[Federal Register Volume 66, Number 178 (Thursday, September 13, 2001)]
[Notices]
[Pages 47639-47643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23041]


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DEPARTMENT OF EDUCATION


William D. Ford Federal Direct Loan Program

AGENCY: Department of Education.

ACTION: Notice of interest rates for the William D. Ford Federal Direct 
Loan Program for the period from July 1, 2001 through June 30, 2002.

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SUMMARY: The Chief Operating Officer for Student Financial Assistance 
announces the interest rates for loans made under the William D. Ford 
Federal Direct Loan (Direct Loan) Program for the period from July 1, 
2001 through June 30, 2002.

SUPPLEMENTARY INFORMATION:
    Section 455(b) of the Higher Education Act of 1965, as amended 
(HEA), 20 U.S.C. 1087e(b), provides formulas for determining the 
interest rates charged to borrowers of loans made under the Direct Loan 
Program including Federal Direct Stafford Loans (Direct Subsidized 
Loans), Federal Direct Unsubsidized Stafford Loans (Direct Unsubsidized 
Loans), Federal Direct PLUS Loans (Direct PLUS Loans) and Federal 
Direct Consolidation Loans (Direct Consolidation Loans).
    The Direct Loan Program includes loans with variable interest rates 
and loans with fixed interest rates. Most loans made under the Direct 
Loan Program have variable interest rates that change each year. The 
variable interest rate formula that applies to a particular loan 
depends on the date of the first disbursement of the loan. The variable 
rates are determined annually and are effective for each 12-month 
period beginning July 1 of one year and ending June 30 of the following 
year.
    In the case of some Direct Consolidation Loans, the interest rate 
is determined by the date on which the Direct Consolidation Loan 
application was received. Direct Consolidation Loans for which the 
application was received on or after February 1, 1999 have a fixed 
interest rate based on the weighted average of the loans that are 
consolidated rounded up to the nearest higher \1/8\ of one percent.
    Pursuant to section 455(b) of the HEA, 20 U.S.C. 1087e(b) the 
Direct Loan interest rate formulas use the bond equivalent rates of the 
91-day Treasury bills at the final auction held before June 1 of each 
year plus a statutory add-on percentage to determine the variable 
interest rate for--
     All Direct Subsidized Loans and Direct Unsubsidized Loans;
     Direct Consolidation Loans for which the application was 
received on or after July 1, 1998 and before February 1, 1999; and
     Direct PLUS Loans disbursed on or after July 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 on these 
loans is 3.688 percent (rounded to 3.69 percent).
    In addition, pursuant to section 455(b) of the HEA, 20 U.S.C. 
1087e(b), as amended by Public Law 106-554, the Consolidated 
Appropriations Act 2001, the interest rate for Direct PLUS Loans that 
were disbursed on or after July 1, 1994 and on or before July 1, 1998, 
is 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 
plus a statutory add-on percentage.
    The last calendar week ending on or before June 26 2001, was June 
22, 2001. On that date, the Board of Governors of the Federal Reserve 
System published the 1-year constant maturity Treasury yield average as 
3.46 percent.
    Below is specific information on the calculation of the interest 
rates for the Direct Loan Program. This information is listed in order 
by the date a loan was first disbursed or by the date that the 
Consolidation Application was received.
    In addition, a summary of the interest rates that are effective for 
the period July 1, 2001 through June 30, 2002, is included on charts at 
the end of this notice. These charts are organized by loan type. In 
each chart, the interest rates are arranged by the date a loan was 
first disbursed or by the date that the consolidation application was 
received.

FOR FURTHER INFORMATION CONTACT: Don 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 
alternative format (e.g., Braille, large print, audiotape or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

For Direct Loan Program Loans Disbursed On Or After July 1, 1994, 
and Before July 1, 1998

    The interest rate for Direct Subsidized Loans, Direct Unsubsidized 
Loans, and Direct Subsidized and Unsubsidized Consolidation Loans is 
the bond equivalent rate of the 91-day Treasury bills auctioned at the 
final auction held before June 1 plus 3.1 percent. However, for loans 
disbursed on or after July 1, 1995, and before July 1, 1998, during in 
school, grace, and deferment periods, the interest rate is the bond 
equivalent rate of the 91-day Treasury bills auctioned at the final 
auction held before June 1 plus 2.5 percent. These interest rates may 
not exceed 8.25 percent during any period. From July 1, 2001, to June 
30, 2002, the interest rate for Direct Subsidized Loans, Direct 
Unsubsidized Loans and Direct Subsidized and Unsubsidized Consolidation 
Loans that were disbursed on or after July 1, 1994, and before July 1, 
1998, is 6.19 percent during in-school, grace, and deferment periods 
and 6.79 percent during all other periods.
    The interest rate for Direct PLUS Loans and Direct PLUS 
Consolidation Loans is 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 
plus 3.1 percent. However, these

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interest rates may not exceed 9.0 percent during any period. From July 
1, 2001, to June 30, 2002, the interest rate for Direct PLUS Loans and 
Direct PLUS Consolidation Loans that were disbursed on or after July 1, 
1995 and before July 1, 1998, is 6.56 percent.

