SBU Calls for Stronger Federal Student Aid on Capitol Hill

Earlier this month, Stony Brook University's Nick Prewett, assistant provost for the Office of Financial Aid & Scholarship Services, and Lyndsay Johnson, associate director for the Office of Financial Aid & Scholarship Services, traveled to Washington, D.C., to participate in a NASFAAHill Day, joining colleagues from institutions across the country to advocate for policies that strengthen access to higher education.

During their time on Capitol Hill, Prewett and Johnson met with the offices of Senator Chuck Schumer, Senator Kirsten Gillibrand, Rep. Nick LaLota, Rep. Yvette Clarke and Rep. Dan Goldman. Their message was clear: Congress must prioritize robust federal funding for student financial aid and take meaningful steps to simplify and improve the federal student loan system.

A central focus of their advocacy was the elimination of federal student loan origination fees, often described as a hidden "student loan tax." Originally created during the now-defunct bank-based student lending era to offset administrative costs, origination fees no longer serve their original purpose. Instead, they function as a federal budget deficit reduction tool, adding unnecessary costs and complexity for student borrowers.

In award year 2023-24 alone, student loan origination fees generated an estimated $1.7 billion in revenue for the federal government - approximately $6.5 billion over the past four award years. For students, these fees translate into tangible financial burdens. The average undergraduate borrower in a four-year program pays an estimated $227 in origination fees and associated interest under a standard 10-year repayment plan. Graduate students in a two-year program pay approximately $1,370 in fees and interest over the same repayment period.

"Students who rely on federal loans are already making a significant investment in their future. Charging them an additional fee simply for accessing that loan adds an unnecessary financial burden at the very moment they are trying to afford college," said Prewett. "Origination fees function as a hidden tax on students, increasing the total amount they must repay without providing any additional benefit to them. Eliminating these fees is a straightforward, bipartisan step Congress can take to make higher education more affordable and to ensure students are not penalized for pursuing a degree."

In addition to calling for the removal of origination fees, Prewett and Johnson urged Congress to improve student aid outcomes more broadly by strengthening federal investments that expand access and promote student success.

"Federal student aid is one of the most powerful tools we have to expand access to higher education, but it must keep pace with the real financial challenges students and families face," said Johnson. "Strengthening investments in need-based aid and simplifying the student aid system are critical steps toward improving student success and ensuring that cost is not the deciding factor in whether a student can enroll, persist and graduate."

By engaging directly with federal policymakers, Stony Brook University continues to champion policies that reduce financial barriers, promote transparency and ensure that higher education remains accessible and affordable for all students. Stony Brook's Office of Federal Relations works closely with congressional offices and committees on a regular basis to advocate for robust federal funding for student financial aid and for policies that better serve students and families.