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How Will Sequestration Impact Student Loans?

While the sequester does not currently impact the amount loaned to student borrowers, it does effect the origination fee of Direct Unsubsidized Stafford and Direct Graduate Plus loans.  The origination fee is a percentage of funds deducted from the loan before disbursement.  Borrowers can now expect to see 1.051% origination fees on Direct Unsubsidized Stafford loans and 4.204% origination fees on Direct Graduate Plus loans.  Previously these fees were 1% and 4%.

Loans borrowed for the Summer 2013 semester and going forward will carry the increased fees.  The Department of Education plans to notify via email those borrowers who are affected by this change, but please feel free to contact us if you have any questions or concerns.