What are Loan Fees?

The Department of Education will charge a 1.0% loan origination fee deducted from each loan disbursement for the process of the loan. Direct Loan borrowers receive an interest rate rebate of 0.5%, reducing the up front fee to 0.5%. Upon entering repayment, borrowers must make their first 12 loan payments on time to keep this benefit. This entire fee goes to the government to help reduce the cost of the loans.