Do the origination fee and Federal Default Fee changes apply to PLUS loans? If so, does that mean that PLUS borrowers will pay 4 percent in fees?
The origination-fee reductions do not apply to PLUS loans. The federal default fee requirement does apply to PLUS loans. As a result, for PLUS loans disbursed on or after July 1, 2006, the borrower will continue to be assessed a 3-percent origination fee. In addition, the borrower is subject to a 1-percent federal default fee, which may be paid on behalf of the borrower through nonfederal sources. If the federal default fee is not paid by other sources, the PLUS borrower would be required to pay 4 percent in fees.
