The Biden administration aims to reduce student loan costs by eliminating origination fees, unnecessary charges that can add thousands of dollars to student debt. The government considers these fees unfair and burdensome, particularly for students from low-income backgrounds and minority-serving institutions. The administration is also working to curb excessive fees charged by banks on student bank accounts and end automatic billing for textbooks on tuition, giving students more choice and financial relief.
The CFPB's new rule caps late fees at $8 per occurrence, saving card users an estimated $220 annually. The rule targets the excessive fees charged by credit card companies, particularly to low-credit-score borrowers. It ends automatic inflation adjustments and requires fees to cover only collection costs. Industry groups opposed the change, but the CFPB maintains its authority under the Card Act. The rule takes effect 60 days after publication in the Federal Register.
