[Federal Register Volume 79, Number 153 (Friday, August 8, 2014)]
[Notices]
[Pages 46422-46424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18787]


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DEPARTMENT OF EDUCATION


Annual Notice of Interest Rates of Federal Student Loans Made 
Under the Federal Family Education Loan Program Prior to July 1, 2010

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

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    Catalog of Federal Domestic Assistance (CFDA) Number: 84.032.

SUMMARY: In accordance with section 427A 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 certain loans made under the Federal Family Education 
Loan (FFEL) Program prior to July 1, 2010. The Chief Operating Officer 
takes this action to give notice of FFEL Program loan interest rates to 
the public.

DATES: This notice is effective August 8, 2014.

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 427A of the Higher Education Act of 
1965, as amended (HEA) (20 U.S.C. 1077a), provides formulas for 
determining the interest rates charged to borrowers on loans made under 
the Federal Family Education Loan (FFEL) Program, including Federal 
Subsidized and Unsubsidized Stafford Loans, Federal PLUS Loans, and 
Federal Consolidation Loans.
    The FFEL Program includes loans with variable interest rates and 
loans with fixed interest rates. Most loans made under the FFEL 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 usually 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 427A(k) of the HEA, FFEL Program loans first 
disbursed on or after July 1, 2006, have a fixed interest rate.
    In the case of some Federal Consolidation Loans, the interest rate 
is determined by the date on which the Federal Consolidation Loan 
application was received. Federal Consolidation Loans for which the 
application was received on or after October 1, 1998, 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.
    FFEL variable interest rates are based on formulas that use the 
bond equivalent rate of the 91-day Treasury bills auctioned at the 
final auction held before June 1 of each year plus a statutorily 
established add-on. These formulas apply to: All Federal Subsidized and 
Unsubsidized Stafford Loans first disbursed before October 1, 1992, 
that have been converted to variable rate loans; all Federal Subsidized 
and Unsubsidized Stafford Loans first disbursed on or after October 1, 
1992, and before July 1, 2006; Federal PLUS Loans first disbursed on or 
after July 1, 1998, and before July 1, 2006; and Federal Consolidation 
Loans for which the Federal Consolidation Loan application was received 
on or after November 13, 1997, and before October 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.
    For Federal PLUS loans first disbursed before July 1, 1998, the 
interest rate 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 interest rates for loans made under the FFEL 
Program:
    Chart 1 contains information on the interest rates for Federal 
Subsidized and Unsubsidized Stafford Loans that were made as fixed-rate 
loans, but were subsequently converted to variable-rate loans.

[[Page 46423]]

    Chart 2 contains information on the interest rates for variable-
rate Federal Subsidized and Unsubsidized Stafford Loans.
    Chart 3 contains information on the interest rates for variable-
rate Federal PLUS Loans.
    Chart 4 contains information on the interest rates for fixed-rate 
Federal Consolidation Loans.
    Chart 5 contains information on the interest rates for fixed-rate 
Federal Subsidized and Unsubsidized Stafford and PLUS Loans.

             Chart 1--``Converted'' Variable-Rate Federal Subsidized and Unsubsidized Stafford Loans
----------------------------------------------------------------------------------------------------------------
            Cohort
-------------------------------                                             91-Day T-
     First           First      Original fixed interest rate   Max. rate    bill rate      Margin     Total rate
 disbursed on      disbursed              (percent)            (percent)    (percent)    (percent)    (percent)
   or after         before
----------------------------------------------------------------------------------------------------------------
      7/1/1988       7/23/1992  8.00, increasing to 10.00...        10.00         0.03         3.25         3.28
     7/23/1992       10/1/1992  8.00, increasing to 10.00...        10.00         0.03         3.25         3.28
     7/23/1992        7/1/1994  7.00........................         7.00         0.03         3.10         3.13
     7/23/1992        7/1/1994  8.00........................         8.00         0.03         3.10         3.13
     7/23/1992        7/1/1994  9.00........................         9.00         0.03         3.10         3.13
     7/23/1992        7/1/1994  8.00, increasing to 10.00...        10.00         0.03         3.10         3.13
----------------------------------------------------------------------------------------------------------------


    Note: The FFEL Program loans represented by the second row of 
the chart were only made to ``new borrowers'' on or after July 23, 
1992. Whether the FFEL Program loans represented by the third 
through sixth rows of the chart were made to a specific borrower 
depends on the interest rate on a borrower's existing loans at the 
time that the borrower received the loans between July 23, 1992 and 
prior to July 1, 1994.

    In Charts 2 and 3, a dagger following a date in a cohort field 
indicates that the trigger for the rate to apply is a period of 
enrollment for which the loan was intended either ``ending before'' or 
``beginning on or after'' the date in the cohort field.

