11.04.09 | What Fees are Attached to My Stafford Loan?
Did you know the Stafford loan has fees attached to it? There are two different fees attached to Stafford loans, an origination fee and a default fee. Now here is the good news – those fees are coming down.
The Stafford loan program instituted a three year program back in 2008 to dissolve the origination fee’s completely and bring down the default rate. In 2008 the origination fee was 1%, in 2009 it went down to 0.5%, and beginning 7/1/10 it will be 0%. That’s sweet for students! Now what about the default fee?
The default fee is also coming down from 2% and will land at 1% beginning 7/1/10. By the way, the default fee is not an absolute charge. Lenders / guarantors are permitted to waive the default fee as part of their incentive package. This is important to know if you are attending a FFELP school. FFELP schools allow you to choose your lender.
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