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Biden-Harris Administration Propose End to Higher Ed ‘Junk Fees’

The Biden-Harris administration is proposing new steps to crack down on “hidden junk fees” to lower costs saddled on college students and families and make higher education more affordable.

The proposed fixes, announced March 15, target fees imposed during the college or graduate school experience — some are imposed multiple times.

Jaylon HerbinJaylon HerbinThe “loan origination” fee for a federal student loan, for example, can range from 1% for undergraduate loans to 4% for graduate and parent loans — potentially adding hundreds or thousands of dollars to students’ debt. Roughly 7 million undergraduate, graduate, and parent borrowers pay origination fees, according to the Office of Management and Budget.

The message was well-received by leadership at the Center for Responsible Lending (CRL).

“We applaud the administration’s commitment to eliminating unnecessary junk fees in higher education and contributing to a fairer, more equitable student loan repayment system,” said CRL Federal Campaigns Director Jaylon Herbin. “These efforts represent a crucial step toward enhancing access to education for all borrowers, including low-income borrowers in underserved communities.”

The administration plans to gain ground on lessening the effects of student loan origination fees through the president’s Fiscal Year 2025 Budget Proposal, which calls on Congress to end student loan origination fees.

The White House also seeks to end “college banking junk fees” through the U.S. Department of Education’s negotiated rulemaking to clarify that college banking products providing students access to their financial aid cannot include harmful fees as well as “automatic billing” on tuition for textbooks.

Additionally, the department is formally considering regulations to require institutions of higher education to return any unused funds from federal financial aid recipients’ meal plans back to students.

“The administration must implement these proposals as they continue their fight to defend other substantial reforms to the Saving on a Valuable Education (SAVE) and Public Service Loan Forgiveness (PSLF) plans from potentially being struck down in courts,” said Herbin. “Furthermore, these efforts align with the White House's broader agenda to reform student loan payments following the Supreme Court's rejection of President Joe Biden's student debt cancellation plan last year.”

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