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In statements and a fact sheet, the Biden administration highlighted Friday several ongoing efforts to crack down on so-called junk fees in higher education.
Those efforts include a proposal in the president’s latest budget to eliminate student loan origination fees. These fees, which are charged when borrowers first take out their loans, range from 1 percent to 4 percent depending on the type of loan, according to the fact sheet. Eliminating them is a bipartisan issue; Republicans have a similar provision in a recent bill overhauling the student loan system. Advocates cheered the Biden proposal when it was released March 11.
Biden vowed to end junk fees broadly in his 2023 State of the Union address and renewed those calls in this year’s speech earlier this month, connecting them with the president’s agenda to lower the cost of college.
“The college has a lot of power and sway and these are ways that, you know, essentially consumers—your students—are forced to pay for things that they should be able to look at cheaper costs,” Neera Tanden, domestic policy adviser to Biden, told NerdWallet in an exclusive interview.
The White House’s fact sheet also noted the administration’s efforts to prevent colleges from automatically billing for textbooks as part of tuition and fees, give students back their unused meal plan dollars and eliminate certain fees on college-sponsored deposit accounts. While the administration framed these steps as new actions, the Education Department wrapped up negotiations on these proposals earlier this month. Any changes to policy won’t take effect until July 1, 2025 at the earliest.
