Skip to main content
Add as a preferred source on Google

NASFAA Supports House Bill To End Student Loan Tax

  • 03/13/15

Washington, DC — The National Association of Student Financial Aid Administrators (NASFAA) applauds the recent reintroduction of Rep. Susan Davis’ (D-CA) bill to end student loan origination fees — a needless tax on students who require assistance financing their postsecondary education.

The Eliminating the Hidden Student Loan Tax Act, introduced in September and reintroduced earlier this month, repeals the authorization to charge origination fees on all Direct Loans for undergraduate students, graduate students and parents. The bill, if passed, proposes to implement the change on July 1, 2015 — the day new interest rates are annually set for student loans.

Origination fees date back to the 1980s when, under the Federal Family Education Loan (FFEL) program, student loans were serviced and disbursed by private lenders, and the fee offset costs to originate those loans. That private-federal partnership dissolved in 2010 — and despite the federal government now originating student loans directly, the fee remains, having metastasized into a multi-billion dollar source of revenue at the expense of students. A $10,000 Parent PLUS Loan, for example, currently carries a $400 origination fee that does not actually go toward helping to administer the program. On top of that, borrowers are expected to pay back the full amount of the loan, including the origination fee, plus interest!

“Student loan origination fees are an expensive relic and an unnecessary tax on borrowers,” NASFAA President Justin Draeger says. “NASFAA gives its full and unequivocal support to Rep. Davis’ bill to give much-needed relief to students and their parents.”

About NASFAA
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis and training for financial aid administrators. For more information, visit www.nasfaa.org.

Featured

  • Phoenix School District Breaks Ground on New Prep Academy

    The Creighton Elementary School District near Phoenix, Ariz., recently broke ground on a campus replacement for Biltmore Preparatory Academy, according to a news release. The new space will allow the school to expand its enrollment by 50 percent for K–8 students and accommodate modern, collaborative learning styles.

  • Health & Science Building

    Health & Science Building

    Established in 1999, the Education Design Showcase is a vehicle for showing off innovative — yet practical — solutions in planning, design, architecture, and construction. The College of Western Idaho's Health & Science Building has been recognized with an EDS 2026 Project of Distinction award in the category of New Construction.

  • Cal Poly Humboldt Starts Construction on Healthcare Education Hub

    California State Polytechnic University, Humboldt in Arcata, Calif., recently announced that work has begun on a renovation project that will turn the Stewart Building into a new Healthcare Education Hub, according to a news release. The university is partnering with Sundt Construction Inc. for construction services.

  • Surging Demand for Student Housing Fuels Major Campus Investment Opportunities

    University leaders throughout the U.S. are accelerating plans to modernize and expand student housing as enrollment stabilizes and demand for on-campus living rebounds. Recent data from the National Center for Education Statistics indicates that total postsecondary enrollment is projected to grow through the end of the decade, with undergraduate enrollment alone expected to increase by more than 8 percent by 2030.