[Federal Register Volume 85, Number 10 (Wednesday, January 15, 2020)]
[Notices]
[Pages 2417-2419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00569]


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DEPARTMENT OF EDUCATION


Annual Notice of Interest Rates for Fixed-Rate Federal Student 
Loans Made Under the William D. Ford Federal Direct Loan Program

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

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SUMMARY: The Chief Operating Officer for Federal Student Aid announces 
the interest rates for Federal Direct Stafford/Ford Loans (Direct 
Subsidized Loans), Federal Direct Unsubsidized Stafford/Ford Loans 
(Direct Unsubsidized Loans), and Federal Direct PLUS Loans (Direct PLUS 
Loans) made under the William D. Ford Federal Direct Loan (Direct Loan) 
Program with first disbursement dates on or after July 1, 2019, and 
before July 1, 2020. Catalog of Federal Domestic Assistance (CFDA) 
Number: 84.268.

FOR FURTHER INFORMATION CONTACT: Jon Utz, U.S. Department of Education, 
830 First Street NE, 11th Floor, Washington, DC 20202. Telephone: (202) 
377-4040 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.

SUPPLEMENTARY INFORMATION: Direct Subsidized Loans, Direct Unsubsidized 
Loans, Direct PLUS Loans, and Direct Consolidation Loans (collectively 
referred to as ``Direct Loans'') may have either fixed or variable 
interest rates, depending on when the loan was first disbursed or, in 
the case of a Direct Consolidation Loan, when the application for the 
loan was received. Direct Subsidized Loans, Direct Unsubsidized Loans, 
and Direct PLUS Loans first disbursed on or after July 1, 2006, and 
Direct Consolidation Loans for which the application was received on or 
after February 1, 1999, have fixed interest rates that apply for the 
life of the loan. Direct Subsidized Loans, Direct Unsubsidized Loans, 
and Direct PLUS Loans first disbursed before July 1, 2006, and Direct 
Consolidation Loans for which the application was received before 
February 1, 1999, have variable interest rates that are determined 
annually and are in effect during the period from July 1 of one year 
through June 30 of the following year.
    This notice announces the fixed interest rates for Direct 
Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans with 
first disbursement dates on or after July 1, 2019, and before July 1, 
2020, and provides interest rate information for other fixed-rate 
Direct Loans. Interest rate information for variable-rate Direct Loans 
is announced in a separate Federal Register notice.

Fixed-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and 
Direct PLUS Loans First Disbursed on or After July 1, 2013

    Section 455(b) of the Higher Education Act of 1965, as amended 
(HEA) (20 U.S.C. 1087e(b)) includes formulas for determining the 
interest rates for all Direct Subsidized Loans, Direct Unsubsidized 
Loans, and Direct PLUS Loans first disbursed on or after July 1, 2013. 
The interest rate for these loans is a fixed rate that is determined 
annually for all loans first disbursed during any 12-month period 
beginning on July 1 and ending on June 30. The rate is equal to the 
high yield of the 10-year Treasury notes auctioned at the final auction 
held before June 1 of that 12-month period, plus a statutory add-on 
percentage that varies depending on the loan type and, for Direct 
Unsubsidized Loans, whether the loan was made to an undergraduate or 
graduate student. The calculated interest rate may not exceed a maximum 
rate specified in the HEA. If the interest rate formula results in a 
rate that exceeds the statutory maximum rate, the rate is the statutory 
maximum rate. Loans first disbursed during different 12-month periods 
that begin on July 1 and end on June 30 may have different interest 
rates, but the rate determined for any loan is a fixed interest rate 
for the life of the loan.
    On May 8, 2019, the United States Treasury Department held a 10-
year Treasury note auction that resulted in a high yield of 2.479 
percent.
    Chart 1 shows the fixed interest rates for Direct Subsidized Loans, 
Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or 
after July 1, 2019, and before July 1, 2020.

[[Page 2418]]



 Chart 1--Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After
                                        07/01/2019 and Before 07/01/2020
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                                                      10-Year
                                                  treasury  note                   Maximum rate        Fixed
           Loan type              Borrower type     high  yield     Add-on (%)          (%)        interest rate
                                                  05/08/2019 (%)                                        (%)
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Direct Subsidized Loans,        Undergraduate              2.479            2.05            8.25            4.53
 Direct Unsubsidized Loans.      students.
Direct Unsubsidized Loans \1\.  Graduate and               2.479            3.60            9.50            6.08
                                 professional
                                 students.
Direct PLUS Loans.............  Parents of                 2.479            4.60           10.50            7.08
                                 dependent
                                 undergraduate
                                 students,
                                 Graduate and
                                 professional
                                 students.
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\1\ Graduate and professional students are not eligible to receive Direct Subsidized Loans.

