[Federal Register Volume 79, Number 153 (Friday, August 8, 2014)]
[Notices]
[Pages 46424-46426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18785]


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DEPARTMENT OF EDUCATION


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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    Catalog of Federal Domestic Assistance (CFDA) Number: 84.268.

DATES: This notice is effective August 8, 2014.
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, 2014, 
through June 30, 2015, 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.

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 Federal Direct Consolidation Loans (Direct 
Consolidation Loans)(collectively, ``Direct 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

[[Page 46425]]

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. Direct Consolidation Loans for which 
the application was received on or after February 1, 1999, and prior to 
July 1, 2013, have a maximum interest 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 27, 2014, which is used to 
calculate the interest rates on these loans, is 0.03 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 20, 2014, which is used to calculate the interest 
rate on these loans, is 0.10 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 published a separate notice 
containing the interest rates for Direct Loans made for the current 
award year on July 1, 2014 (See 79 FR 37301).
    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                        Total rate
---------------------------------------------------------                -------------------------------------------------------------------------------
                                                             Max. rate                      In-school,                      In-school,
                                               First         (percent)     91-Day T-bill      grace,         All other        grace,         All other
       First disbursed on or after           disbursed                    rate (percent)     deferment        periods        deferment        periods
                                              before                                         (percent)       (percent)       (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994................................        7/1/1995            8.25            0.03            3.10            3.10            3.13            3.13
7/1/1995................................        7/1/1998            8.25            0.03            2.50            3.10            2.53            3.13
7/1/1998................................        7/1/2006            8.25            0.03            1.70            2.30            1.73            2.33
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                        Chart 2--Variable-Rate Direct PLUS Loans
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                                 Cohort                                                             Index rate
-------------------------------------------------------------------------                --------------------------------
                                                                                                              1-Year
                                                               First         Max. rate                       constant         Margin        Total Rate
               First disbursed on or after                   disbursed       (percent)     91-Day T-bill     treasury        (percent)       (percent)
                                                              before                      rate (percent)     maturity
                                                                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994................................................        7/1/1998            9.00  ..............            0.13            3.10            3.23
7/1/1998................................................        7/1/2006            8.25            0.03  ..............            3.10            3.13
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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.

                                  Chart 3--Variable-Rate Direct Subsidized and Direct Unsubsidized Consolidation Loans
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                         Cohort                                             Index rate                Margin                        Total rate
---------------------------------------------------------                -------------------------------------------------------------------------------
                                                             Max. rate                      In-school,                      In-school,
                                               First         (percent)     91-Day T-bill      grace,         All other        grace,         All other
       First disbursed on or after           disbursed                    rate (percent)     deferment        periods        deferment        periods
                                              before                                         (percent)       (percent)       (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994................................        7/1/1995            8.25            0.03            3.10            3.10            3.13            3.13
7/1/1995................................        7/1/1998            8.25            0.03            2.50            3.10            2.53            3.13
7/1/1998................................       10/1/1998            8.25            0.03            1.70            2.30            1.73            2.33
10/1/1998...............................     * 10/1/1998            8.25            0.03            1.70            2.30            1.73            2.33

[[Page 46426]]

 
10/1/1998 *.............................      * 2/1/1999            8.25            0.03            2.30            2.30            2.33            2.33
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                                                 Chart 4--Variable-Rate Direct PLUS Consolidation Loans
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                            Cohort                                                 Index rate                  Margin                  Total rate
--------------------------------------------------------------             -----------------------------------------------------------------------------
                                                                                            1-Year
                                                     First      Max. rate    91-Day T-     constant    In-school,   All other    In-school,   All other
           First disbursed on or after             disbursed    (percent)    bill rate     treasury      grace,      periods       grace,      periods
                                                     before                  (percent)     maturity    deferment    (percent)    deferment    (percent)
                                                                                          (percent)    (percent)                 (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994........................................     7/1/1998         9.00  ...........         0.10         3.10         3.10         3.20         3.20
7/1/1998........................................    10/1/1998         9.00         0.03  ...........         3.10         3.10         3.13         3.13
10/1/1998.......................................  * 10/1/1998         9.00         0.03  ...........         3.10         3.10         3.13         3.13
10/1/1998 *.....................................   * 2/1/1999         8.25         0.03  ...........         2.30         2.30         2.33         2.33
--------------------------------------------------------------------------------------------------------------------------------------------------------


  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
                                                              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.
----------------------------------------------------------------------------------------------------------------


    Note:  Interest rates for Direct Loans first disbursed on or 
after July 1, 2013, are published in a separate Federal Register 
notices, as follows:
     For Direct Loans first disbursed on or after July 1, 
2013, and prior to July 1, 2014, see 78 FR 59011.
     For Direct Loans first disbursed on or after July 1, 
2014, and prior to July 1, 2014, see 79 FR 37301.

    Electronic Access to This Document: 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 via the Federal Digital System 
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    You may also access documents of the Department published in the 
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by the Department.

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

    Dated: August 5, 2014.
James W. Runcie,
Chief Operating Officer Federal Student Aid.
[FR Doc. 2014-18785 Filed 8-7-14; 8:45 am]
BILLING CODE 4000-01-P