[Federal Register Volume 64, Number 128 (Tuesday, July 6, 1999)]
[Notices]
[Pages 36542-36546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17084]



[[Page 36541]]

_______________________________________________________________________

Part VI





Department of Education





_______________________________________________________________________



William D. Ford Federal District Loan Program; Notice

  Federal Register / Vol. 64, No. 128 / Tuesday, July 6, 1999 / 
Notices  

[[Page 36542]]



DEPARTMENT OF EDUCATION


William D. Ford Federal Direct Loan Program

AGENCY: Department of Education.

ACTION: Notice of the annual updates to the income contingent repayment 
plan formula.

-----------------------------------------------------------------------

SUMMARY: The Secretary announces the annual updates to the income 
percentage factors for 1999. Under the William D. Ford Federal Direct 
Loan (Direct Loan) Program, borrowers may choose to repay their student 
loans under the income contingent repayment plan, which bases the 
repayment amount on the borrower's income and family size, loan amount, 
and interest rate. Each year, the formula for calculating a borrower's 
payment is adjusted to reflect changes due to inflation. This Notice 
contains updated sample income contingent repayment amounts for single 
and married or head-of-household borrowers at various income and debt 
levels. These updates are effective from July 1, 2000 to June 30, 2001.

FOR FURTHER INFORMATION CONTACT: Donald Watson, U.S. Department of 
Education, Room 3045, ROB-3, 400 Maryland Avenue, SW, Washington, DC 
20202-5400. Telephone: (202) 708-8242. If you use a telecommunications 
device for the deaf (TDD) you may call the Federal Information relay 
Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: Direct Loan Program borrowers may choose to 
repay their Direct Loans under the income contingent repayment plan. 
The attachment to this Notice provides updates to four sources of 
information used to calculate the borrower's monthly payment amount: 
examples of how the calculation of the monthly ICR repayment amount is 
performed, the income percentage factors, the constant multiplier 
chart, and charts showing sample repayment amounts.
    We have updated the income percentage factors to reflect changes 
based on inflation. We have revised the income percentage factor table 
by changing the dollar amounts of the incomes shown by a percentage 
equal to the estimated percentage change in the Consumer Price Index 
for all Urban Consumers from December 1998 to December 1999. Further, 
we provide examples of monthly repayment amount calculations and two 
charts. the charts show sample repayment amounts for single, and 
married or head of household borrowers at various income and debt based 
on the updated income percentage factors.
    The updated income percentage factors, at any given income, may 
cause a borrower's payments to be slightly lower than they were in 
prior years. This updated amount more accurately reflects the impact of 
inflation on a borrower's current ability to repay.

Electronic Access to This Document

    You may review this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

To use the PDF, you must have the Adobe Acrobat Reader Program with 
search, which is available free at either of the previous sites. If you 
have questions about using the PDF, call the U.S. Government Printing 
Office (GPO), toll free at 1-888-293-6498 or in the Washington, D.C., 
area at (202) 512-1530

    Note: The official version of this document is the document 
published in the Federal Register. Free internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO access at: http//www.access.gpo.gov/
nara/index.html

(Catalog of Federal Domestic Assistance Number 84.268 William D. 
Ford Federal Direct Loan Program)

    (Program Authority: 20 U.S.C. 1087 et seq.)

    Dated: June 30, 1999.
Greg Woods,
Chief, Operating Officer.

Attachment--Examples of the Calculations of Monthly Repayment 
Amounts

    Example 1. This example assumes you are a single borrower with 
$15,000 in Direct Loans, the interest rate being charged is 8.25 
percent, and you have an adjusted gross income (AGI) of $23,912.
    Step 1: Determine your annual payments based on what you would 
pay over 12 years using standard amortization. To do this, multiply 
your principal balance by the constant multiplier for 8.25 percent 
interest (0.1315449). The constant multiplier is a factor used to 
calculate amortized payments at a given interest rate over a fixed 
period of time. (See the constant multiplier chart below to 
determine the constant multiplier you should use for the interest 
rate on your loan. If your exact interest rate is not listed, use 
the next highest for estimation purposes.)

