On Friday, the Biden administration revealed its plan to address unjust fees for college students and individuals with student loans.
The White House is focusing on four types of unfair fees in its effort: fees for originating student loans, excessive banking fees for college students, automatic charges for textbooks, and the practice of colleges retaining unused money in a student's meal plan.
In a statement, the administration mentioned that each year, students, including those with federal student loans, face billions of dollars in fees or hidden costs for unused meal account funds, using college-affiliated banking accounts or credit cards, purchasing textbooks, or simply taking out a loan for school.
The administration also emphasized that students are not always given clear opportunities to avoid fees for services they do not want. This lack of transparency and misleading practices result in millions of students and borrowers losing money.
In the president's 2025 budget proposal, he is urging Congress to eliminate student loan origination fees, which can range from 1% to 4% for borrowers and contribute thousands of dollars to an individual's debt.
The Department of Education is also addressing college banking fees in the negotiated rulemaking process. Sometimes, colleges mandate the use of specific banks to access financial aid, but some of these institutions impose unexpected and costly hidden fees.
Furthermore, the department is also aiming to stop automatic billing for textbooks during the negotiating rulemaking process, giving students the option to opt out and purchase textbooks at a more affordable price.
Additionally, the department is formally considering regulations to ensure that students receive refunds for unused meal plans instead of the school keeping the remaining funds.
The White House stated that the fees addressed in this announcement may be imposed multiple times throughout a student's college or graduate school journey.
The administration mentioned that these actions would complement the president's previous efforts to prevent schools from withholding transcripts and to make the cost of college more transparent.
