Rep. Susan Davis introduced legislation Wednesday to eliminate all administrative fees on federal student loans, potentially saving students over $1.5 billion per year.
“The debt saddling students when they leave college hurts not only the student but impacts our economy,” said Davis, a senior member of the House Committee on Education and the Workforce. “Massive student debt makes it harder for graduates to buy a home or maybe venture out on a new startup.
Davis’ office cite recent reports that show student loan debt has surpassed $1 trillion nationally.
The Fee Free Student Loan Act would remove all administrative fees, which can range from one to four percent, on federal student loans. For example, a parent taking out a $10,000 federal Parent PLUS loan to help send their child attend college would pay $400 up front with a four percent fee .
In 2010 federal student loans were taken out of the hands of private lenders, but the Department of Education continues to charge administration fees. Davis called this a “hidden tax” that adds billions of dollars to student debt every year.
Davis represents the53rd District, which includes La Mesa, Lemon Grove, Spring Valley and parts of San Diego, El Cajon, and Chula Vista.
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