Fees

Federal Origination Fee

The federal origination fee is paid by the lender to the U.S. Department of Education (ED). The lender may charge a lower origination fee to a Federal Stafford loan borrower, but is still responsible for remitting the full fee to ED. 
 
Federal Stafford loans are subject to a federal origination fee of 1% and Federal PLUS loans are subject to a 3% origination fee (effective July 1, 2008).

Federal Default Fee

The federal default fee (if charged by the guaranty agency) is paid by the lender to the guaranty agency. The lender may choose to pay all or part of the default fee on the borrower's behalf, or may require that the borrower pay it.

Federal Stafford and PLUS loans are subject to a default fee of 1% of the loan amount.

For loans guaranteed by ISAC on or after July 15, 2008, ISAC pays one-quarter (25%) of the 1% federally-mandated default fee on behalf of the Federal Stafford loan and graduate PLUS loan borrowers, with the remaining portion to be paid by either the lender or the student borrower. (Continuation of this benefit is subject to periodic review).

ISAC does not pay any portion of the 1% fee for Federal PLUS loan parent borrowers.

ISAC-approved lenders are required to remit the applicable portion of the 1% default fee to ISAC, whether that amount is collected from the borrower's loan proceeds or paid on the borrower's behalf by the lender.

Federal Default Fee Invoices

Federal Default Fee Invoices will be sent to lenders via e-mail on the first business day of each month. The invoices are sent to an e-mail address provided to ISAC by the lender. Two versions of the invoice are provided:

• PDF file, which can be read and printed with Adobe Acrobat Software.  A description of the data items on the invoice are available on the ISAC Federal Default Fee Invoice Description page.
• comma deliminated text, from which data can be exported into other platforms. Text file specifications are available for your reference.

Remitting the Federal Default Fee

Lenders have two options for remitting the default fees:

• Automated Debit - the monthly invoice serves as notification of details of the pending transaction and can be used by the lender for reconciliation purposes. Notification is also made when the transaction has taken place.
• Automated Clearinghouse (ACH) - The lender uses ISAC's banking information to initiate the payment transaction. Lenders wishing to use this payment method should contact Xoee Miranda, Assistant Comptroller, at xmiranda@isac.org for routing and account numbers.

Instructions for viewing ISAC Federal Default Fee Invoices and Remitting Payment

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