[Federal Register Volume 64, Number 205 (Monday, October 25, 1999)]
[Notices]
[Pages 57524-57526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27729]



[[Page 57523]]

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Part III





Department of Education





_______________________________________________________________________



Office of Student Financial Assistance; William D. Ford Federal Direct 
Loan Program and Federal Family Education Loan Program; Notice

  Federal Register / Vol. 64, No. 205 / Monday, October 25, 1999 / 
Notices  

[[Page 57524]]



DEPARTMENT OF EDUCATION


Office of Student Financial Assistance; William D. Ford Federal 
Direct Loan Program and Federal Family Education Loan Program

AGENCY: Department of Education.

ACTION: Notice of interest rates for the William D. Ford Federal Direct 
Loan Program and the Federal Family Education Loan Program for the 
period July 1, 1999, through June 30, 2000.

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SUMMARY: The Chief Operating Officer for the Office of Student 
Financial Assistance announces the interest rates for variable-rate 
loans made under the William D. Ford Federal Direct Loan (Direct Loan) 
Program and the Federal Family Education Loan (FFEL) Program for the 
period July 1, 1999, through June 30, 2000.

FOR FURTHER INFORMATION CONTACT: For the FFEL Program: Brian Smith, 
Program Specialist. For the Direct Loan Program: Barbara F. Grayson, 
Program Specialist. Mailing address: Program Development Division, 
Office of Student Financial Assistance, U.S. Department of Education, 
Room 3045, ROB-3, 400 Maryland Avenue, SW, Washington, DC 20202-5345. 
Telephone: (202) 708-8242. Individuals who use a telecommunications 
device for the deaf (TDD) 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 persons listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: General--The Higher Education Act of 1965, 
as amended, (HEA) provides that variable interest rates apply to parent 
and student loans made under the Direct Loan and FFEL programs. 
Variable interest rates also apply to Direct Consolidation Loans for 
which the application was received before February 1, 1999, and to FFEL 
Consolidation loans for which the application was received on or after 
November 13, 1997, and before October 1, 1998. All other Consolidation 
loans have fixed interest rates based on the weighted average of the 
loans being consolidated.
    Except for Consolidation loans, the formulas for determining the 
interest rates charged to borrowers for Direct Loan Program loans and 
FFEL Program loans are established by section 455(b) of the HEA (20 
U.S.C. 1087e) for Direct Loan Program loans and section 427A of the HEA 
(20 U.S.C. 1077a) for FFEL Program loans. These interest rate formulas 
do not apply to fixed-rate FFEL loans made before October 10, 1992, 
unless the fixed-rate loan has been converted to a variable-rate loan.
    Consolidation loan interest rate formulas are established in 34 CFR 
685.215(g) and 34 CFR 685.202(a) for Direct Consolidation Loans for 
which the application was received before October 1, 1998; section 
455(b)(6)(D) and (E) of the HEA (20 U.S.C 1087e) for Direct 
Consolidation Loans for which the application is received on or after 
October 1, 1998, but before July 1, 2003; and section 428C of the HEA 
(20 U.S.C. 1078-3) for FFEL Consolidation loans.
    As noted below, interest rate caps apply to most Direct Loan and 
FFEL Program loans.
    The interest rates on variable-rate loans are determined annually 
and apply for each 12-month period beginning July 1 and ending June 30. 
For parent loans first disbursed on or after July 1, 1998, and all 
student loans, interest rates are based on the bond equivalent rate of 
91-day Treasury bills auctioned at the final auction held before June 
1st of each year. For parent loans first disbursed before July 1, 1998, 
interest rates are based on the bond equivalent rate of 52-week 
Treasury bills auctioned at the final auction held before June 1st of 
each year.
    The bond equivalent rate of the 91-day Treasury bills auctioned on 
May 24, 1999, (the last auction prior to June 1, 1999) is 4.621 
percent, which rounds to 4.62 percent.
    The bond equivalent rate of the 52-week Treasury bills auctioned on 
May 25, 1999, is 4.879 percent, which rounds to 4.88 percent.

William D. Ford Federal Direct Loan Program

Interest Rates for Direct Subsidized and Direct Unsubsidized Loans

    1. Direct Subsidized and Direct Unsubsidized Loans first disbursed 
prior to July 1, 1995--the interest rate may not exceed 8.25 percent: 
The interest rate for the period July 1, 1999, through June 30, 2000, 
is 7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    2. Direct Subsidized and Direct Unsubsidized Loans first disbursed 
on or after July 1, 1995, and before July 1, 1998--the interest rate 
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.12 percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1 
percent equals 7.72 percent).
    3. Direct Subsidized and Direct Unsubsidized Loans first disbursed 
on or after July 1, 1998, and before July 1, 2003--the interest rate 
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3 
percent equals 6.92 percent).

