[Federal Register Volume 80, Number 178 (Tuesday, September 15, 2015)]
[Notices]
[Pages 55344-55346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23160]


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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 September 15, 2015.
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, 2015, 
through June 30, 2016, 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 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

[[Page 55345]]

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 26, 2015, which is used to calculate the 
interest rates on these loans, is 0.02 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 29, 2015, which is used to calculate the interest 
rate on these loans, is 0.29 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 17, 2015 (See 80 FR 42488).
    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         (%)       91-Day T-      grace,     All other      grace,     All other
                 First disbursed on or after                    disbursed                 bill rate    deferment   periods (%)   deferment   periods (%)
                                                                  before                     (%)          (%)                       (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994.....................................................     7/1/1995         8.25         0.02         3.10         3.10         3.12         3.12
7/1/1995.....................................................     7/1/1998         8.25         0.02         2.50         3.10         2.52         3.12
7/1/1998.....................................................     7/1/2006         8.25         0.02         1.70         2.30         1.72         2.32
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Chart 2--Variable-Rate Direct PLUS Loans
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                     Cohort                                          Index rate
------------------------------------------------             --------------------------
                                                                              1-Year
                                       First      Max. rate    91-Day T-     constant    Margin (%)   Total rate
    First disbursed on or after      disbursed       (%)       bill rate     treasury                    (%)
                                       before                     (%)        maturity
                                                                               (%)
----------------------------------------------------------------------------------------------------------------
7/1/1994..........................     7/1/1998         9.00  ...........         0.29         3.10         3.39
7/1/1998..........................     7/1/2006         8.25         0.02  ...........         3.10         3.12
----------------------------------------------------------------------------------------------------------------

    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         (%)       91-Day T-      grace,     All other      grace,     All other
                 First disbursed on or after                    disbursed                 bill rate    deferment   periods (%)   deferment   periods (%)
                                                                  before                     (%)          (%)                       (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994.....................................................     7/1/1995         8.25         0.02         3.10         3.10         3.12         3.12
7/1/1995.....................................................     7/1/1998         8.25         0.02         2.50         3.10         2.52         3.12
7/1/1998.....................................................    10/1/1998         8.25         0.02         1.70         2.30         1.72         2.32
10/1/1998....................................................  * 10/1/1998         8.25         0.02         1.70         2.30         1.72         2.32
* 10/1/1998..................................................   * 2/1/1999         8.25         0.02         2.30         2.30         2.32         2.32
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 55346]]


                                                 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,                In-school,
           First disbursed on or after             disbursed       (%)       bill rate     treasury      grace,     All other      grace,     All other
                                                     before                     (%)        maturity    deferment   periods (%)   deferment   periods (%)
                                                                                             (%)          (%)                       (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994........................................     7/1/1998         9.00  ...........         0.29         3.10         3.10         3.39         3.39
7/1/1998........................................    10/1/1998         9.00         0.02  ...........         3.10         3.10         3.12         3.13
10/1/1998.......................................  * 10/1/1998         9.00         0.02  ...........         3.10         3.10         3.12         3.12
* 10/1/1998.....................................  * 2/1/1999*         8.25         0.02  ...........         2.30         2.30         2.32         2.32
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Chart 5--Fixed-Rate Direct Subsidized, Direct Unsubsidized, Direct PLUS Loans, and Direct Consolidation Loans
----------------------------------------------------------------------------------------------------------------
                                                                  First        First
              Loan type                 Student grade level     disbursed    disbursed             Rate
                                                               on 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, 2015, see 79 FR 37301.
     For Direct Loans first disbursed on or after July 1, 2015, 
and prior to July 1, 2016, see 80 FR 42488.
    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 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
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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: September 10, 2015.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2015-23160 Filed 9-14-15; 8:45 am]
 BILLING CODE 4000-01-P