Common Questions on Loan Fees

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A loan fee is a processing fee charged by the federal government to defray the costs of managing and lending loans to borrowers. The loan fee amount is a percentage of the term amount and is deducted from each loan disbursement. The percentage is based upon the date of the first disbursement for each loan (e.g. for a fall/spring loan, the first disbursement date will be the date when the fall disbursement is applied to the student's account).

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

If you decide to obtain loans through the William D. Ford Federal Direct Loan Program as part of your college payment plan, then you will be charged a loan fee each time loan funds are disbursed to your student account. Like any loan, the loan fee is charged by the federal government to defray the cost of managing and lending loans to borrowers.

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

Mid-year changes to Loan Fees for the Direct Loan Program

ALERT: Due to the ongoing implementation of Congress' Budget Control Act (BCA) of 2011, which put into place the "sequester" (automatic across-the-board federal budget cuts), the loan fees charged are determined by both the loan type and the first disbursement date.

First loan disbursement is made on or after December 1, 2013 and before Oct. 1, 2014

  1. Subsidized / Unsubsidized Student Loans: 1.072%
    • for undergraduate or graduate/professional students
  2. PLUS Loans: 4.288%
    • for either Parent PLUS or Grad PLUS loans

First loan disbursement is made on or after Oct. 1, 2014 and before Oct. 1, 2015

  1. Subsidized / Unsubsidized Student Loans: 1.073%
    • for undergraduate or graduate/professional students
  2. PLUS Loans: 4.292%
    • for either Parent PLUS or Grad PLUS loans

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

The federal government automatically deducts these fees from the loan amount at the point of each loan disbursement.

Please take these examples into account when determining how much you would like to borrow to cover expenses for the school year.

The following examples for each loan type use the Loan Fee Percentages for first disbursement dates 'On or after Dec. 1, 2013 and before Oct. 1, 2014:

  1. Subsidized or Unsubsidized Student Loan Example: Annual loan for $3,500 split over two terms ($1,750 per term).
    $1,750 Loan principal amount for the term (amount to be repaid)
    - 18 1.072% loan origination fee (no rounding; truncate cents)
    $1,732 Actual term disbursement credited to the student’s account

    Student loans have annual loan limits; however, if you want you can reduce the annual amount borrowed from the standard amount offered on your financial aid eAward.

  2. PLUS Loan Example: Annual loan for $10,000 split over two terms ($5,000 per term).
    $5,000 Loan principal amount for the term (amount to be repaid)
    - 214 4.288% loan origination fee (no rounding; truncate cents)
    $4,786 Actual term disbursement credited to the student’s account

    Calculating your PLUS Loan: You can reduce the amount you borrow from the amount offered on your Cedarville Parent PLUS authorization or Grad PLUS authorization.

The payment plan options already take into account the anticipated fees related to the loan(s) you have accepted as part of your payment plan.

Provided by Cedarville University – Financial Aid Office (updated 2014-06-18)