The U.S. Department of Education (ED) charges a loan origination fee of 1.5% of the principal amount of each Direct Stafford Loan. This fee is deducted proportionately from each disbursement of your loan.
Direct Loans offer a 1.0% upfront rebate on this origination fee. If you fail to make 12 on-time monthly payments, a charge for the difference between the 0.5% origination fee and the 1.5% origination fee will be added to the outstanding balance of the loan.
Read more about Federal Direct Stafford Loans on the University of Maryland University College website.