H.R. 3165 — Student Loan Tax Elimination Act

This section eliminates origination fees on Federal Direct Loans (i.e., Federal Direct Stafford Loans, Federal Direct PLUS Loans, Federal Direct Consolidation Loans, and Federal Direct Unsubsidized Stafford Loans) by repealing the fee provisions of section 455(c) of the Higher Education Act of 1965. The repeal applies to loans for which the first disbursement of principal is made on or after July 1 following enactment (or, for Federal Direct Consolidation Loans, the application is received on or after such date). (Thus, borrowers receive 100% of approved loan amounts without upfront fee deductions previously ranging up to approximately 4%.)