[Federal Register Volume 85, Number 10 (Wednesday, January 15, 2020)]
[Notices]
[Pages 2415-2417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00570]



[[Page 2415]]

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DEPARTMENT OF EDUCATION


Annual Notice of Interest Rates for Variable-Rate 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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SUMMARY: The Chief Operating Officer for Federal Student Aid announces 
the interest rates for loans made under the Federal Family Education 
Loan (FFEL) Program that have variable interest rates. The rates 
announced in this notice are in effect for the period July 1, 2019, 
through June 30, 2020. Catalog of Federal Domestic Assistance (CFDA) 
Number: 84.032.

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: 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 FFEL Program, including Federal Subsidized and Unsubsidized 
Stafford Loans (Stafford Loans), Federal PLUS Loans (PLUS Loans), 
Federal Consolidation Loans (Consolidation Loans), and Federal 
Supplemental Loans for Students (SLS Loans). No new loans have been 
made under the FFEL Program since June 30, 2010.
    The FFEL Program includes loans with variable interest rates that 
change each year and loans with fixed interest rates that remain the 
same for the life of the loan. For loans with a variable interest rate, 
the specific interest rate formula that applies to a particular loan 
depends on the date of the first disbursement of the loan or, in the 
case of a Consolidation Loan, the date the application for the loan was 
received. If a loan has a variable interest rate, a new rate is 
determined annually and is in effect during the period from July 1 of 
one year through June 30 of the following year.
    This notice announces the interest rates for variable-rate FFEL 
Program loans that will be in effect during the period from July 1, 
2019, through June 30, 2020. Interest rates for fixed-rate FFEL Program 
loans may be found in a Federal Register notice published on September 
15, 2015 (80 FR 55342).
    For the majority of variable-rate FFEL Program loans, the annual 
interest rate is equal to the lesser of--
    (1) The bond equivalent rate of the 91-day Treasury bills auctioned 
at the final auction held before June 1 of each year, plus a statutory 
add-on percentage; or
    (2) A statutorily established maximum interest rate.
    The bond equivalent rate of the 91-day Treasury bills auctioned on 
May 28, 2019, is 2.362 percent, rounded to 2.36 percent.
    For PLUS Loans first disbursed before July 1, 1998, and for all SLS 
Loans, the annual interest rate is equal to the lesser of--
    (1) The weekly average of the one-year constant maturity Treasury 
yield, as published by the Board of Governors of the Federal Reserve 
System, for the last calendar week ending on or before June 26 of each 
year, plus a statutory add-on percentage; or
    (2) A statutorily established maximum interest rate.
    The weekly average of the one-year constant maturity Treasury 
yield, as published by the Board of Governors of the Federal Reserve 
System, for the last calendar week ending on or before June 26, 2019, 
is 1.98 percent.
    For Consolidation Loans that have a variable interest rate, the 
annual interest rate for the portion of a Consolidation Loan that 
repaid loans other than loans made under the Health Education 
Assistance Loans (HEAL) Program is equal to--
    (1) The bond equivalent rate of the 91-day Treasury bill auctioned 
at the final auction held before June 1 of each year, plus a statutory 
add-on percentage; or
    (2) A statutorily established maximum interest rate.
    If a Consolidation Loan (whether a variable-rate loan or a fixed-
rate loan) repaid loans made under the HEAL Program, the interest rate 
on the portion of the Consolidation Loan that repaid HEAL loans is a 
variable rate that is equal to the average of the bond equivalent rates 
of the 91-day Treasury bills auctioned for the quarter ending June 30, 
plus a statutory add-on percentage. For the portion of a Consolidation 
Loan that repaid HEAL loans, there is no maximum interest rate.
    The average of the bond equivalent rates of the 91-day Treasury 
bills auctioned for the quarter ending on June 30, 2019, is 2.37 
percent.
    The statutory add-on percentages and maximum interest rates vary 
depending on loan type and when the loan was first disbursed. In 
addition, the add-on percentage for certain Stafford Loans is different 
depending on whether the loan is in an in-school, grace, or deferment 
status, or in any other status. If the interest rate calculated in 
accordance with the applicable formula exceeds the statutory maximum 
interest rate, the statutory maximum rate applies.
    Charts 1 through 4 show the interest rate formulas that are used to 
determine the interest rates for all variable-rate FFEL Program loans 
and the interest rates that are in effect during the 12-month period 
from July 1, 2019, through June 30, 2020. Unless otherwise indicated, 
the cohorts shown in each chart include all borrowers, regardless of 
prior borrowing.
    Chart 1 shows the interest rates for loans with rates based on the 
91-day Treasury bill, with the exception of ``converted'' variable-rate 
Federal Stafford Loans and certain Federal Consolidation Loans.
    Chart 2 shows the interest rates for loans with rates based on the 
weekly average of the one-year constant maturity Treasury yield.
    Chart 3 shows the interest rates for ``converted'' variable-rate 
Federal Stafford Loans. These are loans that originally had varying 
fixed interest rates.
    Finally, Chart 4 shows the interest rates for variable-rate Federal 
Consolidation Loans, and for the portion of any Federal Consolidation 
Loan that repaid loans made under the HEAL Program.

