[Federal Register Volume 81, Number 113 (Monday, June 13, 2016)]
[Notices]
[Pages 38159-38160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13937]


-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION


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

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

-----------------------------------------------------------------------

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

DATES: This notice is effective June 13, 2016.
SUMMARY: The Chief Operating Officer for Federal Student Aid announces 
the interest rates for loans made under the William D. Ford Federal 
Direct Loan (Direct Loan) Program on or after July 1, 2016, but before 
July 1, 2017.

FOR FURTHER INFORMATION CONTACT: Rene Tiongquico, U.S. Department of 
Education, 830 First Street NE., 11th Floor, Washington, DC 20202. 
Telephone: (202) 377-4270 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

[[Page 38160]]

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).
    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans (collectively, Direct Loans) first disbursed on or after July 1, 
2013, have a fixed interest rate that is calculated based on the high 
yield of the 10-year Treasury notes auctioned at the final auction held 
before June 1 of each year, plus a statutory add-on percentage (a 
``margin''). Therefore, while the interest rate determination for new 
loans will be different from year to year, each of these loans will 
have a fixed interest rate for the life of the loan. In each case the 
calculated rate is capped by a maximum interest rate. On Wednesday, May 
11, 2016, the United States Treasury Department held a 10-year Treasury 
note auction that resulted in a high yield of 1.710%.
    The following chart contains specific information on the 
calculation of the interest rates for Direct Loans first disbursed on 
or after July 1, 2016, but before July 1, 2017. We publish a separate 
notice containing the interest rates for Direct Loans that were made in 
prior years.

      Fixed-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After 7/1/2016 but before 7/1/2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Cohort                Index rate
                                                         ------------------------------------------------
           Loan type               Student grade level         First           First          10-Year       Margin (%)    Fixed rate (%)   Max. rate (%)
                                                           disbursed on/     disbursed     treasury note
                                                               after          before            (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsidized....................  Undergraduates..........        7/1/2016        7/1/2017           1.710            2.05            3.76            8.25
Unsubsidized..................  Undergraduates..........        7/1/2016        7/1/2017           1.710            2.05            3.76            8.25
Unsubsidized..................  Graduate and                    7/1/2016        7/1/2017           1.710            3.60            5.31            9.50
                                 Professional Students.
PLUS..........................  Parents of Dependent            7/1/2016        7/1/2017           1.710            4.60            6.31           10.50
                                 Undergraduates.
PLUS..........................  Graduate and                    7/1/2016        7/1/2017           1.710            4.60            6.31           10.50
                                 Professional Students.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    If an application for a Direct Consolidation Loan is received by 
the Department on or after July 1, 2013, the interest rate on that loan 
is the weighted average of the consolidated loans, rounded up to the 
nearest higher \1/8\ of 1 percent. These Direct Consolidation Loans do 
not have an interest rate cap.
    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 
you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

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

    Dated: June 8, 2016.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2016-13937 Filed 6-10-16; 8:45 am]
 BILLING CODE 4000-01-P