NO CHANGE TO ORIGINATION FEES THIS YEAR DESPITE SEQUESTER

This year Financial Aid Directors around the country are quietly rejoicing because Fiscal Year 2022 is the first year in over a decade that they will not have to worry about updating their Direct Loan Origination fees in the middle of their processing year. The origination fees have been changing every October 1st because of the Budget Control Act of 2011, known as the sequester law and frankly it is a real pain in the “you-know-what”.  But not this year! So, rejoice friends, your fall disbursements will go smoothly.

For Federal Fiscal Year 22 (October 1, 2021 – September 30, 2022) the sequester required changes are the same as they were for FFY 21, so there is no change.

Beginning on October 1, 2021, origination fees on Direct Loans including Direct PLUS Loans, as well as the Iraq-Afghanistan Service Grants (IASG) and TEACH Grant awards are as follows:

  • The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.057%. For example, the fee on a $5,500 loan will be $58.13.
  • The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.228%. For example, the fee on a $10,000 PLUS Loan will be $422.80.
  • An Iraq-Afghanistan Service Grant where the first disbursement is on or after October 1, 2021, and before October 1, 2022, requires a reduction of 5.7 percent from the award amount for which the student would otherwise have been eligible.
  • A TEACH Grant where the first disbursement is on or after October 1, 2021, and before October 1, 2022, requires a reduction of 5.7 percent from the award amount for which the student would otherwise have been eligible.

For more information about the sequester see this electronic announcement from FSA.