If it's time for you to file the FAFSA, you may be wondering if there is any type of fee that you have to pay. FAFSA stands for Free Application for Federal Student Aid, so as the name implies, there is NO fee to fill out and file the FAFSA.

In fact, the Higher Education Act of 1965 prohibits and bans any type of fee charged to fill out, process, or turn in the financial aid application. It is important to note that a fee CAN be charged by a third party who fills out the FAFSA for you or aids in filling it out and delivering the prepared application. Paid preparers do exist and they may charge you an hourly or one-time fee to help you through the process.

If you do not want to pay any type of fee, simply fill out the FAFSA on your own and turn it in through the proper channel.

Origination Fee for Student Loans

While it does not cost you anything to fill out and file the FAFSA, there are some charges that may surprise you along the way. Many students simply view these charges as part of the process or an application fee of some sort.

If you get a letter stating that you will receive $3,500 in student loans, the amount you collect is actually a bit less because you have to pay origination fees for the student loans. While the amount you receive is less than you were awarded, you still pay back the ENTIRE amount of the student loan.

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Fortunately, the origination fee is the only fee associated with federal student loans at this time. The amount you are charged is determined by federal law, which means it can fluctuate at any given time. Meaning the amount you pay one year may be more or less than the next several years.

For subsidized and unsubsidized federal student loans, the origination fee is 1.069 percent. This means that if you are awarded $7,500 in student loans, you would actually receive a total of $7,419.83. That is a total origination fee of $80.17.

Final Thoughts about the FAFSA and Associated Fees

As mentioned above, the FAFSA itself is free to file and will not cost you a dime unless you choose to use a third party to help you through the process. You will, however, pay a loan origination fee for your federal student loans should you accept them. Most borrowers consider this the application fee as it typically averages out to about $100 per student loan.

One thing to keep in mind about the student loan origination fee is that it may be tax deductible depending on whether or not it appears on your 1098-T form. You can always talk to your tax advisor to find out if you can deduct these additional expenses from your taxes.

If you want to apply for a student loan, you will need to start the process by filling out the FAFSA.

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