[Federal Register Volume 78, Number 168 (Thursday, August 29, 2013)]
[Notices]
[Pages 53431-53433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21144]


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DEPARTMENT OF EDUCATION

[Catalog of Federal Domestic Assistance (CFDA) Number: 84.268]


Annual Notice of Interest Rates of Federal Student Loans Made 
Under the William D. Ford Federal Direct Loan Program Prior to July 1, 
2013

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

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SUMMARY: In accordance with section 455(b)(9) of the Higher Education 
Act of 1965, as amended, the Chief Operating Officer for Federal 
Student Aid announces the interest rates for the period July 1, 2013, 
through June 30, 2014, for loans made under the William D. Ford Federal 
Direct Loan (Direct Loan) Program prior to July 1, 2013. The Chief 
Operating Officer takes this action to give notice of Direct Loan 
interest rates to the public.

DATES: This notice is effective August 29, 2013.

FOR FURTHER INFORMATION CONTACT: Ian Foss, U.S. Department of 
Education, 830 First Street NE., Room 114I1, Washington, DC 20202. 
Telephone: (202) 377-3681 or by email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or compact 
disc) 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 Subsidized 
Stafford Loans (Direct Subsidized Loans); Federal Direct Unsubsidized 
Stafford Loans (Direct Unsubsidized Loans); Federal Direct PLUS Loans 
(Direct PLUS Loans); and

[[Page 53432]]

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 before July 1, 2006, have variable interest rates that 
change each year. In most cases, 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.
    Under section 455(b) of the HEA, Direct Loans first disbursed on or 
after July 1, 2006, have a fixed interest rate.
    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. This fixed rate is based on the weighted average of the 
loans that are consolidated, rounded up to the nearest higher 1/8 of 
one percent up to a maximum rate of 8.25 percent.
    Under section 455(b) of the HEA, the Direct Loan variable interest 
rates are based on formulas that use the bond equivalent rates of the 
91-day Treasury bills auctioned at the final auction held before June 1 
of each year, plus a statutory add-on percentage. These formulas apply 
to: 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. In each case, the calculated rate 
is capped by a maximum interest rate. The bond equivalent rate of the 
91-day Treasury bills auctioned on May 28, 2013, which is used to 
calculate the interest rates on these loans, is 0.046 percent, which is 
rounded to 0.05 percent.
    In addition, under section 455(b)(4) of the HEA, the interest rate 
for Direct PLUS Loans that were first disbursed on or after July 1, 
1994, and before July 1, 1998, is based on the weekly average of the 
one-year constant maturity Treasury yield, as published by the Board of 
Governors of the Federal Reserve System on the last day of the calendar 
week ending on or before June 26 of each year, plus a statutory add-on 
percentage. The calculated rate is capped by a maximum interest rate. 
The weekly average of the one-year constant maturity Treasury yield 
published on June 21, 2013, which is used to calculate the interest 
rate on these loans, is 0.13 percent.
    This notice includes five charts containing specific information on 
the calculation of the interest rates for loans made under the Direct 
Loan Program prior to July 1, 2013. We publish a separate notice 
containing the interest rates for Direct Loans made for the current 
award year.
    Chart 1 contains information on the interest rates for variable-
rate Direct Subsidized and Direct Unsubsidized Loans.
    Chart 2 contains information on the interest rates for variable-
rate Direct PLUS Loans.
    Chart 3 contains information on the interest rates for variable-
rate Direct Subsidized Consolidation Loans and Direct Unsubsidized 
Consolidation Loans.
    Chart 4 contains information on the interest rates for variable-
rate Direct PLUS Consolidation Loans.
    Chart 5 contains information on the interest rates for fixed-rate 
Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans, and 
Direct Consolidation Loans.

                                         Chart 1--Variable-Rate Direct Subsidized and Direct Unsubsidized Loans
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                                 Cohort                                               Index rate         Margin (percent)         Total rate (percent)
------------------------------------------------------------------------               (percent)   -----------------------------------------------------
                                                              First      Max. rate ----------------   In-school,                 In-school,
              First disbursed on or after                   disbursed    (percent)   91-Day T-bill      grace,      All other      grace,      All other
                                                             before                      rate          deferment     periods      deferment     periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994...............................................        7/1/1995       8.25            0.05            3.10       3.10            3.15       3.15
7/1/1995...............................................        7/1/1998       8.25            0.05            2.50       3.10            2.55       3.15
7/1/1998...............................................       10/1/2006       8.25            0.05            1.70       2.30            1.75       2.35
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Chart 2--Variable-Rate Direct PLUS Loans
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                     Cohort                                      Index rate (percent)
------------------------------------------------           --------------------------------
                                                 Max. rate                      1-Year        Margin     Total
                                      First      (percent)   91-day T-bill     constant     (percent)     rate
  First disbursed on or after       disbursed                    rate          treasury                (percent)
                                     before                                    maturity
----------------------------------------------------------------------------------------------------------------
7/1/1994.......................        7/1/1998       9.00  ..............            0.13       3.10       3.23
7/1/1998.......................       10/1/2006       8.25            0.05  ..............       3.10       3.15
----------------------------------------------------------------------------------------------------------------

