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Student Loans: Slashing Origination Fees Keeps Banks Competitive: Seeking a 'total relationship' with students.(markets)

Many banks are starting to cover students' origination fees for education loans. But geography will determine how far three percent gets them.

To better compete in the highly competitive market, more banks have begun paying the federal government's three percent loan-origination fee, traditionally passed on to the borrower. It's a bold move-one certain to make a bank more appealing to students. But whether this move is putting banks ahead of the game, in line with the competition or fortifying its defenses is a matter of geography.

Six years ago, the Pennsylvania Higher Education Assistance Agency initiated the KeystoneBEST loan program, offering to underwrite one ...

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