[Federal Register: October 25, 1999 (Volume 64, Number 205)]
[Notices]
[Page 57523-57526]
>From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc99-123]

[[Page 57523]]

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Part III

Department of Education

_______________________________________________________________________

Office of Student Financial Assistance; William D. Ford Federal Direct
Loan Program and Federal Family Education Loan Program; Notice

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DEPARTMENT OF EDUCATION


Office of Student Financial Assistance; William D. Ford Federal
Direct Loan Program and Federal Family Education Loan Program

AGENCY: Department of Education.

ACTION: Notice of interest rates for the William D. Ford Federal Direct
Loan Program and the Federal Family Education Loan Program for the
period July 1, 1999, through June 30, 2000.

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SUMMARY: The Chief Operating Officer for the Office of Student
Financial Assistance announces the interest rates for variable-rate
loans made under the William D. Ford Federal Direct Loan (Direct Loan)
Program and the Federal Family Education Loan (FFEL) Program for the
period July 1, 1999, through June 30, 2000.

FOR FURTHER INFORMATION CONTACT: For the FFEL Program: Brian Smith,
Program Specialist. For the Direct Loan Program: Barbara F. Grayson,
Program Specialist. Mailing address: Program Development Division,
Office of Student Financial Assistance, U.S. Department of Education,
Room 3045, ROB-3, 400 Maryland Avenue, SW, Washington, DC 20202-5345.
Telephone: (202) 708-8242. Individuals who use a telecommunications
device for the deaf (TDD) may call the Federal Information Relay
Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an
alternate format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact persons listed in the preceding
paragraph.

SUPPLEMENTARY INFORMATION: General--The Higher Education Act of 1965,
as amended, (HEA) provides that variable interest rates apply to parent
and student loans made under the Direct Loan and FFEL programs.
Variable interest rates also apply to Direct Consolidation Loans for
which the application was received before February 1, 1999, and to FFEL
Consolidation loans for which the application was received on or after
November 13, 1997, and before October 1, 1998. All other Consolidation
loans have fixed interest rates based on the weighted average of the
loans being consolidated.
    Except for Consolidation loans, the formulas for determining the
interest rates charged to borrowers for Direct Loan Program loans and
FFEL Program loans are established by section 455(b) of the HEA (20
U.S.C. 1087e) for Direct Loan Program loans and section 427A of the HEA
(20 U.S.C. 1077a) for FFEL Program loans. These interest rate formulas
do not apply to fixed-rate FFEL loans made before October 10, 1992,
unless the fixed-rate loan has been converted to a variable-rate loan.
    Consolidation loan interest rate formulas are established in 34 CFR
685.215(g) and 34 CFR 685.202(a) for Direct Consolidation Loans for
which the application was received before October 1, 1998; section
455(b)(6)(D) and (E) of the HEA (20 U.S.C 1087e) for Direct
Consolidation Loans for which the application is received on or after
October 1, 1998, but before July 1, 2003; and section 428C of the HEA
(20 U.S.C. 1078-3) for FFEL Consolidation loans.
    As noted below, interest rate caps apply to most Direct Loan and
FFEL Program loans.
    The interest rates on variable-rate loans are determined annually
and apply for each 12-month period beginning July 1 and ending June 30.
For parent loans first disbursed on or after July 1, 1998, and all
student loans, interest rates are based on the bond equivalent rate of
91-day Treasury bills auctioned at the final auction held before June
1st of each year. For parent loans first disbursed before July 1, 1998,
interest rates are based on the bond equivalent rate of 52-week
Treasury bills auctioned at the final auction held before June 1st of
each year.
    The bond equivalent rate of the 91-day Treasury bills auctioned on
May 24, 1999, (the last auction prior to June 1, 1999) is 4.621
percent, which rounds to 4.62 percent.
    The bond equivalent rate of the 52-week Treasury bills auctioned on
May 25, 1999, is 4.879 percent, which rounds to 4.88 percent.

William D. Ford Federal Direct Loan Program

Interest Rates for Direct Subsidized and Direct Unsubsidized Loans

    1. Direct Subsidized and Direct Unsubsidized Loans first disbursed
prior to July 1, 1995--the interest rate may not exceed 8.25 percent:
The interest rate for the period July 1, 1999, through June 30, 2000,
is 7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    2. Direct Subsidized and Direct Unsubsidized Loans first disbursed
on or after July 1, 1995, and before July 1, 1998--the interest rate
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.12 percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1
percent equals 7.72 percent).
    3. Direct Subsidized and Direct Unsubsidized Loans first disbursed
on or after July 1, 1998, and before July 1, 2003--the interest rate
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The
interest rate for the period July 1, 1999, through June 30, 2000, is
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3
percent equals 6.92 percent).

