If they charge you 6 percent up front, then you are either borrowing from a bad lender or your school is a direct lender. If you can choose your lender, there are plenty out there that will not charge you guarantee or origination fees. Or, some might charge you those fees, then give you a rebate. Lenders can charge a maximum of 3 percent origination fee and 3 percent guarantee fee. The origination fee is to process the paperwork. The guarantee fee is to provide the insurance guarantee from the federal government in case you default on your loan (then the government will pay the lender back). Stay away from lenders that charge origination and guarantee fees. You might have to investigate this information on your own because the institutions are typically not allowed to give preference to one lender over another. They can provide a list of "preferred lenders" but you can actually use anyone you wish.
Some schools are direct lending institutions. At direct lending schools, the school is loaning the money directly from the federal government and they will charge you a 4 percent origination fee (sometimes discounted to 3 percent). There is no guarantee fee with the direct lending since there is no gaurantor (you are getting your money directly from the federal government).
Call your financial aid office to find out if they are direct lending or not. If not, check with low cost lenders such as T.H.E., NowLoans, MedLoans, WellsFargo MedCAP, etc. You can find them on the internet easily and contact them directly...all that you need is their lender code to put onto the Master Promissory Note.
