Borrowing a loan from the federal government doesn’t always equate to getting every dollar you agree to pay back.
Origination fees are taken out of all Stafford and Parent PLUS loans students received from the federal government and due to sequestration, that amount has increased, said Valerie Miller, Ohio University’s director of student financial aid.
OU’s financial aid office does not collect any of the processing fees — they all remain with the U.S. Department of Education.
Before sequestration, students with Stafford loans had a 1 percent processing fee, while students with Parent PLUS loans had a 4 percent fee, Miller said.
Following sequestration, those rates rose to 1.051 percent and 4.204 percent for Stafford and Parent PLUS loans, respectively, Miller said.
In other words, before sequestration, if a student had a $5,500 Stafford loan, a processing fee of $55 was taken out of the loan. After sequestration, that figure jumped slightly to $57.81.
A similar Parent PLUS loan that previously would have had a $220 processing fee would now carry a $231.22 fee.
“(OU) has zero processing fees for anything in financial aid,” Miller said. “We don’t charge any fee on any type of aid program.”
OU’s financial aid doesn’t generate any revenue from the student aid it processes. The aid processed in the 2011-12 school year totaled slightly more than $400 million, Miller said.
Jate Nott, a senior studying journalism, said the origination fee didn’t bother him as he has to take out loans regardless.
“College is an investment, so look at it like I have to invest in myself,” Nott said. “It does suck and it is nerve-wracking.”
More concerned than Nott, Mikhail Plungis, a sophomore studying global studies, doesn’t like receiving less money than he felt he was promised.
“It is a federal loan so I feel like they’re entitled to take a little bit off the top, but personally, I think it’s my money and I’d like to have it,” Plungis said. “I just question the necessity of taking that little bit off the top.”
dd195710@ohiou.edu
@WillDrabold
— Samuel Howard contributed to this article.
