Student Loan Tax Elimination Act

This bill would end origination fees on federal Direct student loans. In plain terms, borrowers would no longer be charged an extra upfront fee when their federal loan money is first paid out. The change is written into the Higher Education Act and is called the Student Loan Tax Elimination Act.

Key points:

• Who is affected: People taking out new federal Direct Loans (including Direct Consolidation Loans).
• What changes: The law removes the rule that allows the government to charge origination fees on these loans, so those fees would be $0 going forward.
• When it starts: It applies to loans first paid out on or after July 1 following the date the bill becomes law. For Direct Consolidation Loans, it applies to applications received on or after that same July 1 date.