FR Doc 05-22366
[Federal Register: November 9, 2005 (Volume 70, Number 216)]
[Notices]
[Page 67999-68002]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no05-53]
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DEPARTMENT OF EDUCATION
William D. Ford Federal Direct Loan Program
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice of interest rates for the William D. Ford Federal Direct
Loan Program for the period July 1, 2005 through June 30, 2006.
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SUMMARY: The Chief Operating Officer for Federal Student Aid announces
the interest rates for loans made under the William D. Ford Federal
Direct Loan (Direct Loan) Program for the period July 1, 2005 through
June 30, 2006.
FOR FURTHER INFORMATION CONTACT: Don Watson, U.S. Department of
Education, room 114I2, UCP, 400 Maryland Avenue, SW., Washington, DC
20202-5400. Telephone: (202) 377-4008.
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Relay Service (FRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: Section 455(b) of the Higher Education Act
of 1965, as amended (HEA), 20 U.S.C. 1087e(b), provides formulas for
determining the interest rates charged to borrowers for loans made
under the Direct Loan Program including Federal Direct Stafford Loans
(Direct Subsidized Loans), Federal Direct Unsubsidized Stafford Loans
(Direct Unsubsidized Loans), Federal Direct PLUS Loans (Direct PLUS
Loans), and Federal Direct Consolidation Loans (Direct Consolidation
Loans).
The Direct Loan Program includes loans with variable interest rates
and loans with fixed interest rates. Most loans made under the Direct
Loan Program have variable interest rates that change each year. The
variable interest rate formula that applies to a particular loan
depends on the date of the first disbursement of the loan. The variable
rates are determined annually and are effective for each 12-month
period beginning July 1 of one year and ending June 30 of the following
year.
In the case of some Direct Consolidation Loans, the interest rate
is determined by the date on which the Direct Consolidation Loan
application was received. Direct Consolidation Loans for which the
application was received on or after February 1, 1999 have a fixed
interest rate based on the weighted average of the loans that are
consolidated, rounded up to the nearest higher 1/8 of one percent.
Pursuant to section 455(b) of the HEA, 20 U.S.C. Sec. 1087e(b),
the Direct Loan interest rate formulas use the bond equivalent rates of
the 91-day Treasury bills at the final auction held before June 1 of
each year plus a statutory add-on percentage to determine the variable
interest rate for all Direct Subsidized Loans and Direct Unsubsidized
Loans; Direct Consolidation Loans for which the application was
received on or after July 1, 1998 and before February 1, 1999; and
Direct PLUS Loans disbursed on or after July 1, 1998.
The bond equivalent rate of the 91-day Treasury bills auctioned on
May 31, 2005, which is used to calculate the interest rates on these
loans, is 2.998 percent, which is rounded to 3.00 percent.
In addition, pursuant to section 455(b) of the HEA, 20 U.S.C.
1087e(b), as amended by Public Law 106-554, the Consolidated
Appropriations Act 2001, the interest rate for Direct PLUS Loans that
were disbursed on or after July 1, 1994 and on or before July 1, 1998,
is calculated based on the weekly average of a 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 June 26
plus a statutory add-on percentage.
The last calendar week ending on or before June 26, 2005 began on
June 19, 2005 and ended on June 25, 2005. On June 27, 2005, the Board
of Governors of the Federal Reserve System published the 1-year
constant maturity Treasury yield average as 3.40 percent.
Below is specific information on the calculation of the interest
rates for the Direct Loan Program. This information is listed in order
by the date a loan was first disbursed or by the date that the
Consolidation Application was received.
In addition, a summary of the interest rates that are effective for
the period July 1, 2005 through June 30, 2006, is included on charts at
the end of this notice. These charts are organized by
[[Page 68000]]
loan type. In each chart, the interest rates are arranged by the date a
loan was first disbursed or by the date that the consolidation
application was received.
For Direct Loan Program Loans First Disbursed on or After July 1, 1994,
and Before July 1, 1995--
The interest rate for Direct Subsidized Loans, Direct Unsubsidized
Loans, and Direct Subsidized and Unsubsidized Consolidation Loans is
the bond equivalent rate of the 91-day Treasury bills auctioned at the
final auction held before June 1 plus 3.1 percent. These interest rates
may not exceed 8.25 percent during any period. From July 1, 2005, to
June 30, 2006, the interest rate for Direct Subsidized Loans, Direct
Unsubsidized Loans, and Direct Subsidized and Unsubsidized
Consolidation Loans that were first disbursed on or after July 1, 1994,
and before July 1, 1995, is 6.1 percent during all periods.
The interest rate for Direct PLUS Loans and Direct PLUS
Consolidation Loans is the weekly average of a 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 June 26
plus 3.1 percent. These interest rates may not exceed 9.0 percent
during any period. From July 1, 2005, to June 30, 2006, the interest
rate for Direct PLUS Loans and Direct PLUS Consolidation Loans that
were first disbursed on or after July 1, 1994 and before July 1, 1995,
is 6.50 percent for all periods.
