[Federal Register: July 6, 1999 (Volume 64, Number 128)]
[Notices]
[Page 36541-36546]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy99-138]
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Part VI
Department of Education
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William D. Ford Federal District Loan Program; Notice
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DEPARTMENT OF EDUCATION
William D. Ford Federal Direct Loan Program
AGENCY: Department of Education.
ACTION: Notice of the annual updates to the income contingent repayment
plan formula.
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SUMMARY: The Secretary announces the annual updates to the income
percentage factors for 1999. Under the William D. Ford Federal Direct
Loan (Direct Loan) Program, borrowers may choose to repay their student
loans under the income contingent repayment plan, which bases the
repayment amount on the borrower's income and family size, loan amount,
and interest rate. Each year, the formula for calculating a borrower's
payment is adjusted to reflect changes due to inflation. This Notice
contains updated sample income contingent repayment amounts for single
and married or head-of-household borrowers at various income and debt
levels. These updates are effective from July 1, 2000 to June 30, 2001.
FOR FURTHER INFORMATION CONTACT: Donald Watson, U.S. Department of
Education, Room 3045, ROB-3, 400 Maryland Avenue, SW, Washington, DC
20202-5400. Telephone: (202) 708-8242. If you use a telecommunications
device for the deaf (TDD) you 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 person listed in the preceding
paragraph.
SUPPLEMENTARY INFORMATION: Direct Loan Program borrowers may choose to
repay their Direct Loans under the income contingent repayment plan.
The attachment to this Notice provides updates to four sources of
information used to calculate the borrower's monthly payment amount:
examples of how the calculation of the monthly ICR repayment amount is
performed, the income percentage factors, the constant multiplier
chart, and charts showing sample repayment amounts.
We have updated the income percentage factors to reflect changes
based on inflation. We have revised the income percentage factor table
by changing the dollar amounts of the incomes shown by a percentage
equal to the estimated percentage change in the Consumer Price Index
for all Urban Consumers from December 1998 to December 1999. Further,
we provide examples of monthly repayment amount calculations and two
charts. the charts show sample repayment amounts for single, and
married or head of household borrowers at various income and debt based
on the updated income percentage factors.
The updated income percentage factors, at any given income, may
cause a borrower's payments to be slightly lower than they were in
prior years. This updated amount more accurately reflects the impact of
inflation on a borrower's current ability to repay.
Electronic Access to This Document
You may review 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/news.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, D.C.,
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
(Catalog of Federal Domestic Assistance Number 84.268 William D.
Ford Federal Direct Loan Program)
(Program Authority: 20 U.S.C. 1087 et seq.)
Dated: June 30, 1999.
Greg Woods,
Chief, Operating Officer.
Attachment--Examples of the Calculations of Monthly Repayment
Amounts
Example 1. This example assumes you are a single borrower with
$15,000 in Direct Loans, the interest rate being charged is 8.25
percent, and you have an adjusted gross income (AGI) of $23,912.
Step 1: Determine your annual payments based on what you would
pay over 12 years using standard amortization. To do this, multiply
your principal balance by the constant multiplier for 8.25 percent
interest (0.1315449). The constant multiplier is a factor used to
calculate amortized payments at a given interest rate over a fixed
period of time. (See the constant multiplier chart below to
determine the constant multiplier you should use for the interest
rate on your loan. If your exact interest rate is not listed, use
the next highest for estimation purposes.)
* 0.1315449 x $15,000 = $1,973.17
Step 2: Multiply the result by the income percentage factor
shown in the income percentage factor table that corresponds to your
income (if your income is not listed, you can calculate the
applicable income percentage factor by following the instructions
under the interpolation heading below):
* 80.33 x $1,973.18 100 = $1,585.06
Step 3: Determine 20 percent of your discretionary income.
Because you are a single borrower, subtract the poverty level for a
family of one, as published in the Federal Register on March 18,
1999 (64 FR 13428), from your income and multiply the result by 20%:
* $23,912 - $8,240 = $15,672
* $15,672 x 0.20 = $3,134.40
Step 4: Compare the amount from step 2 with the amount from step
3. The lower of the two will be your annual payment amount. In this
example, you will be paying the amount calculated under step 2. To
determine your monthly repayment amount, divide the annual amount by
12.
* $1,585.06 12 = $132.09
Example 2. In this example, you are married. You and your spouse
have a combined AGI of $30,035 and are repaying your loans jointly
under the income contingent repayment plan. You have no children.
You have a Direct Loan balance of $10,000, and your spouse has a
Direct Loan balance of $15,000. Your interest rate is 8.25 percent.
Step 1: Add you and your spouse's Direct Loan balances together
to determine your aggregate loan balance.
* $10,000 + $15,000 = $25,000
Step 2: Determine the annual payment based on what you would pay
over 12 years using standard amortization. To do this, multiply your
aggregate principal balance by the constant multiplier for 8.25
percent interest (0.1315452). (See the constant multiplier chart to
determine the constant multiplier you should use for the interest
rate on your loan. If your exact interest rate is not listed, choose
the next highest rate for estimation purposes.)
* 0.1315449 x $25,000 = $3,288.62
Step 3: Multiply the result by the income percentage factor
shown in the income percentage factor table that corresponds to you
and your spouse's income (if you and your spouse's aggregate income
is not listed, you can calculate the applicable income percentage
factor by following the instructions under the interpolation heading
below):
* 87.61 x $3,288.63 100 = $2,881.17
Step 4: Determine 20 percent of your aggregate income. To do
this, subtract the poverty level for a family of 2, as published in
the Federal Register on March 18, 1999 (64 FR 13428), from your
aggregate income and multiply the result by 20 percent:
* $30,035 - $11,060 = $18,975
* $18,975 x 0.20 = $3,795
Step 5: Compare the amount from step 3 with the amount from step
4. The lower of the two will be your annual payment amount. You and
your spouse's will be paying the amount calculated under step 3.
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To determine your monthly repayment amount, divide the annual amount
by 12.
* $2,881.17 12 = $240.10
Interpolation: If your income does not appear on the income
percentage factor table, you will have to calculate the income
percentage factor through interpolation. For example, assume you are
single and your income is $30,000.
Step 1: Find the interval between the closest income listed that
is less than your income of $30,000 and the closest income listed
that is greater than your income of $30,000.
Step 2: Subtract these numbers (for this discussion, we will
call the result the ``income interval''):
* $30,035 - $23,912 = $6,123
Step 3: Find the interval between the two income percentage
factors that are given for these incomes (for this discussion, we
will call the result, the ``income percentage factor interval''):
* 88.77% - 80.33% = 8.44%
Step 4: Subtract the income shown on the chart that is
immediately less than $30,000 from your income of $30,000:
* $30,000 - $23,912 = $6,088
Step 5: Divide the result by the number representing the income
interval:
* $6,088 $6,123 = 0.9943
Step 6: Multiply the result by the income percentage factor
interval:
* 0.9943 x 8.44% = 8.39%
Step 7: Add the result to the lower income percentage factor
used to calculate the income percentage factor interval for $30,000
in income:
* 8.39% + 80.33% = 88.72%
The result is the income percentage factor that will be Used to
calculate the monthly repayment amount under the Income contingent
repayment plan.
BILLING CODE 40001-01-P
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[FR Doc. 99-17084 Filed 7-2-99; 8:45 am]
BILLING CODE 4000-01-C