other billable item increases (and the % of COA in
budget that makes up these expenses)-direct affect of price increases for students
Example of Living Expense Analysis Using COL Indexing
Use CPI to test cost of common items students use that are not directly billed, i.e.
• Coffee• Utilities, like natural gas and electricity• Produce
Determine % of increase/decrease in cost of these items over a defined period
• Average increase/decrease of coffee in 2007 (BLS Database Link)
Example of Living Expense Analysis Using CPI
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2007 3.288 3.456 3.475 3.437 3.308 3.407 3.529 3.497 3.607 3.685 +.397
Series Id: APU0000717311Area: U.S. city averageItem: Coffee, 100%, ground roast, all sizes, per lb. (453.6 gm
Example of Living Expense Analysis Using CPI
CPI-U, US City Average, All Items: (NSA) +0.3% in Feb 2008 (SA) unchanged in Feb 2008 (NSA) +4.0% since Feb 2007
CPI-U, US City Average, All Items Less Food and Energy: (NSA) +0.3% in Feb 2008 (SA) unchanged in Feb 2008 (NSA) +2.3% since Feb 2007
CPI-U, US City Average, Medical Care: (NSA) +0.5% in Feb 2008 (SA) +0.1% in Feb 2008 (NSA) +4.5% since Feb 2007
-------» SA- Seasonally Adjusted» NSA- Not Seasonally Adjusted» Click on the icon for 10 years of historical data
Other Methods of Determining Shifts in COL
Inflation has been defined as a process of continuously rising prices, or equivalently, of a continuously falling value of money
Using Tuition and other billable costs as a measure of inflation is often the fastest way to determine if an increase to COL allowances are necessary
Use an Inflation Calculator at: http://data.bls.gov/cgi-bin/cpicalc.pl
Beyond Basic COA
Certain items can be considered ‘add-on’ allowances:
• Dependent care expenses• Study abroad or selected programs of study• Disability related expenses• Loan fees• Computer purchase or rental• Car repairs• Medical expenses
Beyond Basic COA
What is NOT COA (and should not be considered for a budget increase):
• The purchase of a car• Miscellaneous personal expenses and room
and board for LESS than Half-Time students• Improvements on place of residence• Travel expenses related to job or residency
interviews
Beyond Basic COA
Changes to a Student Budget• Adjustments should be guided by enrollment or
program of study changes• Students who have unusual or extraordinary
living expenses above what was initially calculated as COA are eligible to file for an increase in their budget
• Budget appeals should be treated as special situations in all cases
Beyond Basic COA
Budget Appeal Process• Have a formalized process/procedure for
student’s to document and explain reasons for budget increase requests
• Receipts• Payments made or pending• Estimates
• Have a form in your FAO that can be used to standardize the information necessary for a budget increase request
Resources
U.S. Dept. of Labor; Bureau of Labor Statistics http://www.bls.gov
FSA Coach http://www.ed.gov/offices/OSFAP/fsacoach/lesson5_1/5_1_11.html
University of Michigan Document Center http://www.lib.umich.edu/govdocs/steccpi.html
NASFAA Encyclopedia http://www.nasfaa.org/Apps/Eplus/
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