When I would get my student loan dispersements, the college wold get the check, I would sign it and they would take tuition and give me the change, however, 3% was taken out already as an origination fee. Is this legal. Can we cancel debt based on this?
It was very cheeky, I thought. Very cheeky indeed.
Was this a private student loan?
Do you know if the origination fee was being charged by the university, or by the lender?
File a defense to repayment, and write that in the form as one of the reasons your loans should be discharged/cancelled.
Fafsa Federal loans. I’ve never had any private loans. This was my stafford loans and also grad plus loans. I think it was washington mutual at the time that was charging the origination fee. I wish I still had the stubs. I don’t think it was the school, but might have been. The school I went to was OCOM, oregon College of Oriental Medicine (i know, very unwoke name)
I’m new to this and will look into that. I just want to gather as much info before I do submit anything. thanks for the response
@glevenbach do you have any paperwork at all that talks about this origination fee? If so, can you email it to me?
I would be interested in taking a closer look at this but without seeing some actual paperwork I don’t really know what happened or whether it was anything unusual or not.
I contacted the financial aid department at OCOM and here is what they had to say
The origination fee that was deducted was taken by the bank before they issued the funds to OCOM. The origination fee was federally regulated and required for all federal student loans.
So, it looks like this was common practice, but it seems very unfair that they take 3% before you see any of the money.
IS this really required for all federal student loans?