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Department of Education readies system for new origination fees
June 06, 2019
Students and parents will see slightly lower loan origination fees on loans disbursed this fall, and now the Department of Education has made it possible for schools to process loans with those new fees.
In a June 5 Electronic Announcement, the Department of Education provided operational guidance for the loan origination fee change.
The rates will not lower origination fees much, but both students and parents will both save a few pennies or more. The savings depends on the size and type of the loan.
For both subsidized and unsubsidized Direct Loans for students, the origination fee for loans disbursed after October 1, 2019 and before October 1, 2020, will be 1.059 percent and for Direct PLUS Loans, the origination fee percentage for the same period will be 4.236.
The June 5 Announcement provides instructions if corrections or adjustments are needed and includes a reminder that the rounding and truncating rules have not changed.
If you have questions, contact the COD School Relations Center at 1-800-848-0978 or CODSupport@ed.gov.