    In Charts 3 through 5, an asterisk following a date in a cohort 
field indicates that the trigger for the rate to apply is an 
application for a Direct Consolidation Loan being received either ``on 
or after'' or ``before'' the date in the cohort field. For example, the 
fourth row in Chart 3 describes the interest rate for Direct Subsidized 
and Unsubsidized Consolidation Loans for which the application was 
received before October 1, 1998, and that were first disbursed on or 
after October 1, 1998.

[[Page 53433]]



                                  Chart 3--Variable-Rate Direct Subsidized and Direct Unsubsidized Consolidation Loans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Cohort                                               Index rate         Margin (percent)         Total rate (percent)
------------------------------------------------------------------------               (percent)   -----------------------------------------------------
                                                              First      Max. rate ----------------   In-school,                 In-school,
              First disbursed on or after                   disbursed    (percent)   91-day T-bill      grace,      All other      grace,      All other
                                                             before                 rate (percent)     deferment     periods      deferment     periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994...............................................        7/1/1995       8.25            0.05            3.10       3.10            3.15       3.15
7/1/1995...............................................        7/1/1998       8.25            0.05            2.50       3.10            2.55       3.15
7/1/1998...............................................       10/1/1998       8.25            0.05            1.70       2.30            1.75       2.35
10/1/1998..............................................   \*\ 10/1/1998       8.25            0.05            1.70       2.30            1.75       2.35
10/1/1998\*\...........................................    \*\ 2/1/1999       8.25            0.05            2.30       2.30            2.35       2.35
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                 Chart 4--Variable-Rate Direct PLUS Consolidation Loans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                         Cohort                                          Index rate (percent)            Margin (percent)         Total rate (percent)
--------------------------------------------------------           -------------------------------------------------------------------------------------
                                                         Max. rate                      1-Year
                                              First      (percent)   91-day T-bill     constant       In-school,    All other    In-school,    All other
      First disbursed on or after           disbursed                    rate          treasury         grace,       periods       grace,       periods
                                             before                                    maturity        deferment                  deferment
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994...............................        7/1/1998       9.00  ..............            0.13            3.10       3.10            3.23       3.23
7/1/1998...............................       10/1/1998       9.00            0.05  ..............            3.10       3.10            3.15       3.15
10/1/1998..............................   \*\ 10/1/1998       9.00            0.05  ..............            3.10       3.10            3.15       3.15
10/1/1998\*\...........................    \*\ 2/1/1999       8.25            0.05  ..............            2.30       2.30            2.35       2.35
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Chart 5--Fixed-Rate Direct Subsidized, Direct Unsubsidized, Direct PLUS Loans, and Direct Consolidation Loans
----------------------------------------------------------------------------------------------------------------
                                                                First           First
             Loan type               Student grade level    disbursed on      disbursed        Rate (percent)
                                                              or after         before
----------------------------------------------------------------------------------------------------------------
Subsidized........................  Undergraduates.......        7/1/2006        7/1/2008  6.80
Subsidized........................  Undergraduates.......        7/1/2008        7/1/2009  6.00
Subsidized........................  Undergraduates.......        7/1/2009        7/1/2010  5.60
Subsidized........................  Undergraduates.......        7/1/2010        7/1/2011  4.50
Subsidized........................  Undergraduates.......        7/1/2011        7/1/2013  3.40
Subsidized........................  Graduate/Professional        7/1/2006        7/1/2012  6.80
                                     Students.
Unsubsidized......................  All..................        7/1/2006        7/1/2013  6.80
PLUS..............................  Parents and Graduate/        7/1/2006        7/1/2013  7.90
                                     Professionals.
Consolidation.....................  All..................        2/1/1999        7/1/2013  Weighted average of
                                                                                            rates on the loans
                                                                                            included in the
                                                                                            consolidation,
                                                                                            rounded to \1/8\ of
                                                                                            1 percent, up to
                                                                                            8.25 percent.
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    Program Authority: 20 U.S.C. 1087 et seq.

    Dated: August 26, 2013.
James F. Manning,
Chief of Staff of Federal Student Aid, delegated the authority to 
perform the functions and duties of the Chief Operating Officer of 
Federal Student Aid.
[FR Doc. 2013-21144 Filed 8-28-13; 8:45 am]
BILLING CODE 4000-01-P