For Direct Loan Program Loans First Disbursed on or After July 1, 1995,
and Before July 1, 1998--
The interest rate for Direct Subsidized Loans, Direct Unsubsidized
Loans, and Direct Subsidized and Unsubsidized Consolidation Loans is
the bond equivalent rate of the 91-day Treasury bills auctioned at the
final auction held before June 1 plus 3.1 percent. However, during in-
school, grace, and deferment periods, the interest rate formula is the
bond equivalent rate of the 91-day Treasury bills auctioned at the
final auction held before June 1 plus 2.5 percent. These interest rates
may not exceed 8.25 percent during any period. From July 1, 2005, to
June 30, 2006, the interest rate for Direct Subsidized Loans, Direct
Unsubsidized Loans, and Direct Subsidized and Unsubsidized
Consolidation Loans that were first disbursed on or after July 1, 1995,
and before July 1, 1998, is 5.50 percent during in-school, grace, and
deferment periods and 6.10 percent during all other periods.
The interest rate for Direct PLUS Loans and Direct PLUS
Consolidation Loans is the weekly average of a 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 June 26
plus 3.1 percent. These interest rates may not exceed 9.0 percent
during any period. From July 1, 2005, to June 30, 2006, the interest
rate for Direct PLUS Loans and Direct PLUS Consolidation Loans that
were first disbursed on or after July 1, 1995 and before July 1, 1998,
is 6.50 percent during all periods.
For Direct Loans First Disbursed On or After July 1, 1998, and Before
October 1, 1998--
The interest rate for Direct Subsidized Loans, Direct Unsubsidized
Loans, and Direct Subsidized and Unsubsidized Consolidation Loans is
the bond equivalent rate of the 91-day Treasury bills auctioned at the
final auction held before June 1 plus 2.3 percent. However, during in-
school, grace, and deferment periods, the interest rate formula is the
bond equivalent rate of the 91-day Treasury bills auctioned at the
final auction held before June 1 plus 1.7 percent. These interest rates
may not exceed 8.25 percent during any period. From July 1, 2005, to
June 30, 2006, the interest rate for Direct Subsidized Loans, Direct
Unsubsidized Loans, and Direct Subsidized and Unsubsidized
Consolidation Loans that were first disbursed on or after July 1, 1998
and before October 1, 1998, is 4.70 percent during in-school, grace,
and deferment periods and 5.30 percent during all other periods.
The interest rate for Direct PLUS Loans and Direct PLUS
Consolidation Loans is the bond equivalent rate of the 91-day Treasury
bills auctioned at the final auction held before June 1 plus 3.1
percent. These interest rates may not exceed 9.0 percent during any
period. From July 1, 2005, to June 30, 2006, the interest rate for
Direct PLUS Loans and Direct PLUS Consolidation Loans that were
disbursed on or after July 1, 1998, and before October 1, 1998, is 6.10
percent during all periods.
For Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS
Loans First Disbursed On or After October 1, 1998, and Before July 1,
2006--
The interest rate for Direct Subsidized Loans and Direct
Unsubsidized Loans is the bond equivalent rate of the 91-day Treasury
bills auctioned at the final auction held before June 1 plus 2.3
percent. However, during in-school, grace, and deferment periods, the
interest rate formula is the bond equivalent rate of the 91-day
Treasury bills plus 1.7 percent. These interest rates may not exceed
8.25 percent during any period. From July 1, 2005, to June 30, 2006,
the interest rate for Direct Subsidized Loans and Direct Unsubsidized
Loans that were disbursed after July 1, 1998, and before July 1, 2005,
is 4.70 percent during in-school, grace, and deferment periods and 5.30
percent during all other periods.
The interest rate for Direct PLUS Loans is the bond equivalent rate
of the 91-day Treasury bills auctioned at the final auction held before
June 1 plus 3.1 percent. These interest rates may not exceed 9.0
percent during any period. From July 1, 2005, to June 30, 2006, the
interest rate for Direct PLUS Loans that were disbursed after July 1,
1998, and before July 1, 2006, is 6.10 percent during all periods.
For Direct Consolidation Loans First Disbursed On or After October 1,
1998 and for Which the Application Was Received Before October 1,
1998--
The interest rate for Direct Subsidized and Unsubsidized
Consolidation Loans is the bond equivalent rate of the 91-day Treasury
bills auctioned at the final auction held before June 1 plus 2.3
percent. However, during in-school, grace, and deferment periods, the
interest rate formula is the bond equivalent rate of the 91-day
Treasury bills auctioned at the final auction held before June 1 plus
1.7 percent. These interest rates may not exceed 8.25 percent during
any period. From July 1, 2005, to June 30, 2006, the interest rate for
Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct
Subsidized and Unsubsidized Consolidation Loans that were first
disbursed on or after July 1, 1998 and before October 1, 1998, is 4.70
percent during in-school, grace, and deferment periods and 5.30 percent
during all other periods.
The interest rate for Direct PLUS Consolidation Loans is the bond
equivalent rate of the 91-day Treasury bills auctioned at the final
auction held before June 1 plus 3.1 percent. These interest rates may
not exceed 9.0 percent during any period. From July 1, 2005, to June
30, 2006, the interest rate for Direct PLUS Loans and Direct PLUS
Consolidation Loans that were disbursed on or after July 1, 1998, and
before October 1, 1998, is 6.10 percent during all periods.