Interest Rates for Direct Subsidized and Direct Unsubsidized 
Consolidation Loans

    1. Direct Subsidized and Direct Unsubsidized Consolidation Loans 
first disbursed before July 1, 1998--the interest rate may not exceed 
8.25 percent:
    (a) During the in-school, grace, and deferment periods: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.12 percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1 
percent equals 7.72 percent).
    2. Direct Subsidized and Direct Unsubsidized Consolidation Loans 
for which the application was received before October 1, 1998, and the 
loan was first disbursed on or after July 1, 1998--the interest rate 
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3 
percent equals 6.92 percent).
    3. Direct Subsidized and Direct Unsubsidized Consolidation loans 
for which the application was received on or after October 1, 1998, and 
before February 1, 1999--the interest rate may not exceed 8.25 percent: 
The interest rate for the period July 1, 1999, through June 30, 2000, 
is 6.92 percent (4.62 percent plus 2.3 percent equals 6.92 percent).
    4. Direct Subsidized and Direct Unsubsidized Consolidation loans 
for which the application is received on or after February 1, 1999, and 
before July 1, 2003--the interest rate may not

[[Page 57525]]

exceed 8.25 percent: The interest rate is the weighted average of the 
interest rates on the loans consolidated, rounded to the nearest higher 
one-eighth of one percent.

Interest Rates for Direct PLUS Loans

    1. Direct PLUS loans first disbursed before July 1, 1998--the 
interest rate may not exceed 9 percent: The interest rate for the 
period July 1, 1999, through June 30, 2000, is 7.98 percent (4.88 
percent plus 3.1 percent equals 7.98 percent).
    2. Direct PLUS loans first disbursed on or after July 1, 1998, and 
before July 1, 2003--the interest rate may not exceed 9 percent: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).

Interest Rates for Direct PLUS Consolidation Loans

    1. Direct PLUS Consolidation loans first disbursed before July 1, 
1998--the interest rate may not exceed 9 percent: The interest rate for 
the period July 1, 1999, through June 30, 2000, is 7.98 percent (4.88 
percent plus 3.1 percent equals 7.98 percent).
    2. Direct PLUS Consolidation loans for which the application was 
received before October 1, 1998, and the loan was first disbursed on or 
after July 1, 1998--the interest rate may not exceed 9 percent: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    3. Direct PLUS Consolidation loans for which the application was 
received on or after October 1, 1998, and before February 1, 1999--the 
interest rate may not exceed 8.25 percent: The interest rate for the 
period July 1, 1999, through June 30, 2000, is 6.92 percent (4.62 
percent plus 2.3 percent equals 6.92 percent).
    4. Direct PLUS Consolidation loans for which the application is 
received on or after February 1, 1999, and before July 1, 2003--the 
interest rate may not exceed 8.25 percent: The interest rate is the 
weighted average of the interest rates on the loans consolidated, 
rounded to the nearest higher one-eighth of one percent.

Federal Family Education Loan Program

Interest Rates for ``Converted'' Variable-rate FFEL Stafford Loans

    1. Eight/ten percent loans that were subject to the provisions of 
section 427A(i)(1) of the HEA and that have been converted to a 
variable interest rate--the interest rate may not exceed 10 percent: 
The interest rate for the period July 1, 1999, through June 30, 2000, 
is 7.87 percent (4.62 percent plus 3.25 percent equals 7.87 percent).
    2. Seven percent, eight percent, nine percent and eight/ten percent 
loans that were subject to the provisions of section 427A(i)(3) of the 
HEA and that have been converted to a variable interest rate--the 
interest rate may not exceed seven percent, eight percent, nine 
percent, or ten percent, respectively: The interest rate for the period 
July 1, 1999, through June 30, 2000, is 7 percent for 7 percent loans 
and 7.72 percent for 8 percent, 9 percent, and 10 percent loans (4.62 
percent plus 3.1 percent equals 7.72 percent, which exceeds the cap for 
7 percent loans).

