What Is a Loan Disbursement Fee?

What Is a Loan Disbursement Fee?

The loan disbursement fee is charged by the lender when student loan funds are given to the borrower. It's also called a loan or origination fee, states the Department of Education. The fee varies by lender and is usually calculated as a percentage of each loan disbursement.

For federal student loans dispersed during 2013 and 2014 school year, the loan fee was 1.072 percent for undergraduate students and 4.288 percent for parents and graduate students, according to the Department of Education. This fee is separate from the interest rate charged on the loan. Students do not pay a disbursement on Perkins loans.