[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
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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)
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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
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Chart 2--Variable-Rate Direct PLUS Loans
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Cohort Index rate
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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)
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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
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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)
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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)
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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
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Chart 5--Fixed-Rate Direct Subsidized, Direct Unsubsidized, Direct PLUS Loans, and Direct Consolidation Loans
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First First
Loan type Student grade level disbursed on disbursed Rate
or after before
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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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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.
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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