There will be no change in the origination fees for Direct Loans in 2022. The fee will remain at 1.057% for both Direct Subsidized and Unsubsidized Loans.
The origination fee for Parent and Grad PLUS loans will also not change. It is at 4.228% for fiscal year 2022.
The loan fees detailed in the Federal Student Aid announcement are be used by institutions submitting records where the first disbursement will be on or after Oct. 1, 2021.
Access the FSA announcement here: FY 22 Sequester-Required Changes to the Title IV Student Aid Programs (EA ID: GENERAL-21-31)
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NASFAA has updated the Origination Fees Issue Brief to reflect current fees. The brief was originally published in 2017. The brief has the following key takeaways:
- Student loan origination fees, the hidden student loan tax, generated a staggering $1.7 billion in revenue for the federal government in award year 2019-20, and $6.7 billion over the past four award years.
- The average undergraduate borrower in a four-year program will pay an estimated $239 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 $1,334 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.
Read the updated brief here: Issue Brief: Origination Fees