Bulletin ID
DLB - 99 - 47
| PublicationDate: 7/1/99 BulletinID: DLB - 99 - 47 July 1999 DLB 99-47 Subject: Impact of the Reduced Origination Fee on Student Budget Calculations Dear Partner: This bulletin responds to questions some of you raised regarding the impact of the loan origination fee reduction on student budgets. Q. Do we have to recalculate student budgets that include a four percent origination fee now that the fee is being reduced to three percent? A. No. Student budgets that have already been constructed using the four percent fee do not need to be recalculated with the lower fee. Q. Some schools have developed and implemented complex systems and procedures that are used to calculate student budgets, including using a four percent origination fee for students who will be receiving loans. Can we continue to calculate student budgets using the four percent fee or must we modify our programs and procedures to use the new reduced fee of three percent? A. We are aware of the sometimes significant systems and procedural modifications that Direct Loan schools must now make in order to implement the origination fee reduction for their students. In order that we do not add to your workload, you do not have to immediately make the systemic changes necessary to calculate Cost of Attendance/Student Budgets using the lower fee. (Note: This does not apply to using the new fee percentage to calculate the origination fee in the loan origination/disbursement records.) However, you should make any needed modifications as soon as possible, and must do so by October 1, 1999. Thank you for your continued partnership in the Direct Loan Program. Sincerely, Margaret E. White Chair Direct Loan Task Force |