[Federal Register Volume 85, Number 154 (Monday, August 10, 2020)]
[Notices]
[Pages 48233-48236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17397]


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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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Catalog of Federal Domestic Assistance (CFDA) Number: 84.032.

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, 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: 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, 
2020, through June 30, 2021. 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 26, 2020, is 0.132 percent, rounded to 0.13 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, 2020, 
is 0.17 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

[[Page 48234]]

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, 2020, is 0.15 
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, 2020, through June 30, 2021. 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.

                         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              Add-on (%)                Maximum rate  Interest rate 07/01/20 through 06/
                                                     T-bill rate                                                 (%)               30/21 (%)
                                                        05/26/20
                                                             (%)
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Subsidized Stafford...........  First disbursed             0.13  1.70 (in-school,  2.30 (any other             8.25  1.83 (in-school,  2.43 (any other
Unsubsidized Stafford.........   on/after 07/01/                   grace,            status).                          grace,            status).
                                 98 and before                     deferment).                                         deferment).
                                 07/01/06.
--------------------------------------------------------------------------------------------------------------------------------------------------------
PLUS..........................  First disbursed             0.13                 3.10                           9.00                 3.23.
                                 on/after 07/01/
                                 98 and before
                                 07/01/06.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsidized Stafford...........  First disbursed             0.13  2.50 (in-school,  3.10 (any other             8.25  2.63 (in-school,  3.23 (any other
Unsubsidized Stafford.........   on/after 07/01/                   grace,            status).                          grace,            status).
                                 95 and before                     deferment).                                         deferment).
                                 07/01/98.
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Subsidized Stafford...........  First disbursed             0.13                 3.10                           8.25                 3.23.
Unsubsidized Stafford.........   on/after 07/01/
                                 94 and before
                                 07/01/95, for a
                                 period of
                                 enrollment that
                                 included or
                                 began on or
                                 after 07/01/94.
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Subsidized Stafford...........  First disbursed             0.13                 3.10                           9.00                 3.23.
Unsubsidized Stafford.........   on/after 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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[[Page 48235]]


                                    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                                      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 (%)
----------------------------------------------------------------------------------------------------------------
PLUS..........................  First disbursed             0.17            3.10            9.00            3.27
                                 on/after 07/01/
                                 94 and before
                                 07/01/98.
PLUS..........................  First disbursed             0.17            3.10           10.00            3.27
                                 on/after 10/01/
                                 92 and before
                                 07/01/94.
SLS...........................  First disbursed             0.17            3.10           11.00            3.27
                                 on/after 10/01/
                                 92, for a
                                 period of
                                 enrollment
                                 beginning
                                 before 07/01/94.
PLUS..........................  First disbursed             0.17            3.25           12.00            3.42
SLS...........................   before 10/01/92.
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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 rate      07/01/20
              Loan type                         Cohort            rate (later converted    rate 05/26/20    Add-on (%)          (%)       through 06/30/
                                                                  to variable rate) (%)         (%)                                           21 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsidized Stafford..................  First disbursed on or     8.00, increasing to                0.13            3.10           10.00            3.23
Unsubsidized Stafford................   after 07/23/92 and        10.00.
                                        before 07/01/94 (prior
                                        borrowers).
Subsidized Stafford..................  First disbursed on or     9.00...................            0.13            3.10            9.00            3.23
Unsubsidized Stafford................   after 07/23/92 and
                                        before 07/01/94 (prior
                                        borrowers).
Subsidized Stafford..................  First disbursed on or     8.00...................            0.13            3.10            8.00            3.23
Unsubsidized Stafford................   after 07/23/92 and
                                        before 07/01/94 (prior
                                        borrowers).
Subsidized Stafford..................  First disbursed on or     7.00...................            0.13            3.10            7.00            3.23
Unsubsidized Stafford................   after 07/23/92 and
                                        before 07/01/94 (prior
                                        borrowers).
Subsidized Stafford..................  First disbursed on or     8.00, increasing to                0.13            3.25           10.00            3.38
Unsubsidized Stafford................   after 07/23/92 and        10.00.
                                        before 10/01/92 (new
                                        borrowers).
Subsidized Stafford..................  First disbursed on or     8.00, increasing to                0.13            3.25           10.00            3.38
Unsubsidized Stafford................   after 07/01/88 and        10.00.
                                        before 07/23/92.
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                                                          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 05/26/20  91-day T-bills    Add-on (%)         Maximum rate (%)         07/01/20
                                                                     (%)        auctioned for                                             through 06/30/
                                                                                 the quarter                                                  21 (%)
                                                                                ending 06/30/
                                                                                   20 (%)
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Portion of loan that repaid loans     Application received on/           0.13             N/A            3.10  8.25.....................            3.23
 other than HEAL loans.                after 11/13/97 and
                                       before 10/01/98.

[[Page 48236]]

 
Portion of the loan that repaid HEAL  Application received on/            N/A            0.15            3.00  None.....................            3.15
 loans.                                after 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.
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document is the document published in the Federal Register. You may 
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    Program Authority: 20 U.S.C. 1071 et seq.

Mark A. Brown,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2020-17397 Filed 8-7-20; 8:45 am]
BILLING CODE 4000-01-P