[Federal Register Volume 66, Number 178 (Thursday, September 13, 2001)]
[Notices]
[Pages 47637-47639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23040]


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DEPARTMENT OF EDUCATION


Student Financial Assistance; Federal Family Education Loan 
Program

AGENCY: Department of Education.

ACTION: Notice of interest rates for the Federal Family Education Loan 
Program for the period July 1, 2001, through June 30, 2002.

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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 Federal Family Education Loan (FFEL) Program for 
the period July 1, 2001, through June 30, 2002.

FOR FURTHER INFORMATION CONTACT: Brian Smith, Program Specialist. 
Mailing address: Program Development Division, 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 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION:

General

    Under title IV, part B of the Higher Education Act of 1965, as 
amended, (HEA), 20 U.S.C. Section 1071, et seq., most loans made to 
student and parent borrowers under the FFEL Program have variable 
interest rates.

[[Page 47638]]

    The formulas for determining the interest on variable rate FFEL 
Program loans are established in section 427A of the HEA (20 U.S.C. 
1077a).
    The interest rates on variable-rate loans are determined annually 
and apply to the following 12-month period beginning July 1 and ending 
June 30.
    As described below, interest rate caps apply to most FFEL Program 
loans.
    FFEL interest rate formulas use the bond equivalent rate of 91-day 
Treasury bills auctioned at the final auction held before June 1 of 
each year plus a statutorily established add-on to determine the 
variable interest rate for--
     FFEL fixed-rate Stafford loans first disbursed before 
October 1, 1992 that have been converted to variable-rate loans;
     All FFEL Subsidized and Unsubsidized Stafford Loans first 
disbursed after October 1, 1992;
     FFEL PLUS loans first disbursed on or after July 1, 1998; 
and
     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 bond equivalent rate of the 91-day Treasury bills auctioned on 
May 29, 2001, which is used to calculate the interest rates for the one 
year period beginning on July 1, 2001, is 3.688 percent (rounded to 
3.69 percent).
    For FFEL PLUS loans first disbursed before July 1, 1998, interest 
rates are calculated based on the weekly average of a 1-year constant 
maturity Treasury yield, as published by the Board of Governors of the 
Federal Reserve System, for the last calendar week ending on or before 
June 26.
    On June 22, 2001, the Board of Governors of the Federal Reserve 
System published the 1-year constant maturity Treasury yield average as 
3.46 percent.

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

    1. Under section 427A(i)(7) of the HEA, loans that were originally 
made with a fixed interest rate of eight percent with an increase to 
ten percent four years after commencement of the repayment period were 
converted to a variable interest rate that may not exceed 10 percent: 
The interest rate for these loans for the period from July 1, 2001, 
through June 30, 2002, is 6.94 percent (3.69 percent plus 3.25 percent 
equals 6.94 percent).
    2. Loans with fixed interest rates of seven percent, eight percent, 
nine percent, or eight percent with an increase to ten percent four 
years after commencement of the repayment period, that were subject to 
the provisions of section 427A(i)(3) of the HEA and were converted to 
variable-rate loans--the interest rate may not exceed seven percent, 
eight percent, nine percent, or ten percent, respectively: The interest 
rate for the period from July 1, 2001, through June 30, 2002, is 6.79 
percent (3.69 percent plus 3.1 percent equals 6.79 percent).

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--the interest rate may not exceed 
9 percent: The interest rate for the period from July 1, 2001, through 
June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent equals 
6.79 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 was 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 from July 1, 2001, 
through June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent 
equals 6.79 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 from July 1, 2001, through June 30, 2002, is 6.19 
percent (3.69 percent plus 2.5 percent equals 6.19 percent); and
    (b) During all other periods: The interest rate for the period from 
July 1, 2001, through June 30, 2002, is 6.79 percent (3.69 percent plus 
3.1 percent equals 6.79 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 from July 1, 2001, through June 30, 2002, 
is 5.39 percent (3.69 percent plus 1.7 percent equals 5.39 percent); 
and
    (b) During all other periods: The interest rate for the period from 
July 1, 2001, through June 30, 2002, is 5.99 percent (3.69 percent plus 
2.3 percent equals 5.99 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 from July 1, 2001, through June 30, 
2002, is 6.71 percent (3.46 percent plus 3.25 percent equals 6.71 
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 from July 
1, 2001, through June 30, 2002, is 6.56 percent (3.46 percent plus 3.1 
percent equals 6.56 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 from July 1, 2001, through June 30, 2002, 
is 6.56 percent (3.46 percent plus 3.1 percent equals 6.56 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 from July 1, 2001, through June 30, 2002, 
is 6.56 percent (3.46 percent plus 3.1 percent equals 6.56 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 from July 1, 2001, through June 30, 2002, 
is 6.79 percent (3.69 percent plus 3.1 percent equals 6.79 percent).

Interest Rates for FFEL Consolidation Loans

    1. 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 interest rate for the period from July 1, 2001, through 
June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent equals 
6.79 percent).
    2. 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, 2001, the average 91-day

[[Page 47639]]

Treasury bill rate was 3.77 percent. The maximum interest rate for the 
period from July 1, 2001, through June 30, 2002, is 6.77 percent (3.77 
percent plus 3.0 percent equals 6.77 percent).

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

    Dated: September 10, 2001.
Greg Woods,
Chief Operating Officer, Student Financial Assistance.
[FR Doc. 01-23040 Filed 9-12-01; 8:45 am]
BILLING CODE 4000-01-P