[[Page 68001]]
For Direct Consolidation Loans for Which the Application Was Received
on or After October 1, 1998, and Before February 1, 1999--
The interest rate for Direct Consolidation Loans for which the
application was received on or after October 1, 1998 and before
February 1, 1999 is the bond equivalent rate of the 91-day Treasury
bills auctioned at the final auction held before June 1 plus 2.3
percent. These interest rates may not exceed 8.25 percent during any
period. From July 1, 2005, to June 30, 2006, the interest rate for
Direct Consolidation Loans for which the application was received on or
after October 1, 1998 and before February 1, 1999, is 5.30 percent
during all periods.
For Direct Consolidation Loans for Which the Application Was Received
On or After February 1, 1999, and Before July 1, 2006--
The interest rate for Direct Consolidation Loans for which the
application was received on or after February 1, 1999, and before July
1, 2006, is the lesser of 8.25 percent, or the weighted average of the
loans consolidated, rounded to the nearest higher 1/8 of one percent.
Electronic Access to This Document: You may view this document, as well
as all other documents of this Department published in the Federal
Register, in text or Adobe Portable Document Format (PDF) on the
Internet at the following site: http:http://www.ed.gov/news/fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using 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:http://www.gpoaccess.gov/nara/index.html
Program Authority: 20 U.S.C. 1087 et seq.
Dated: November 3, 2005.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
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Interest
rate for 7/ Maximum
Status Treasury instrument Add-on 1/2004 interest
through 6/ rate
30/2005
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Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans
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Loans with first disbursement date 91-day T-bill........... + 3.1 = 6.10 8.25
between 7/1/1994 and 6/30/1995: Any 3.00....................
status.
Loans with first disbursement date
between 7/1/1995 and 6/30/1998:
Repayment or forbearance.......... 91-day T-bill........... + 3.1 = 6.10 8.25
3.00....................
In-school, grace, or deferment.... 91-day T-bill........... + 2.5 = 5.50 8.25
3.00....................
Loans with first disbursement date on
or after 7/1/1998:
Repayment or forbearance.......... 91-day T-bill........... + 2.3 = 5.30 8.25
3.00....................
In-school, grace, or deferment.... 91-day T-bill........... + 1.7 = 4.70 8.25
3.00....................
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Federal Direct Subsidized Consolidation Loans and Federal Direct Unsubsidized Consolidation Loans
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Loans with first disbursement date 91-day T-bill........... + 3.1 = 6.10 8.25
between 7/1/1994 and 6/30/1995: Any 3.00....................
status.
Loans with first disbursement date
between 7/1/1995 and 6/30/1998:
Repayment or forbearance.......... 91-day T-bill........... + 3.1 = 6.10 8.25
3.00....................
In-school, grace, or deferment.... 91-day T-bill........... + 2.5 = 5.50 8.25
3.00....................
Loans with first disbursement date
between 7/1/1998 and 9/30/1998 and
loans with first disbursement date on
or after 10/1/1998 for which the
application was received before 10/1/
1998:
Repayment or forbearance.......... 91-day T-bill........... + 2.3 = 5.30 8.25
3.00....................
In-school, grace, or deferment.... 91-day T-bill........... + 1.7 = 4.70 8.25
3.00....................
Loans for which the application was 91-day T-bill........... + 2.3 = 5.30 8.25
received between 10/01/1998 and 1/31/ 3.00....................
1999: Any status.
Loans for the application was received The lesser of 8.25 percent or the weighted average of the 8.25
on or after 2/01/1999: Any status. loans application consolidated, rounded to the next
higher 1/8 of one percent.
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Federal Direct PLUS Loans
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Loans with first disbursement date 1-year constant maturity + 3.1 = 6.50 9.00
before 7/1/1998: Any status. Treasury yield.
3.40....................
[[Page 68002]]
Loans with first disbursement date on 91-day T-bill........... + 3.1 = 6.10 9.00
or after 7/1/1998: Any status. 3.00....................
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Federal Direct PLUS Consolidation Loans
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Loans with first disbursement date 1-year constant maturity + 3.1 = 6.50 9.00
before 7/1/1998: Any status. Treasury yield.
3.40....................
Loans with first disbursement date 91-day T-bill........... + 3.1 = 6.10 9.00
between 7/1/1998 and 9/30/1998 and 3.00....................
loans with first disbursement date on
or after 10/1/1998 for which the
application was received before 10/1/
1998: Any status.
Loans for which the application was 91-day T-bill........... + 2.3 = 5.30 8.25
received between 10/01/1998 and 1/31/ 3.00....................
1999: Any status.
Loans for which the application was The lesser of 8.25 percent or the weighted average of the 8.25
received on or after 2/01/1999: Any loans application consolidated, rounded to the next
status. higher was received 1/8 of one percent.
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[FR Doc. 05-22366 Filed 11-8-05; 8:45 am]
BILLING CODE 4000-01-P