Sequestration Changes to Federal Direct Loans
There has been a change to the origination fees for Federal Direct Loans for the 2013-2014 academic year. What is an origination fee? The origination fee is a fee paid by a borrower to help defray the cost of making a loan. These funds are not paid to Pitzer College but are retained by your lender, the Department of Education.
As of October 1, 2013, the sequester increases the origination fees charged to Direct Loan borrowers. However, taking into account all of the underlying circumstances, including operational requirements, the new loan fee percentages will apply only with regard to loans where the first disbursement is made on or after December 1, 2013. The new loan fees are 1.07% for Direct Subsidized Loans and Direct Unsubsidized Loans and 4.29% for Direct PLUS Loans.
The increased loan fee percentages must be applied to any loan disbursement for a loan where the first disbursement will be made on or after December 1, 2013. This includes loans that will be made for the remainder of the 2013-2014 academic year and loans that will be made for summer 2014.
If you accepted your loans for the full academic year and you have already received a loan disbursement, you will continue to have the 1.05% and 4.20% origination fee. The new loan origination fees apply to any loan where the first disbursement is made on or after December 1, 2013.