For Direct Loans Disbursed On Or After July 1, 1998, and Before 
October 1, 1998

    The interest rate for Direct Subsidized Loans, Direct Unsubsidized 
Loans, and Direct Subsidized and Unsubsidized Consolidation Loans is 
the bond equivalent rate of the 91-day Treasury bills auctioned at the 
final auction held before June 1 plus 2.3 percent. During in-school, 
grace, and deferment periods, the interest rate formula is the bond 
equivalent rate of the 91-day Treasury bills auctioned at the final 
auction held before June 1 plus 1.7 percent. However, these interest 
rates may not exceed 8.25 percent during any period. From July 1, 2001, 
to June 30, 2002, the interest rate for Direct Subsidized Loans, Direct 
Unsubsidized Loans, and Direct Subsidized and Unsubsidized 
Consolidation Loans that were disbursed on or after July 1, 1998 and 
before October 1, 1998, is 5.39 percent during in-school, grace, and 
deferment periods and 5.99 percent during all other periods.
    The interest rate for Direct PLUS Loans and Direct PLUS 
Consolidation Loans is the bond equivalent rate of the 91-day Treasury 
bills auctioned at the final auction held before June 1 plus 3.1 
percent. However, these interest rates may not exceed 9.0 percent 
during any period. From July 1, 2001, to June 30, 2002, the interest 
rate for Direct PLUS Loans and Direct PLUS Consolidation Loans that 
were disbursed on or after July 1, 1998, and before October 1, 1998, is 
6.79 percent.

For Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS 
Loans Disbursed On Or After October 1, 1998, and Before July 1, 
2003

    The interest rate for Direct Subsidized Loans and Direct 
Unsubsidized Loans is the bond equivalent rate of the 91-day Treasury 
bills auctioned at the final auction held before June 1 plus 2.3 
percent. During in-school, grace, and deferment periods, the interest 
rate is the bond equivalent rate of the 91-day Treasury bills plus 1.7 
percent. However, these interest rates may not exceed 8.25 percent 
during any period. From July 1, 2001, to June 30, 2002, the interest 
rate for Direct Subsidized Loans and Direct Unsubsidized Loans that 
were disbursed after July 1, 1998 is 5.39 percent during in-school, 
grace, and deferment periods and 5.99 percent during all other periods.
    The interest rate for Direct PLUS Loans is the bond equivalent rate 
of the 91-day Treasury bills auctioned at the final auction held before 
June 1 plus 3.1 percent. However, these interest rates may not exceed 
9.0 percent during any period. From July 1, 2001, to June 30, 2002, the 
interest rate for Direct PLUS Loans that were disbursed after July 1, 
1998, is 6.79 percent.

For Direct Consolidation Loans For Which The Application Was 
Received On Or After October 1, 1998, and Before February 1, 1999

    The interest rate for Direct Consolidation Loans for which the 
application was received during this period is the bond equivalent rate 
of the 91-day Treasury bills auctioned at the final auction held before 
June 1 plus 2.3 percent. However, these interest rates may not exceed 
8.25 percent during any period. From July 1, 2001, to June 30, 2002, 
the interest rate for Direct Consolidation Loans for which the 
application was received on or after October 1, 1998 and before 
February 1, 1999, these loans is 5.99 percent.

For Direct Consolidation Loans For Which The Application Was 
Received On Or After February 1, 1999, and Before July 1, 2003

    The interest rate for Direct Consolidation Loan for which the 
application was received on or after February 1, 1999, and before July 
1, 2003, is the lesser of 8.25 percent, or the weighted average of the 
loans consolidated, rounded to the nearest higher \1/8\ of one percent.

Electronic Access to This Document

    You may review this document, as published in the Federal Register, 
in text or Adobe Portable Document Format (PDF) on the Internet at the 
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http://www.ed.gov/legislation/FedRegister
http://ifap.ed.gov/IFAPWebApp/index.jsp

    To use the PDF, you must have Adobe Acrobat Reader, which is 
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    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: September 10, 2001.
Greg Woods,
Chief Operating Officer, Student Financial Assistance.

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[FR Doc. 01-23041 Filed 9-12-01; 8:45 am]
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