    For reference, Chart 2 compares the fixed interest rates for Direct 
Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans 
first disbursed during the period July 1, 2019, through June 30, 2020, 
with the fixed interest rates for loans first disbursed during each 
previous 12-month period from July 1, 2013, through June 30, 2019.

     Chart 2--Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After 07/01/2013 and Before 07/01/2020
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           First disbursed                               Fixed interest rates (%)
---------------------------------------------------------------------------------------------------
                                         Direct Subsidized
                                           Loans, Direct          Direct
                                           Unsubsidized     Unsubsidized Loans                                     Federal Register notice
     On/after             Before              Loans,           (graduate or      Direct PLUS Loans
                                          (undergraduate       professional
                                             students)           students)
--------------------------------------------------------------------------------------------------------------------------------------------------------
       07/01/2019          07/01/2020                4.53                6.08                7.08   N/A.
       07/01/2018          07/01/2019                5.05                6.60                7.60   83 FR 53864 (October 25, 2018).
       07/01/2017          07/01/2018                4.45                6.00                7.00   82 FR 29062 (June 27, 2017).
       07/01/2016          07/01/2017                3.76                5.31                6.31   81 FR 38159 (June 13, 2016).
       07/01/2015          07/01/2016                4.29                5.84                6.84   80 FR 42488 (July 17, 2015).
       07/01/2014          07/01/2015                4.66                6.21                7.21   79 FR 37301 (July 1, 2014).
       07/01/2013          07/01/2014                3.86                5.41                6.41   78 FR 59011 (September 25, 2013).
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Fixed-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and 
Direct PLUS Loans First Disbursed on or After July 1, 2006, and Before 
July 2, 2013

    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans first disbursed on or after July 1, 2006, and before July 1, 
2013, have fixed interest rates that are specified in section 455(b) of 
the HEA (20 U.S.C. 1087e(b)). Chart 3 shows the interest rates for 
these loans.

 Chart 3--Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After
                                        07/01/2006 and Before 07/01/2013
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                                                                       First           First
               Loan type                      Borrower type       disbursed  on/     disbursed     Interest rate
                                                                       after          before            (%)
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Subsidized............................  Undergraduate students..      07/01/2011      07/01/2013            3.40
Subsidized............................  Undergraduate students..      07/01/2010      07/01/2011            4.50
Subsidized............................  Undergraduate students..      07/01/2009      07/01/2010            5.60
Subsidized............................  Undergraduate students..      07/01/2008      07/01/2009            6.00
Subsidized............................  Undergraduate students..      07/01/2006      07/01/2008            6.80
Subsidized............................  Graduate or professional      07/01/2006  \2\ 07/01/2012            6.80
                                         students.
Unsubsidized..........................  Undergraduate and             07/01/2006      07/01/2013            6.80
                                         graduate or
                                         professional.
PLUS..................................  Graduate or professional      07/01/2006      07/01/2013            7.90
                                         students and parents of
                                         dependent undergraduate
                                         students.
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\2\ Effective for loan periods beginning on or after July 1, 2012, graduate and professional students are no
  longer eligible to receive Direct Subsidized Loans.


[[Page 2419]]

Fixed-Rate Direct Consolidation Loans

    Section 455(b) of the HEA specifies that all Direct Consolidation 
Loans for which the application was received on or after February 1, 
1999, have a fixed interest rate that is equal to the weighted average 
of the interest rates on the loans consolidated, rounded to the nearest 
higher one-eighth of one percent. For Direct Consolidation Loans for 
which the application was received on or after February 1, 1999, and 
before July 1, 2013, the interest rate may not exceed 8.25 percent. 
However, under 455(b) of the HEA the 8.25 percent interest rate cap 
does not apply to Direct Consolidation Loans made based on applications 
received on or after July 1, 2013. Chart 4 shows the interest rates for 
fixed-rate Direct Consolidation Loans.

 Chart 4--Direct Consolidation Loans Made Based on Applications Received
                         on or After 02/01/1999
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                                                              Maximum
      Application received          Interest rate (%)      interest rate
                                                                (%)
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On/after 07/01/2013............  Weighted average of the            None
                                  interest rates on the
                                  loans consolidated,
                                  rounded to the nearest
                                  higher one-eighth of
                                  one percent.
On/after 02/01/1999 and before   (same as above)........            8.25
 07/01/2013.
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    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., Braille, large print, 
audiotape, or compact disc) by contacting the person listed under FOR 
FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
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    Program Authority:  20 U.S.C. 1087, et seq.

    Dated: January 9, 2020.
Mark A. Brown,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2020-00569 Filed 1-14-20; 8:45 am]
 BILLING CODE 4000-01-P