Origination Fees. NASFAA Issue Brief [Updated]
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| Title: | Origination Fees. NASFAA Issue Brief [Updated] |
|---|---|
| Language: | English |
| Authors: | National Association of Student Financial Aid Administrators (NASFAA) |
| Source: | National Association of Student Financial Aid Administrators. 2025. |
| Availability: | National Association of Student Financial Aid Administrators. 1101 Connecticut Avenue NW Suite 1100, Washington, DC 20036. Tel: 202-785-0453; Fax: 202-785-1487; e-mail: membership@NASFAA.org; Web site: http://www.nasfaa.org |
| Peer Reviewed: | N |
| Page Count: | 2 |
| Publication Date: | 2025 |
| Document Type: | Reports - Descriptive |
| Education Level: | Higher Education Postsecondary Education |
| Descriptors: | Student Financial Aid, Student Loan Programs, Fees, Federal Aid, Government Role, Income, Federal Legislation, Educational Legislation, Higher Education |
| Laws, Policies and Program Identifiers: | Higher Education Act 1965, Federal Direct PLUS Loan Program, Federal Direct Student Loan Program |
| Abstract: | The Higher Education Act of 1965, as amended, specifies a loan origination fee of 1 percent for all Direct Subsidized Loans and Direct Unsubsidized Loans, and a fee of 4 percent for all Direct PLUS Loans for both parent borrowers and graduate and professional student borrowers. Student loan origination fees, the hidden student loan tax, generated a staggering $1.7 billion in revenue for the federal government in award year 2023-24, and $6.5 billion over the past four award years. The average undergraduate borrower in a four-year program will pay an estimated $227 in origination fees and associated interest if enrolled in a standard 10-year repayment plan, while the average graduate student in a two-year program pays about $1,370 in fees and interest on that fee if repaying over 10 years. Origination fees, a relic of bank-based student lending, increase complexity in the federal student loan system and should be eliminated. |
| Abstractor: | ERIC |
| Entry Date: | 2025 |
| Accession Number: | ED672059 |
| Database: | ERIC |
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