Senators Reintroduce Bipartisan Bill to Eliminate Student Loan Origination Fees
By Hugh T. Ferguson, NASFAA Managing Editor
Congress is once again introducing legislation to remove origination fees on federal student loans, with a pair of bipartisan Senators unveiling a bicameral bill that would eliminate this fee placed on students.
In the Senate, Tim Kaine (D-Va.) and Jim Banks (R-Ind.) have spearheaded this renewed effort by unveiling the Student Loan Tax Elimination Act on Wednesday. A companion bill was introduced in May of this year by Reps. Lloyd Smucker (R-Penn.) and Sharice Davis (D-Kan.).
NASFAA has endorsed previous versions of this bill and has long advocated for the removal of student loan origination fees, which have generated a staggering $1.7 billion in revenue for the federal government in award year 2023-24, and $6.5 billion over the past four award years.
NASFAA President and CEO Melanie Storey urged Congress to eliminate these unnecessary fees on students.
“For years, NASFAA has raised concerns about the inequities created by student loan origination fees, which reduce the amount of aid students actually receive while increasing the cost of borrowing,” Storey said. “The Student Loan Tax Elimination Act ensures federal student loans include only the funds needed to support educational costs — eliminating a hidden tax on students and families — and provides a key step toward greater transparency and affordability.”
Origination fees were a result of legislation from 2010, when the Department of Education (ED) became responsible for issuing all federal student loans, but administration fees associated with private lenders were not removed. This oversight continues to be a relic of the bank-based guaranteed student loan program, where the fees offset subsidies to lenders.
NASFAA members frequently discuss the issue origination fees pose for students in visits to Capitol Hill through the Advocacy Pipeline.
Publication Date: 12/19/2025
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