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What is a loan origination fee?

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What is a loan origination fee?

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This is a fee charged by the loan servicer (Direct Loans) for processing and insurance costs. It is deducted from the amount you borrow. For example, if you borrow $3500 through a Direct Loan, $35 will be deducted for the loan origination fee, and $3465 is what actually is disbursed to your student account for the year.

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Loan Origination Fees are shown as points or as a percentage. A one point or one-percent Origination Fee is equal to 1% of the loan amount.

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