[Federal Register Volume 69, Number 204 (Friday, October 22, 2004)]
[Notices]
[Pages 62031-62033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2805]


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

DEPARTMENT OF EDUCATION


Federal Family Education Loan Program

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice of interest rates for the Federal Family Education Loan 
Program for the period July 1, 2004 through June 30, 2005.

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

SUMMARY: The Chief Operating Officer for Federal Student Aid announces 
the interest rates for loans made under the Federal Family Education 
Loan (FFEL) Program for the period July 1, 2004 through June 30, 2005.

FOR FURTHER INFORMATION CONTACT: Don Watson, U.S. Department of 
Education, room 114I2, UCP, 400 Maryland Avenue, SW., Washington, DC 
20202-5400. Telephone: (202) 377-4008.
    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 under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:

General

    Under title IV, part B of the Higher Education Act of 1965, as 
amended (HEA), 20 U.S.C.1071, et seq., most loans made to student and 
parent borrowers under the FFEL Program have variable interest rates.
    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 on or 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 24, 2004, which is used to calculate the interest rates for the 
one-year period beginning on July 1, 2004, is 1.066 percent, which is 
rounded to 1.07 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.
    The weekly average of the 1-year constant maturity Treasury yield 
for the last calendar week ending on or before June 26, 2004 is 2.16 
percent.

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

    1. Under section 427A(i)(7) of the HEA (20 U.S.C. 1077a (i)(7)) 
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

[[Page 62032]]

period from July 1, 2004, through June 30, 2005, is 4.32 percent (1.07 
percent plus 3.25 percent equals 4.32 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 (20 U.S.C. 1077a(i)(3)) 
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, 2004, 
through June 30, 2005, is 4.17 percent (1.07 percent plus 3.1 percent 
equals 4.17 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 (i.e. a late disbursement)--the 
interest rate may not exceed 9 percent: The interest rate for the 
period from July 1, 2004, through June 30, 2005, is 4.17 percent (1.07 
percent plus 3.1 percent equals 4.17 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, 2004, 
through June 30, 2005, is 4.17 percent (1.07 percent plus 3.1 percent 
equals 4.17 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, 2004, through June 30, 2005, is 3.57 
percent (1.07 percent plus 2.5 percent equals 3.57 percent); and
    (b) During all other periods: The interest rate for the period from 
July 1, 2004, through June 30, 2005, is 4.17 percent (1.07 percent plus 
3.1 percent equals 4.17 percent).
    4. FFEL Stafford loans, first disbursed on or after July 1, 1998, 
but before July 1, 2005--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, 2004, through June 30, 2005, 
is 2.77 percent (1.07 percent plus 1.7 percent equals 2.77 percent); 
and
    (b) During all other periods: The interest rate for the period from 
July 1, 2004, through June 30, 2005, is 3.37 percent (1.07 percent plus 
2.3 percent equals 3.37 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, 2004, through June 30, 
2005, is 5.41 percent (2.16 percent plus 3.25 percent equals 5.41 
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, 2004, through June 30, 2005, is 5.26 percent (2.16 percent plus 3.1 
percent equals 5.26 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, 2004, through June 30, 2005, 
is 5.26 percent (2.16 percent plus 3.1 percent equals 5.26 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, 2004, through June 30, 2005, 
is 5.26 percent (2.16 percent plus 3.1 percent equals 5.26 percent).
    5. FFEL PLUS loans first disbursed on or after July 1, 1998, and 
before July 1, 2005--the interest rate may not exceed 9 percent: The 
interest rate for the period from July 1, 2004, through June 30, 2005, 
is 4.17 percent (1.07 percent plus 3.1 percent equals 4.17 percent).

Interest Rates for FFEL Consolidation Loans

    1. FFEL Consolidation loans for which the consolidation loan was 
made by the lender before July 1, 1994--the interest rate is the 
weighted average of the interest rates on the loans consolidated, 
rounded to the nearest whole percent, but may not be less than 9 
percent.
    2. FFEL Consolidation loans for which the consolidation loan was 
made by the lender on or after July 1, 1994, and before November 13, 
1997--the interest rate is the weighted average of the interest rates 
on the loans consolidated, rounded 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 interest rate for the period from July 1, 2004, through 
June 30, 2005, is 4.17 percent (1.07 percent plus 3.1 percent equals 
4.17 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, 2005--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 \1/8\ 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, 2003, the average 91-day Treasury 
bill rate was 1.119 percent (rounded to 1.12 percent). The maximum 
interest rate for the period from July 1, 2004, through June 30, 2005, 
is 4.12 percent, which is rounded (1.12 percent plus 3.0 percent equals 
4.12 percent).

Electronic Access to This Document

    You may review this document, as well as all other documents of 
this Department published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/news/federegister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using 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.gpoaccess.gov/nara/index.html.


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


[[Page 62033]]


    Dated: October 19, 20, 2004.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
 [FR Doc. E4-2805 Filed 10-21-04; 8:45 am]
BILLING CODE 4000-01-P