The Higher Education Reconciliation Act of 2005, requires “the collection, and the deposit into the Federal Student Loan Reserve Fund . . . of a federal default fee of an amount equal to 1.0 percent of the principal amount of the loan.” The reserve funds are federally owned assets managed by student-loan guarantors and may be used only to pay lenders in the event of student-loan default or other specified circumstances, and to pay for successful guarantor default-prevention activities.

USA Funds has announced a revised loan-fee policy.