                                        Chart 2--Variable-Rate Federal Subsidized and Unsubsidized Stafford Loans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Cohort                                                                       Margin                              Total rate
---------------------------------------                                      ---------------------------------------------------------------------------
                                            Max. rate        91-Day T-bill    In-school, grace,                     In-school, grace,
First disbursed on    First disbursed       (percent)        rate (percent)       deferment      All other periods      deferment      All other periods
     or after             before                                                  (percent)          (percent)          (percent)          (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
       10/1/1992            7/1/1994                9.00               0.03               3.10               3.10               3.13               3.13
        7/1/1994    7/1/1994 [dagger]               9.00               0.03               3.10               3.10               3.13               3.13
        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
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Note: The FFEL Program loans represented in the first row in 
Chart 2 were only made to ``new borrowers'' on or after October 1, 
1992. The FFEL Program loans represented in the second row in Chart 
2 were only made to ``new borrowers'' on or after July 1, 1994. The 
FFEL Program loans represented in the third row in Chart 2 must--in 
addition to having been first disbursed on or after July 1, 1994, 
and before July 1, 1995--have been made for a period of enrollment 
that began on or included July 1, 1994.

    In Charts 3 and 4, an asterisk following a date in a cohort field 
indicates that the relevant trigger is an application for a Federal 
Consolidation Loan being received either ``on or after'' or ``before'' 
the date in the cohort field. For example, the sixth row in Chart 3 
describes the interest rate for a Federal Consolidation Loan for which 
the application was received on or after November 13, 1997, but before 
October 1, 1998.

                                            Chart 3--Variable-Rate Federal PLUS, SLS, and Consolidation Loans
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                                                      Cohort                                        Index rate
                                         --------------------------------                --------------------------------
                                                                                                              1-Year
                Loan type                      First           First         Max. rate                       constant         Margin        Total rate
                                           disbursed on      disbursed       (percent)     91-Day T-bill     treasury        (percent)       (percent)
                                             or after         before                      rate (percent)     maturity
                                                                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLUS and SLS............................  ..............       10/1/1992           12.00  ..............            0.10            3.25            3.35
SLS.....................................       10/1/1992   [dagger] 7/1/           11.00  ..............            0.10            3.10            3.20
                                                                    1994
PLUS....................................       10/1/1992        7/1/1994           10.00  ..............            0.10            3.10            3.20
PLUS....................................        7/1/1994        7/1/1998            9.00  ..............            0.10            3.10            3.20
PLUS....................................        7/1/1998        7/1/2006            9.00            0.03  ..............            3.10            3.13
Consolidation...........................    * 11/13/1997     * 10/1/1998            8.25            0.03  ..............            3.10            3.13
HHS Portion of Consolidation............  ..............  ..............  ..............            0.03  ..............            3.00            3.03
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 46424]]

    The last row in Chart 3 refers to portions of Federal Consolidation 
Loans attributable to loans made by the U.S. Department of Health and 
Human Services under subpart I of part A of title VII of the Public 
Health Service Act.

                 Chart 4--Fixed-Rate Consolidation Loans
------------------------------------------------------------------------
     First           First
 disbursed on      disbursed       Max. rate              Rate
   or after         before         (percent)
------------------------------------------------------------------------
                      7/1/1994  ..............  Weighted average of
                                                 rates on the loans
                                                 included in the
                                                 consolidation, rounded
                                                 to nearest whole
                                                 percent, but not less
                                                 than 9.00%.
      7/1/1994    * 11/13/1997  ..............  Weighted average of
                                                 rates on the loans
                                                 included in the
                                                 consolidation, rounded
                                                 upward to nearest whole
                                                 percent.
     10/1/1998        7/1/2010            8.25  Weighted average of
                                                 rates on the loans
                                                 included in the
                                                 consolidation, rounded
                                                 to the nearest higher 1/
                                                 8 of 1 percent.
------------------------------------------------------------------------


                 Chart 5--Fixed-Rate Federal Subsidized and Unsubsidized Stafford and PLUS Loans
----------------------------------------------------------------------------------------------------------------
                                                                          First           First
               Loan type                     Student grade level      disbursed on      disbursed        Rate
                                                                        or after         before       (percent)
----------------------------------------------------------------------------------------------------------------
Subsidized.............................  Undergraduate Students....        7/1/2006        7/1/2008         6.80
Subsidized.............................  Undergraduate Students....        7/1/2008        7/1/2009         6.00
Subsidized.............................  Undergraduate Students....        7/1/2009        7/1/2010         5.60
Subsidized.............................  Graduate/Professional             7/1/2006        7/1/2010         6.80
                                          Students.
Unsubsidized...........................  All Students..............        7/1/2006        7/1/2010         6.80
PLUS...................................  Parents and Graduate/             7/1/2006        7/1/2010         8.50
                                          Professional Students.
----------------------------------------------------------------------------------------------------------------


    Note: No new loans have been made under the FFEL Program since 
June 30, 2010.

    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 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
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you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
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by the Department.

    Program Authority: 20 U.S.C. 1071 et seq.

    Dated: August 5, 2014.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2014-18787 Filed 8-7-14; 8:45 am]
BILLING CODE 4000-01-P