[Federal Register Volume 72, Number 214 (Tuesday, November 6, 2007)]
[Notices]
[Pages 62637-62639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21807]


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DEPARTMENT OF EDUCATION


William D. Ford Federal Direct Loan Program

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice of interest rates for the William D. Ford Federal Direct 
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 William D. Ford Federal Direct Loan 
(Direct Loan) 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 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: 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 for 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. Pursuant to section 455(b) of the HEA, 20 U.S.C. 1087e(b), the 
interest rate for Direct Subsidized Loans and Direct Unsubsidized Loans 
that are first disbursed on or after July 1, 2006, have a fixed 
interest rate of 6.80 percent. Direct PLUS Loans that are first 
disbursed on or after July 1, 2006, have a fixed interest rate of 7.90 
percent.
    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, 2007, which is used to calculate the interest rates on these 
loans, is 4.919 percent, which is rounded to 4.92 percent.
    In addition, pursuant to section 455(b) of the HEA, 20 U.S.C. 
1087e(b), as

[[Page 62638]]

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 weekly average of 1-year constant maturity Treasury yield for 
the last week ending on or before June 26, 2007 is 4.95 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.

For Direct Loan Program Loans First Disbursed On or After July 1, 1994, 
and Before July 1, 1995

    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. These interest rates 
may not exceed 8.25 percent during any period. From July 1, 2007, to 
June 30, 2008, the interest rate for Direct Subsidized Loans, Direct 
Unsubsidized Loans, and Direct Subsidized and Unsubsidized 
Consolidation Loans that were first disbursed on or after July 1, 1994, 
and before July 1, 1995, is 8.02 percent (4.92 percent plus 3.1 
percent) during all 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. These interest rates may not exceed 9.0 percent 
during any period. From July 1, 2007, to June 30, 2008, the interest 
rate for Direct PLUS Loans and Direct PLUS Consolidation Loans that 
were first disbursed on or after July 1, 1994 and before July 1, 1995, 
is 8.05 (4.95 percent plus 3.1 percent) percent for all periods.

For Direct Loan Program Loans First Disbursed On or After July 1, 1995, 
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, 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 2.5 percent. These interest rates 
may not exceed 8.25 percent during any period. From July 1, 2007, to 
June 30, 2008, the interest rate for Direct Subsidized Loans, Direct 
Unsubsidized Loans, and Direct Subsidized and Unsubsidized 
Consolidation Loans that were first disbursed on or after July 1, 1995, 
and before July 1, 1998, is 7.42 percent (4.92 percent plus 2.5 
percent) during in-school, grace, and deferment periods and 8.02 
percent (4.92 percent plus 3.1 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. These interest rates may not exceed 9.0 percent 
during any period. From July 1, 2007, to June 30, 2008, the interest 
rate for Direct PLUS Loans and Direct PLUS Consolidation Loans that 
were first disbursed on or after July 1, 1995 and before July 1, 1998, 
is 8.05 percent (4.95 percent plus 3.1 percent) during all periods.

For Direct Loans First 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. However, 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. These interest rates 
may not exceed 8.25 percent during any period. From July 1, 2007, to 
June 30, 2008, the interest rate for Direct Subsidized Loans, Direct 
Unsubsidized Loans, and Direct Subsidized and Unsubsidized 
Consolidation Loans that were first disbursed on or after July 1, 1998 
and before October 1, 1998, is 6.62 percent (4.92 percent plus 1.7 
percent) during in-school, grace, and deferment periods and 7.22 
percent (4.92 percent plus 2.3 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. These interest rates may not exceed 9.0 percent during any 
period. From July 1, 2007, to June 30, 2008, 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 8.02 
percent (4.92 percent plus 3.1 percent) during all periods.

For Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans First Disbursed On or After October 1, 1998, and Before July 1, 
2006

    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. However, during in-school, grace, and deferment periods, the 
interest rate formula is the bond equivalent rate of the 91-day 
Treasury bills plus 1.7 percent. These interest rates may not exceed 
8.25 percent during any period. From July 1, 2007, to June 30, 2008, 
the interest rate for Direct Subsidized Loans and Direct Unsubsidized 
Loans that were disbursed after July 1, 1998, and before July 1, 2006, 
is 6.62 percent (4.92 percent plus 1.7 percent) during in-school, 
grace, and deferment periods and 7.22 percent (4.92 percent plus 2.3 
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. These interest rates may not exceed 9.0 
percent during any period. From July 1, 2007, to June 30, 2008, the 
interest rate for Direct PLUS Loans that were disbursed after July 1, 
1998, and before July 1, 2006, is 8.02 percent (4.92 percent plus 3.1 
percent) during all periods.

For Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans First Disbursed On or After July 1, 2006

    The interest rate for Direct Subsidized Loans and Direct 
Unsubsidized Loans that were first disbursed on or after July 1, 2006 
is a fixed interest rate of 6.80 percent during all periods.
    The interest rate for Direct PLUS Loans that were first disbursed 
on or after July 1, 2006 is a fixed interest rate of 7.90 percent 
during all periods.

[[Page 62639]]

For Direct Consolidation Loans First Disbursed On or After October 1, 
1998 and For Which the Application Was Received Before October 1, 1998

    The interest rate for 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. However, 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. These interest rates may not exceed 8.25 percent during 
any period. From July 1, 2007, to June 30, 2008, the interest rate for 
Direct Subsidized and Unsubsidized Consolidation Loans that were first 
disbursed on or after October 1, 1998 and for which the application was 
received before October 1, 1998, is 6.62 percent (4.92 percent plus 1.7 
percent) during in-school, grace, and deferment periods and 7.22 
percent (4.92 percent plus 2.3 percent) during all other periods.
    The interest rate for 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. These interest rates may 
not exceed 9.0 percent during any period. From July 1, 2007, to June 
30, 2008, the interest rate for Direct PLUS Loans and Direct PLUS 
Consolidation Loans that were first disbursed on or after October 1, 
1998 and for which the application was received before October 1, 1998, 
is 8.02 percent (4.92 percent plus 3.1 percent) during all periods.

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 on or after October 1, 1998 and before 
February 1, 1999 is the bond equivalent rate of the 91-day Treasury 
bills auctioned at the final auction held before June 1 plus 2.3 
percent. These interest rates may not exceed 8.25 percent during any 
period. From July 1, 2007, to June 30, 2008, the interest rate for 
Direct Consolidation Loans for which the application was received on or 
after October 1, 1998 and before February 1, 1999, is 7.22 percent 
(4.92 percent plus 2.3 percent) during all periods.

For Direct Consolidation Loans For Which the Application Was Received 
On or After February 1, 1999

    The interest rate for Direct Consolidation Loans for which the 
application was received on or after February 1, 1999, 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.
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    Note: The official version of this document is the document 
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    Program Authority: 20 U.S.C. 1087 et seq..

    Dated: October 31, 2007.
Lawrence A. Warder,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. E7-21807 Filed 11-5-07; 8:45 am]
BILLING CODE 4000-01-P