The origination fee waswhen student loans were backed by banks, as a way to offset subsidies to lenders. Today, origination fees are used as a federal budget deficit reduction tool and generate billions of dollars in revenue for the Department of Education.
"A lot of people argue we should get rid of those fees because the issue is, you think you're borrowing $10,000 and then it turns out you actually owe $11,000," says Sandy Baum, senior fellow at the Urban Institute and professor emerita of economics at Skidmore College. "It would be much better to collect that money in a different way.
MakeIt When is the real source of student loan debt going to be targeted? Big colleges high tuitions.
MakeIt So what, the student loans will be forgiven so who cares about stinkin fees?
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