Interest Rates for Direct Subsidized and Direct Unsubsidized
Consolidation Loans

    1. Direct Subsidized and Direct Unsubsidized Consolidation Loans
first disbursed before July 1, 1998--the interest rate may not exceed
8.25 percent:
    (a) During the in-school, grace, and deferment periods: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.12 percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1
percent equals 7.72 percent).
    2. Direct Subsidized and Direct Unsubsidized Consolidation Loans
for which the application was received before October 1, 1998, and the
loan was first disbursed on or after July 1, 1998--the interest rate
may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The
interest rate for the period July 1, 1999, through June 30, 2000, is
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3
percent equals 6.92 percent).
    3. Direct Subsidized and Direct Unsubsidized Consolidation loans
for which the application was received on or after October 1, 1998, and
before February 1, 1999--the interest rate may not exceed 8.25 percent:
The interest rate for the period July 1, 1999, through June 30, 2000,
is 6.92 percent (4.62 percent plus 2.3 percent equals 6.92 percent).
    4. Direct Subsidized and Direct Unsubsidized Consolidation loans
for which the application is received on or after February 1, 1999, and
before July 1, 2003--the interest rate may not

[[Page 57525]]

exceed 8.25 percent: The interest rate is the weighted average of the
interest rates on the loans consolidated, rounded to the nearest higher
one-eighth of one percent.

Interest Rates for Direct PLUS Loans

    1. Direct PLUS loans first disbursed before July 1, 1998--the
interest rate may not exceed 9 percent: The interest rate for the
period July 1, 1999, through June 30, 2000, is 7.98 percent (4.88
percent plus 3.1 percent equals 7.98 percent).
    2. Direct PLUS loans first disbursed on or after July 1, 1998, and
before July 1, 2003--the interest rate may not exceed 9 percent: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).

Interest Rates for Direct PLUS Consolidation Loans

    1. Direct PLUS Consolidation loans first disbursed before July 1,
1998--the interest rate may not exceed 9 percent: The interest rate for
the period July 1, 1999, through June 30, 2000, is 7.98 percent (4.88
percent plus 3.1 percent equals 7.98 percent).
    2. Direct PLUS Consolidation loans for which the application was
received before October 1, 1998, and the loan was first disbursed on or
after July 1, 1998--the interest rate may not exceed 9 percent: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    3. Direct PLUS Consolidation loans for which the application was
received on or after October 1, 1998, and before February 1, 1999--the
interest rate may not exceed 8.25 percent: The interest rate for the
period July 1, 1999, through June 30, 2000, is 6.92 percent (4.62
percent plus 2.3 percent equals 6.92 percent).
    4. Direct PLUS Consolidation loans for which the application is
received on or after February 1, 1999, and before July 1, 2003--the
interest rate may not exceed 8.25 percent: The interest rate is the
weighted average of the interest rates on the loans consolidated,
rounded to the nearest higher one-eighth of one percent.

Federal Family Education Loan Program

Interest Rates for ``Converted'' Variable-rate FFEL Stafford Loans

    1. Eight/ten percent loans that were subject to the provisions of
section 427A(i)(1) of the HEA and that have been converted to a
variable interest rate--the interest rate may not exceed 10 percent:
The interest rate for the period July 1, 1999, through June 30, 2000,
is 7.87 percent (4.62 percent plus 3.25 percent equals 7.87 percent).
    2. Seven percent, eight percent, nine percent and eight/ten percent
loans that were subject to the provisions of section 427A(i)(3) of the
HEA and that have been converted to a variable interest rate--the
interest rate may not exceed seven percent, eight percent, nine
percent, or ten percent, respectively: The interest rate for the period
July 1, 1999, through June 30, 2000, is 7 percent for 7 percent loans
and 7.72 percent for 8 percent, 9 percent, and 10 percent loans (4.62
percent plus 3.1 percent equals 7.72 percent, which exceeds the cap for
7 percent loans).

Interest Rates for Variable-rate FFEL Stafford Loans

    1. FFEL Stafford loans made to ``new'' borrowers for which the
first disbursement was made (a) on or after October 1, 1992, but before
July 1, 1994, or (b) on or after July 1, 1994, for a period of
enrollment ending before July 1, 1994 (i.e. a late disbursement)--the
interest rate may not exceed 9 percent: The interest rate for the
period July 1, 1999, through June 30, 2000, is 7.72 percent (4.62
percent plus 3.1 percent equals 7.72 percent).
    2. FFEL Stafford loans made to all borrowers, regardless of prior
borrowing, for periods of enrollment that include or begin on or after
July 1, 1994, for which the first disbursement is made on or after July
1, 1994, but before July 1, 1995--the interest rate may not exceed 8.25
percent: The interest rate for the period July 1, 1999, through June
30, 2000, is 7.72 percent (4.62 percent plus 3.1 percent equals 7.72
percent).
    3. FFEL Stafford loans made to all borrowers, regardless of prior
borrowing, on or after July 1, 1995, but before July 1, 1998--the
interest rate may not exceed 8.25 percent:
    (a) During the in-school, grace, or deferment period: The interest
rate for the period July 1, 1999, through June 30, 2000, is 7.12
percent (4.62 percent plus 2.5 percent equals 7.12 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 7.72 percent (4.62 percent plus 3.1
percent equals 7.72 percent).
    4. FFEL Stafford loans, first disbursed on or after July 1, 1998,
but before July 1, 2003--the interest rate may not exceed 8.25 percent:
    (a) During the in-school, grace, and deferment periods: The
interest rate for the period July 1, 1999, through June 30, 2000, is
6.32 percent (4.62 percent plus 1.7 percent equals 6.32 percent); and
    (b) During all other periods: The interest rate for the period July
1, 1999, through June 30, 2000, is 6.92 percent (4.62 percent plus 2.3
percent equals 6.92 percent).

