[Federal Register Volume 85, Number 154 (Monday, August 10, 2020)]
[Notices]
[Pages 48231-48233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17396]
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DEPARTMENT OF EDUCATION
Annual Notice of Interest Rates for Variable-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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Catalog of Federal Domestic Assistance (CFDA) Number: 84.268.
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
Loan) with first disbursement dates before July 1, 2006, and for
Federal Direct Consolidation Loans (Direct Consolidation Loans) for
which the application was received before February 1, 1999. The rates
announced in this notice are in effect for the period July 1, 2020,
through June 30, 2021.
FOR FURTHER INFORMATION CONTACT: Travis Sturlaugson, U.S. Department of
Education, 830 First Street NE, 11th Floor, Washington, DC 20202.
Telephone: (202) 377-4174. 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 before July 1, 2006, and Direct
Consolidation Loans for which the application was received before
February 1, 1999, have variable interest rates. For these loans, 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.
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.
This notice announces the interest rates for variable-rate Direct
Loans that will apply during the period from July 1, 2020, through June
30, 2021. Interest rate information for fixed-rate Direct Loans is
announced in a separate notice published in the Federal Register.
Interest rates for variable-rate Direct Loans are determined in
accordance with formulas specified in section 455(b) of the Higher
Education Act of 1965, as amended (HEA) (20 U.S.C. 1087e(b)). The
formulas vary depending on loan type and when the loan was first
disbursed or, for certain Direct Consolidation Loans, when the
application for the loan was received. The HEA specifies a maximum
interest rate for these loan types. If the interest rate formula
results in a rate that exceeds the statutory maximum rate, the rate is
the statutory maximum rate.
Variable-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and
Direct PLUS Loans
For Direct Subsidized Loans and Direct Unsubsidized Loans with
first disbursement dates before July 1, 2006, and for Direct PLUS Loans
with first disbursement dates on or after July 1, 1998, and before July
1, 2006, the interest rate is equal to the lesser of--
(1) The bond equivalent rate of 91-day Treasury bills auctioned at
the final auction held before the June 1 immediately preceding the 12-
month period to which the interest rate applies, plus a statutory add-
on percentage; or
(2) 8.25 percent (for Direct Subsidized Loans and Direct
Unsubsidized Loans) or 9.00 percent (for Direct PLUS Loans).
For Direct Subsidized Loans and Direct Unsubsidized Loans with
first disbursement dates on or after July 1, 1995, and before July 1,
2006, the statutory add-on percentage varies depending on whether the
loan is in an in-school, grace, or deferment status, or in any other
status. For all other loans, the statutory add-on percentage is the
same during any status.
The bond equivalent rate of 91-day Treasury bills auctioned on May
26, 2020, is 0.132 percent, rounded to 0.13 percent.
For Direct PLUS Loans with first disbursement dates before July 1,
1998, the interest rate is equal to the lesser of--
(1) The weekly average 1-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 the June 26 preceding the
12-month period to which the interest rate applies, plus a statutory
add-on percentage; or
(2) 9.00 percent.
The weekly average of the one-year constant maturity Treasury
yield, as published by the Board of Governors of
[[Page 48232]]
the Federal Reserve System, for the last calendar week ending on or
before June 26, 2020, is 0.17 percent.
Variable-Rate Direct Consolidation Loans
A Direct Consolidation Loan may have up to three components,
depending on the types of loans that were repaid by the consolidation
loan and when the application for the consolidation loan was received.
The three components are called Direct Subsidized Consolidation Loans,
Direct Unsubsidized Consolidation Loans, and (only for Direct
Consolidation Loans made based on applications received before July 1,
2006) Direct PLUS Consolidation Loans. In most cases the interest rates
for variable-rate Direct Subsidized Consolidation Loans, Direct
Unsubsidized Consolidation Loans, and Direct PLUS Consolidation Loans
are determined in accordance with the same formulas that apply to
Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS
Loans, respectively.
Interest Rate Charts
Charts 1 and 2 show the interest rate formulas used to determine
the interest rates for all variable-rate Direct Loans and the rates
that are in effect during the 12-month period from July 1, 2020,
through June 30, 2021.
Chart 1 shows the interest rates for loans with rates based on the
91-day Treasury bill rate. Chart 2 shows the interest rates for loans
with rates based on the weekly average of the one-year constant
maturity Treasury yield.
Chart 1--Direct Subsidized Loans, Direct Unsubsidized Loans, Direct Subsidized Consolidation Loans, Direct Unsubsidized Consolidation Loans, Direct PLUS
Loans, and Direct Plus Consolidation Loans
[Interest rates based on 91-day Treasury bill]
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Loan type Cohort.......... 91-day Add-on (%) Maximum rate Interest rate 07/01/20 through 06/
T-bill rate (%) 30/21 (%)
05/26/20
(%)
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Subsidized, Unsubsidized...... First disbursed 0.13 1.70 (in-school, 2.30 (any other 8.25 1.83 (in-school, 2.43 (any other
on/after 07/01/ grace, status). grace, status)
98 and before deferment). deferment).
07/01/06.
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Subsidized Consolidation, First disbursed .............. ................ ................ .............. ................ ................
Unsubsidized Consolidation. on/after 07/01/
98 and before
10/01/98; or
Application
received before
10/01/98 and
first disbursed
on/after 10/01/
98.
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PLUS.......................... First disbursed 0.13 3.10 9.00 3.23
on/after 07/01/
98 and before
07/01/06.
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PLUS Consolidation............ First disbursed .............. ................ ................ .............. ................ ................
on/after 07/01/
1998 and before
10/01/1998; or
Application
received before
10/01/98 and
first disbursed
on/after 10/01/
98.
Subsidized, Unsubsidized, First disbursed 0.13 2.50 (in-school, 3.10 (any other 8.25 2.63 (in-school, 3.23 (any other
Subsidized Consolidation, on/after 07/01/ grace, status). grace, status)
Unsubsidized Consolidation. 95 and before deferment). deferment).
07/01/98.
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Subsidized, Unsubsidized, First disbursed 0.13 .10 8.25 3.23
Subsidized Consolidation, before 07/01/95.
Unsubsidized Consolidation.
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Subsidized Consolidation, Application 0.13 2.30 8.25 2.43
Unsubsidized Consolidation, received on/
PLUS Consolidation. after 10/01/98
and before 02/
01/99.
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[[Page 48233]]
Chart 2--Direct PLUS Loans and Direct PLUS Consolidation Loans
[Interest rates based on weekly average of one-year constant maturity treasury yield]
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Weekly average
of 1-year
constant
maturity Interest rate
Treasury yield Maximum rate 07/01/20
Loan type Cohort for last Add-on (%) (%) through 06/30/
calendar week 21 (%)
ending on or
before 06/26/
20 (%)
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PLUS, PLUS Consolidation...... First disbursed 0.17 3.10 9.00 3.27
before 07/01/98.
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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
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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.
Mark A. Brown,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2020-17396 Filed 8-7-20; 8:45 am]
BILLING CODE 4000-01-P