[[Page 2416]]



                         Chart 1--Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, and Federal PLUS Loans
                                                      [Interest rate based on 91-day Treasury bill]
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Loan type                                Cohort...................     91-Day T-            Add-on              Maximum rate    Interest rate 07/01/19
                                                                            bill
                                                                     rate 05/28/              (%)                        (%)       through 06/30/20
                                                                              19
                                                                             (%)                                                          (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsidized Stafford, Unsubsidized        First disbursed on/after           2.36        * 1.70      [dagger]            8.25        * 4.06      [dagger]
 Stafford.                                07/01/98 and before 07/                                       2.30                                        4.66
                                          01/06.
                                                                   -------------------------------------------------------------------------------------
PLUS...................................  First disbursed on/after           2.36             3.10                       9.00             5.46
                                          07/01/98 and before 07/
                                          01/06.
                                                                   -------------------------------------------------------------------------------------
Subsidized Stafford, Unsubsidized        First disbursed on/after           2.36        * 2.50      [dagger]            8.25        * 4.86      [dagger]
 Stafford.                                07/01/95 and before 07/                                       3.10                                        5.46
                                          01/98.
                                                                   -------------------------------------------------------------------------------------
Subsidized Stafford, Unsubsidized        First disbursed on/after           2.36             3.10                       8.25             5.46
 Stafford.                                07/01/94 and before 07/
                                          01/95, for a period of
                                          enrollment that included
                                          or began on or after 07/
                                          01/94.
                                                                   -------------------------------------------------------------------------------------
Subsidized Stafford, Unsubsidized        First disbursed on/after           2.36             3.10                       9.00             5.46
 Stafford.                                10/01/92 and before 07/
                                          01/94; and First
                                          disbursed on/after 07/01/
                                          94, for a period of
                                          enrollment ending before
                                          07/01/94 (new borrowers).
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* (in-school, grace, deferment).
[dagger] (any other status).


                                                        Chart 2--Federal PLUS Loans and SLS Loans
                                  [Interest rate based on weekly average of one-year constant maturity Treasury yield]
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                                                                                    Weekly average of
                                                                                     1-year constant
                                                                                    maturity treasury
                                                                                      yield for last                    Maximum rate   Interest rate 07/
                   Loan type                                   Cohort                 calendar week      Add-on (%)          (%)       01/19 through 06/
                                                                                       ending on or                                        30/20 (%)
                                                                                     before 06/26/19
                                                                                           (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLUS...........................................  First disbursed on/after 07/01/94               1.98            3.10            9.00               5.08
                                                  and before 07/01/98.
PLUS...........................................  First disbursed on/after 10/01/92               1.98            3.10           10.00               5.08
                                                  and before 07/01/94.
SLS............................................  First disbursed on/after 10/01/                 1.98            3.10           11.00               5.08
                                                  92,for a period of enrollment
                                                  beginning before 07/01/94.
PLUS SLS.......................................  First disbursed before 10/01/92..               1.98            3.25           12.00               5.23
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                                 Chart 3--``Converted'' Variable-Rate Subsidized and Unsubsidized Federal Stafford Loans
                                                      [Interest rate based on 91-day Treasury bill]
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                                                                                                                                           Interest rate
                                                                      Original fixed  interest   91-Day T-bill                 Maximum       07/01/19
               Loan type                           Cohort             rate (later converted to   rate 05/28/19   Add-on (%)    rate (%)   through  06/30/
                                                                         variable rate) (%)           (%)                                     20 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsidized Stafford, Unsubsidized        First disbursed on or       8.00, increasing to 10.00            2.36         3.10        10.00            5.46
 Stafford.                                after 07/23/92 and before
                                          07/01/94 (prior
                                          borrowers).
Subsidized Stafford, Unsubsidized        First disbursed on or       9.00.....................            2.36         3.10         9.00            5.46
 Stafford.                                after 07/23/92 and before
                                          07/01/94 (prior
                                          borrowers).
Subsidized Stafford, Unsubsidized        First disbursed on or       8.00.....................            2.36         3.10         8.00            5.46
 Stafford.                                after 07/23/92 and before
                                          07/01/94 (prior
                                          borrowers).
Subsidized Stafford, Unsubsidized        First disbursed on or       7.00.....................            2.36         3.10         7.00            5.46
 Stafford.                                after 07/23/92 and before
                                          07/01/94 (prior
                                          borrowers).
Subsidized Stafford, Unsubsidized        First disbursed on or       8.00, increasing to 10.00            2.36         3.25        10.00            5.61
 Stafford.                                after 07/23/92 and before
                                          10/01/92 (new borrowers).
Subsidized Stafford, Unsubsidized        First disbursed on or       8.00, increasing to 10.00            2.36         3.25        10.00            5.61
 Stafford.                                after 07/01/88 and before
                                          07/23/92.
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[[Page 2417]]


                                                          Chart 4--Federal Consolidation Loans
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                                                                                                Average of the
                                                                                                     bond
                                                                                                  equivalent
                                                                                 91-Day T-bill   rates of the                              Interest rate
         Consolidation loan component                       Cohort               rate 05/28/19  91-day T-bills   Add-on (%)    Maximum       07/01/19
                                                                                      (%)        auctioned for                 rate (%)   through  06/30/
                                                                                                  the quarter                                 20 (%)
                                                                                                 ending 06/30/
                                                                                                    19 (%)
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Portion of loan that repaid loans other than   Application received on/after              2.36             N/A         3.10         8.25            5.46
 HEAL loans.                                    11/13/97 and before 10/01/98.
Portion of the loan that repaid HEAL loans...  Application received on/after               N/A            2.37         3.00         None            5.37
                                                11/13/97.
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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) on request to the contact 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 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. 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 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. 1071 et seq.

    Dated: January 9, 2020.
Mark A. Brown,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2020-00570 Filed 1-14-20; 8:45 am]
 BILLING CODE 4000-01-P