 0.1315449  x  $15,000 = $1,973.17

    Step 2: Multiply the result by the income percentage factor 
shown in the income percentage factor table that corresponds to your 
income (if your income is not listed, you can calculate the 
applicable income percentage factor by following the instructions 
under the interpolation heading below):

 80.33  x  $1,973.18  100 = $1,585.06

    Step 3: Determine 20 percent of your discretionary income. 
Because you are a single borrower, subtract the poverty level for a 
family of one, as published in the Federal Register on March 18, 
1999 (64 FR 13428), from your income and multiply the result by 20%:

 $23,912 - $8,240 = $15,672
 $15,672  x  0.20 = $3,134.40

    Step 4: Compare the amount from step 2 with the amount from step 
3. The lower of the two will be your annual payment amount. In this 
example, you will be paying the amount calculated under step 2. To 
determine your monthly repayment amount, divide the annual amount by 
12.

 $1,585.06  12 = $132.09

    Example 2. In this example, you are married. You and your spouse 
have a combined AGI of $30,035 and are repaying your loans jointly 
under the income contingent repayment plan. You have no children. 
You have a Direct Loan balance of $10,000, and your spouse has a 
Direct Loan balance of $15,000. Your interest rate is 8.25 percent.
    Step 1: Add you and your spouse's Direct Loan balances together 
to determine your aggregate loan balance.

 $10,000 + $15,000 = $25,000

    Step 2: Determine the annual payment based on what you would pay 
over 12 years using standard amortization. To do this, multiply your 
aggregate principal balance by the constant multiplier for 8.25 
percent interest (0.1315452). (See the constant multiplier chart to 
determine the constant multiplier you should use for the interest 
rate on your loan. If your exact interest rate is not listed, choose 
the next highest rate for estimation purposes.)

 0.1315449  x  $25,000 = $3,288.62

    Step 3: Multiply the result by the income percentage factor 
shown in the income percentage factor table that corresponds to you 
and your spouse's income (if you and your spouse's aggregate income 
is not listed, you can calculate the applicable income percentage 
factor by following the instructions under the interpolation heading 
below):

 87.61  x  $3,288.63  100 = $2,881.17

    Step 4: Determine 20 percent of your aggregate income. To do 
this, subtract the poverty level for a family of 2, as published in 
the Federal Register on March 18, 1999 (64 FR 13428), from your 
aggregate income and multiply the result by 20 percent:

 $30,035 - $11,060 = $18,975
 $18,975  x  0.20 = $3,795

    Step 5: Compare the amount from step 3 with the amount from step 
4. The lower of the two will be your annual payment amount. You and 
your spouse's will be paying the amount calculated under step 3.

[[Page 36543]]

To determine your monthly repayment amount, divide the annual amount 
by 12.

 $2,881.17  12 = $240.10

    Interpolation: If your income does not appear on the income 
percentage factor table, you will have to calculate the income 
percentage factor through interpolation. For example, assume you are 
single and your income is $30,000.
    Step 1: Find the interval between the closest income listed that 
is less than your income of $30,000 and the closest income listed 
that is greater than your income of $30,000.
    Step 2: Subtract these numbers (for this discussion, we will 
call the result the ``income interval''):

 $30,035 - $23,912 = $6,123

    Step 3: Find the interval between the two income percentage 
factors that are given for these incomes (for this discussion, we 
will call the result, the ``income percentage factor interval''):

 88.77% - 80.33% = 8.44%

    Step 4: Subtract the income shown on the chart that is 
immediately less than $30,000 from your income of $30,000:

 $30,000 - $23,912 = $6,088

    Step 5: Divide the result by the number representing the income 
interval:

 $6,088  $6,123 = 0.9943

    Step 6: Multiply the result by the income percentage factor 
interval:

 0.9943  x  8.44% = 8.39%

    Step 7: Add the result to the lower income percentage factor 
used to calculate the income percentage factor interval for $30,000 
in income:

 8.39% + 80.33% = 88.72%

The result is the income percentage factor that will be Used to 
calculate the monthly repayment amount under the Income contingent 
repayment plan.

BILLING CODE 40001-01-P

[[Page 36544]]

[GRAPHIC] [TIFF OMITTED] TN06JY99.015



[[Page 36545]]

[GRAPHIC] [TIFF OMITTED] TN06JY99.016



[[Page 36546]]

[GRAPHIC] [TIFF OMITTED] TN06JY99.017



[FR Doc. 99-17084 Filed 7-2-99; 8:45 am]
BILLING CODE 4000-01-C