[Federal Register: September 13, 2001 (Volume 66, Number 178)]
[Notices]
[Page 47637-47639]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13se01-33]
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DEPARTMENT OF EDUCATION
Student Financial Assistance; Federal Family Education Loan
Program
AGENCY: Department of Education.
ACTION: Notice of interest rates for the Federal Family Education Loan
Program for the period July 1, 2001, through June 30, 2002.
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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 Federal Family Education Loan (FFEL) Program for
the period July 1, 2001, through June 30, 2002.
FOR FURTHER INFORMATION CONTACT: Brian Smith, Program Specialist.
Mailing address: Program Development Division, 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
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed in the preceding
paragraph.
SUPPLEMENTARY INFORMATION:
General
Under title IV, part B of the Higher Education Act of 1965, as
amended, (HEA), 20 U.S.C. Section 1071, et seq., most loans made to
student and parent borrowers under the FFEL Program have variable
interest rates.
[[Page 47638]]
The formulas for determining the interest on variable rate FFEL
Program loans are established in section 427A of the HEA (20 U.S.C.
1077a).
The interest rates on variable-rate loans are determined annually
and apply to the following 12-month period beginning July 1 and ending
June 30.
As described below, interest rate caps apply to most FFEL Program
loans.
FFEL interest rate formulas use the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction held before June 1 of
each year plus a statutorily established add-on to determine the
variable interest rate for--
FFEL fixed-rate Stafford loans first disbursed before
October 1, 1992 that have been converted to variable-rate loans;
All FFEL Subsidized and Unsubsidized Stafford Loans first
disbursed after October 1, 1992;
FFEL PLUS loans first disbursed on or after July 1, 1998;
and
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 bond equivalent rate of the 91-day Treasury bills auctioned on
May 29, 2001, which is used to calculate the interest rates for the one
year period beginning on July 1, 2001, is 3.688 percent (rounded to
3.69 percent).
For FFEL PLUS loans first disbursed before July 1, 1998, interest
rates are 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.
On June 22, 2001, the Board of Governors of the Federal Reserve
System published the 1-year constant maturity Treasury yield average as
3.46 percent.
Interest Rates for ``Converted'' Variable-Rate FFEL Stafford Loans
1. Under section 427A(i)(7) of the HEA, loans that were originally
made with a fixed interest rate of eight percent with an increase to
ten percent four years after commencement of the repayment period were
converted to a variable interest rate that may not exceed 10 percent:
The interest rate for these loans for the period from July 1, 2001,
through June 30, 2002, is 6.94 percent (3.69 percent plus 3.25 percent
equals 6.94 percent).
2. Loans with fixed interest rates of seven percent, eight percent,
nine percent, or eight percent with an increase to ten percent four
years after commencement of the repayment period, that were subject to
the provisions of section 427A(i)(3) of the HEA and were converted to
variable-rate loans--the interest rate may not exceed seven percent,
eight percent, nine percent, or ten percent, respectively: The interest
rate for the period from July 1, 2001, through June 30, 2002, is 6.79
percent (3.69 percent plus 3.1 percent equals 6.79 percent).
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--the interest rate may not exceed
9 percent: The interest rate for the period from July 1, 2001, through
June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent equals
6.79 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 was 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 from July 1, 2001,
through June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent
equals 6.79 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 from July 1, 2001, through June 30, 2002, is 6.19
percent (3.69 percent plus 2.5 percent equals 6.19 percent); and
(b) During all other periods: The interest rate for the period from
July 1, 2001, through June 30, 2002, is 6.79 percent (3.69 percent plus
3.1 percent equals 6.79 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 from July 1, 2001, through June 30, 2002,
is 5.39 percent (3.69 percent plus 1.7 percent equals 5.39 percent);
and
(b) During all other periods: The interest rate for the period from
July 1, 2001, through June 30, 2002, is 5.99 percent (3.69 percent plus
2.3 percent equals 5.99 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 from July 1, 2001, through June 30,
2002, is 6.71 percent (3.46 percent plus 3.25 percent equals 6.71
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 from July
1, 2001, through June 30, 2002, is 6.56 percent (3.46 percent plus 3.1
percent equals 6.56 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 from July 1, 2001, through June 30, 2002,
is 6.56 percent (3.46 percent plus 3.1 percent equals 6.56 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 from July 1, 2001, through June 30, 2002,
is 6.56 percent (3.46 percent plus 3.1 percent equals 6.56 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 from July 1, 2001, through June 30, 2002,
is 6.79 percent (3.69 percent plus 3.1 percent equals 6.79 percent).
Interest Rates for FFEL Consolidation Loans
1. 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 interest rate for the period from July 1, 2001, through
June 30, 2002, is 6.79 percent (3.69 percent plus 3.1 percent equals
6.79 percent).
2. 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, 2001, the average 91-day
[[Page 47639]]
Treasury bill rate was 3.77 percent. The maximum interest rate for the
period from July 1, 2001, through June 30, 2002, is 6.77 percent (3.77
percent plus 3.0 percent equals 6.77 percent).
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Note: The official version of this document is the document
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Program Authority: 20 U.S.C. 1077a and 20 U.S.C. 1087e.
Dated: September 10, 2001.
Greg Woods,
Chief Operating Officer, Student Financial Assistance.
[FR Doc. 01-23040 Filed 9-12-01; 8:45 am]
BILLING CODE 4000-01-P