Interest Rates for Variable-rate FFEL Stafford Loans

    1. FFEL Stafford loans made to ``new'' borrowers for which the 
first disbursement was made (a) on or after October 1, 1992, but before 
July 1, 1994, or (b) on or after July 1, 1994, for a period of 
enrollment ending before July 1, 1994 (i.e. a late disbursement)--the 
interest rate may not exceed 9 percent: The interest rate for the 
period July 1, 1999, through June 30, 2000, is 7.72 percent (4.62 
percent plus 3.1 percent equals 7.72 percent).
    2. FFEL Stafford loans made to all borrowers, regardless of prior 
borrowing, for periods of enrollment that include or begin on or after 
July 1, 1994, for which the first disbursement is made on or after July 
1, 1994, but before July 1, 1995--the interest rate may not exceed 8.25 
percent: The interest rate for the period July 1, 1999, through June 
30, 2000, is 7.72 percent (4.62 percent plus 3.1 percent equals 7.72 
percent).
    3. FFEL Stafford loans made to all borrowers, regardless of prior 
borrowing, on or after July 1, 1995, but before July 1, 1998--the 
interest rate may not exceed 8.25 percent:
    (a) During the in-school, grace, or deferment period: The interest 
rate for the period July 1, 1999, through June 30, 2000, is 7.12 
percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1 
percent equals 7.72 percent).
    4. FFEL Stafford loans, first disbursed on or after July 1, 1998, 
but before July 1, 2003--the interest rate may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July 
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3 
percent equals 6.92 percent).

Interest Rates for FFEL PLUS and FFEL Supplemental Loans for Students 
(SLS) Loans

    1. Variable-rate FFEL PLUS and FFEL SLS loans first disbursed 
before October 1, 1992--the interest rate may not exceed 12 percent: 
The interest rate for the period July 1, 1999, through June 30, 2000, 
is 8.13 percent (4.88 percent plus 3.25 percent equals 8.13 percent).
    2. FFEL SLS loans first disbursed on or after October 1, 1992, for 
a period of enrollment beginning before July 1, 1994--the interest rate 
may not exceed 11 percent: The interest rate for the period July 1, 
1999, through June 30, 2000, is 7.98 percent (4.88 percent plus 3.1 
percent equals 7.98 percent).
    3. FFEL PLUS loans first disbursed on or after October 1, 1992, but 
before July 1, 1994--the interest rate may not exceed 10 percent: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.98 percent (4.88 percent plus 3.1 percent equals 7.98 percent).
    4. FFEL PLUS loans first disbursed on or after July 1, 1994, but 
prior to July 1, 1998--the interest rate may not exceed 9 percent: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.98 percent (4.88 percent plus 3.1 percent equals 7.98 percent).
    5. FFEL PLUS loans first disbursed on or after July 1, 1998, and 
before July 1, 2003--the interest rate may not exceed 9 percent: The 
interest rate for the period July 1, 1999, through June 30, 2000, is 
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).

Interest Rates for FFEL Consolidation Loans

    1. FFEL Consolidation loans made before July 1, 1994--the interest 
rate may not be less than 9 percent: The interest rate is the weighted 
average of the interest rates on the loans consolidated, rounded to the 
nearest whole percent.
    2. FFEL Consolidation loans made on or after July 1, 1994, for 
which the consolidation loan application was received by the lender 
before November 13, 1997: The interest rate is the weighted average of 
the interest rates on the loans consolidated, rounded upward to the 
nearest whole percent.
    3. FFEL Consolidation loans for which the consolidation loan 
application was received by the lender on or after November 13, 1997, 
and before October 1, 1998--the interest rate may not exceed 8.25 
percent: The

[[Page 57526]]

interest rate for the period July 1, 1999, through June 30, 2000, is 
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    4. FFEL Consolidation loans for which the consolidation loan 
application was received by the lender on or after October 1, 1998, and 
before July 1, 2003--the interest rate may not exceed 8.25 percent: The 
interest rate is the weighted average of the interest rates on the 
loans being consolidated, rounded to the nearest higher one-eighth of 
one percent.
    5. If a portion of a Consolidation loan is attributable to a loan 
made under subpart I of part A of title VII of the Public Health 
Service Act, the maximum interest rate for that portion of a 
Consolidation loan is determined annually, for each 12-month period 
beginning on July 1 and ending on June 30. The interest rate equals the 
average of the bond equivalent rates of the 91-day Treasury bills 
auctioned for the quarter ending prior to July 1, plus 3 percent. For 
the quarter ending prior to July 1, 1999, the average 91-day Treasury 
bill rate was 4.60 percent. The maximum interest rate for the period 
July 1, 1999, through June 30, 2000, is 7.60 percent (4.60 percent plus 
3.0 percent equals 7.60 percent).

Electronic Access to This Document

    You may view 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/fedreg.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, DC, 
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

    Program Authority: 20 U.S.C. 1077a and 20 U.S.C. 1087e.

    Dated: October 19, 1999.
Greg Woods,
Chief Operating Officer, Office of Student Financial Assistance.
[FR Doc. 99-27729 Filed 10-22-99; 8:45 am]
BILLING CODE 4000-01-U