[Federal Register Volume 72, Number 214 (Tuesday, November 6, 2007)]
[Notices]
[Pages 62635-62637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21806]


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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, 2007 through June 30, 2008.

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SUMMARY: The Acting Chief Operating Officer for Federal Student Aid 
announces the interest rates for the period July 1, 2007 through June 
30, 2008 for loans made under the Federal Family Education Loan (FFEL) 
Program.

FOR FURTHER INFORMATION CONTACT: Don Watson, U.S. Department of 
Education, Room 114I2, UCP, 400 Maryland Avenue, SW., Washington, DC 
20202-5400. Telephone: (202) 219-7037.
    If you use a telecommunications device for the deaf (TDD), you may 
call

[[Page 62636]]

the Federal Relay Service (FRS) 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. Section 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 and before July 1, 2006;
     FFEL PLUS loans first disbursed on or after July 1, 1998 
and before July 1, 2006; 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, 2007, which is used to calculate the interest rates for the 
one-year period beginning on July 1, 2007, is 4.919 percent, which is 
rounded to 4.92 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, 2007 is 4.95 
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 ten percent. The interest rate for these loans for the 
period from July 1, 2007, through June 30, 2008, is 8.17 percent (4.92 
percent plus 3.25 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 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 with maximum interest rates of 
seven percent, eight percent, nine percent, or ten percent, 
respectively. For loans with fixed interest rates of seven percent that 
were converted to variable-rate loans, the interest rate for the period 
from July 1, 2007, through June 30, 2008, is the maximum interest rate 
of 7.00 percent. Note that because 4.92 percent plus 3.1 percent equals 
8.02 percent, which exceeds the maximum interest rate allowed, we use 
the maximum interest rate. For loans with fixed interest rates of eight 
percent, nine percent, or eight percent with an increase to ten percent 
that were converted to variable-rate loans, the interest rate for the 
period from July 1, 2007, through June 30, 2008, is the maximum 
interest rate of 8.00 percent. Note that because 4.92 percent plus 3.1 
percent equals 8.02 percent, which exceeds the maximum interest rate 
allowed, we use the maximum interest rate.

Interest Rates for Variable-Rate FFEL Stafford Loans

    1. For 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), with 
a maximum interest rate of nine percent. The interest rate for the 
period from July 1, 2007, through June 30, 2008, is 8.02 percent (4.92 
percent plus 3.1 percent).
    2. For 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, 
2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 
percent).
    3. For 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, 2007, through June 30, 2008, is 7.42 
percent (4.92 percent plus 2.5 percent); and
    (b) During all other periods, the interest rate for the period from 
July 1, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 
3.1 percent).
    4. For FFEL Stafford loans, first disbursed on or after July 1, 
1998, but before July 1, 2006, 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, 2007, through June 30, 2008, 
is 6.62 percent (4.92 percent plus 1.7 percent); and
    (b) During all other periods, the interest rate for the period from 
July 1, 2007, through June 30, 2008, is 7.22 percent (4.92 percent plus 
2.3 percent).

Interest Rates for Fixed-Rate FFEL Stafford Loans

    1. For FFEL Stafford loans for which the first disbursement was 
made on or after July 1, 2006, the interest rate is fixed at 6.80 
percent.

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

    1. For 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, 2007, through June 30, 
2008, is 8.20 percent (4.95 percent plus 3.25 percent).
    2. For 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, 2007, through June 30, 2008, is 8.05 percent (4.95 percent plus 
3.10 percent).
    3. For FFEL PLUS loans first disbursed on or after October 1, 1992, 
but before July 1, 1994, the interest rate may not exceed ten percent. 
The interest rate for the period from July 1, 2007, through June 30, 
2008, is 8.05 percent (4.95 percent plus 3.10 percent).
    4. For FFEL PLUS loans first disbursed on or after July 1, 1994, 
but prior to July 1, 1998, the interest rate may not exceed nine 
percent. The interest rate for the period from July 1,

[[Page 62637]]

2007, through June 30, 2008, is 8.05 percent (4.95 percent plus 3.10 
percent).
    5. For FFEL PLUS loans first disbursed on or after July 1, 1998, 
and before July 1, 2006, the interest rate may not exceed nine percent. 
The interest rate for the period from July 1, 2007, through June 30, 
2008, is 8.02 percent (4.92 percent plus 3.1 percent).
    6. FFEL PLUS loans first disbursed on or after July 1, 2006, have 
an interest rate that is fixed at 8.50 percent.

Interest Rates for FFEL Consolidation Loans

    1. For 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 nine 
percent.
    2. For 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 upward to the nearest whole 
percent.
    3. With respect to 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, 
2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 
percent).
    4. With respect to FFEL Consolidation loans for which the 
consolidation loan application was received by the lender on or after 
October 1, 1998, 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. With respect to consolidation loans, 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 three percent. 
For the quarter ending before July 1, 2007, the average 91-day Treasury 
bill rate was 4.895 percent (rounded to 4.90 percent). The maximum 
interest rate for the period from July 1, 2007, through June 30, 2008, 
is 7.90 percent (4.90 percent plus 3.0 percent). 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 the Consolidation loan is determined 
annually, for each 12-month period beginning on July 1 and ending on 
June 30.
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    Note: The official version of this document is the document 
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    Program Authority: 20 U.S.C. 1077a et seq.

    Dated: October 31, 2007.
Lawrence A. Warder,
Acting Chief Operating Officer, Federal Student Aid.
 [FR Doc. E7-21806 Filed 11-5-07; 8:45 am]
BILLING CODE 4000-01-P