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

  • FAU Starts Construction on Holocaust and Jewish Studies Building

    Florida Atlantic University recently began construction on a new academic building for its campus in Boca Raton, Fla., according to university news. The Kurt and Marilyn Wallach Holocaust and Jewish Studies Building will stand two stories, measure in at 22,000 square feet, and play home to the university’s Holocaust education and Jewish studies programs.

  • Tennessee State University Gains Approval for New Engineering Facility

    Tennessee State University in Nashville, Tenn., recently announced that it has received approval from the Tennessee State Building Commission to build a new engineering building on campus, according to a university news release. The 70,000-square-foot, $50-million facility will play home to the university’s engineering programs and the Applied & Industrial Technology program.

  • textured paper collage shows a school building on fire as a fire truck sprays water into the flames

    Why a Fire Loss Is More than Flames

    We've all seen what fire damage can do to a property, but the types of damage building owners often encounter after a fire loss can exceed expectations. Having full awareness of the different forms of damage properties can sustain helps owners respond faster, reduce continued damage, and get back on the road to recovery in short order.

  • UNL Kiewit Hall

    Designing for Engineering Excellence: Integrating Sustainability and Wellness at UNLs Kiewit Hall

    Kiewit Hall at the University of Nebraska-Lincoln exemplifies how academic institutions can integrate sustainability and wellness into modern learning environments. With an integrated and collaborative team approach, Kiewit Hall addresses enhanced learning and creativity, physical health, and mental wellness, and fosters a sense of community through innovative design, operations, and policy solutions.

Digital Edition