Interest Rates for FFEL PLUS and FFEL Supplemental Loans for Students
(SLS) Loans

    1. Variable-rate FFEL PLUS and FFEL SLS loans first disbursed
before October 1, 1992--the interest rate may not exceed 12 percent:
The interest rate for the period July 1, 1999, through June 30, 2000,
is 8.13 percent (4.88 percent plus 3.25 percent equals 8.13 percent).
    2. FFEL SLS loans first disbursed on or after October 1, 1992, for
a period of enrollment beginning before July 1, 1994--the interest rate
may not exceed 11 percent: The interest rate for the period July 1,
1999, through June 30, 2000, is 7.98 percent (4.88 percent plus 3.1
percent equals 7.98 percent).
    3. FFEL PLUS loans first disbursed on or after October 1, 1992, but
before July 1, 1994--the interest rate may not exceed 10 percent: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.98 percent (4.88 percent plus 3.1 percent equals 7.98 percent).
    4. FFEL PLUS loans first disbursed on or after July 1, 1994, but
prior to July 1, 1998--the interest rate may not exceed 9 percent: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.98 percent (4.88 percent plus 3.1 percent equals 7.98 percent).
    5. FFEL PLUS loans first disbursed on or after July 1, 1998, and
before July 1, 2003--the interest rate may not exceed 9 percent: The
interest rate for the period July 1, 1999, through June 30, 2000, is
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).

Interest Rates for FFEL Consolidation Loans

    1. FFEL Consolidation loans made before July 1, 1994--the interest
rate may not be less than 9 percent: The interest rate is the weighted
average of the interest rates on the loans consolidated, rounded to the
nearest whole percent.
    2. FFEL Consolidation loans made on or after July 1, 1994, for
which the consolidation loan application was received by the lender
before November 13, 1997: The interest rate is the weighted average of
the interest rates on the loans consolidated, rounded upward to the
nearest whole percent.
    3. FFEL Consolidation loans for which the consolidation loan
application was received by the lender on or after November 13, 1997,
and before October 1, 1998--the interest rate may not exceed 8.25
percent: The

[[Page 57526]]

interest rate for the period July 1, 1999, through June 30, 2000, is
7.72 percent (4.62 percent plus 3.1 percent equals 7.72 percent).
    4. FFEL Consolidation loans for which the consolidation loan
application was received by the lender on or after October 1, 1998, and
before July 1, 2003--the interest rate may not exceed 8.25 percent: The
interest rate is the weighted average of the interest rates on the
loans being consolidated, rounded to the nearest higher one-eighth of
one percent.
    5. If a portion of a Consolidation loan is attributable to a loan
made under subpart I of part A of title VII of the Public Health
Service Act, the maximum interest rate for that portion of a
Consolidation loan is determined annually, for each 12-month period
beginning on July 1 and ending on June 30. The interest rate equals the
average of the bond equivalent rates of the 91-day Treasury bills
auctioned for the quarter ending prior to July 1, plus 3 percent. For
the quarter ending prior to July 1, 1999, the average 91-day Treasury
bill rate was 4.60 percent. The maximum interest rate for the period
July 1, 1999, through June 30, 2000, is 7.60 percent (4.60 percent plus
3.0 percent equals 7.60 percent).

Electronic Access to This Document

    You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at the following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/fedreg.html

    To use the PDF you must have the Adobe Acrobat Reader Program with
Search, which is available free at either of the previous sites. If you
have questions about using the PDF, call the U.S. Government Printing
Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC,
area at (202) 512-1530.

    Note: 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 on GPO Access at: http://
www.access.gpo.gov/nara/index.html

    Program Authority: 20 U.S.C. 1077a and 20 U.S.C. 1087e.

    Dated: October 19, 1999.
Greg Woods,
Chief Operating Officer, Office of Student Financial Assistance.
[FR Doc. 99-27729 Filed 10-22-99; 8:45 am]
BILLING CODE 4000-01-U