[Federal Register: September 13, 2001 (Volume 66, Number 178)]
[Notices]
[Page 47639-47643]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13se01-34]
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DEPARTMENT OF EDUCATION
William D. Ford Federal Direct Loan Program
AGENCY: Department of Education.
ACTION: Notice of interest rates for the William D. Ford Federal Direct
Loan Program for the period from July 1, 2001 through June 30, 2002.
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SUMMARY: The Chief Operating Officer for Student Financial Assistance
announces the interest rates for loans made under the William D. Ford
Federal Direct Loan (Direct Loan) Program for the period from July 1,
2001 through June 30, 2002.
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 of 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. 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 29, 2001, which is used to calculate the interest rates on these
loans is 3.688 percent (rounded to 3.69 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 2001, was June
22, 2001. On that date, the Board of Governors of the Federal Reserve
System published the 1-year constant maturity Treasury yield average as
3.46 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, 2001 through June 30, 2002, is included on charts at
the end of this notice. These charts are organized by 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 FURTHER INFORMATION CONTACT: Don 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
alternative format (e.g., Braille, large print, audiotape or computer
diskette) on request to the contact person listed in the preceding
paragraph.
For Direct Loan Program Loans Disbursed On Or After July 1, 1994,
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, for loans
disbursed on or after July 1, 1995, and before July 1, 1998, during in
school, grace, and deferment periods, the interest rate 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, 2001, to June
30, 2002, the interest rate for Direct Subsidized Loans, Direct
Unsubsidized Loans and Direct Subsidized and Unsubsidized Consolidation
Loans that were disbursed on or after July 1, 1994, and before July 1,
1998, is 6.19 percent during in-school, grace, and deferment periods
and 6.79 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. However, these
[[Page 47640]]
interest rates may not exceed 9.0 percent during any period. From July
1, 2001, to June 30, 2002, the interest rate for Direct PLUS Loans and
Direct PLUS Consolidation Loans that were disbursed on or after July 1,
1995 and before July 1, 1998, is 6.56 percent.
For Direct Loans 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. 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. However, these interest
rates may not exceed 8.25 percent during any period. From July 1, 2001,
to June 30, 2002, the interest rate for Direct Subsidized Loans, Direct
Unsubsidized Loans, and Direct Subsidized and Unsubsidized
Consolidation Loans that were disbursed on or after July 1, 1998 and
before October 1, 1998, is 5.39 percent during in-school, grace, and
deferment periods and 5.99 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. However, these interest rates may not exceed 9.0 percent
during any period. From July 1, 2001, to June 30, 2002, 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
6.79 percent.
For Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS
Loans Disbursed On Or After October 1, 1998, and Before July 1,
2003
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. During in-school, grace, and deferment periods, the interest
rate is the bond equivalent rate of the 91-day Treasury bills plus 1.7
percent. However, these interest rates may not exceed 8.25 percent
during any period. From July 1, 2001, to June 30, 2002, the interest
rate for Direct Subsidized Loans and Direct Unsubsidized Loans that
were disbursed after July 1, 1998 is 5.39 percent during in-school,
grace, and deferment periods and 5.99 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. However, these interest rates may not exceed
9.0 percent during any period. From July 1, 2001, to June 30, 2002, the
interest rate for Direct PLUS Loans that were disbursed after July 1,
1998, is 6.79 percent.
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 during this period 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, these interest rates may not exceed
8.25 percent during any period. From July 1, 2001, to June 30, 2002,
the interest rate for Direct Consolidation Loans for which the
application was received on or after October 1, 1998 and before
February 1, 1999, these loans is 5.99 percent.
For Direct Consolidation Loans For Which The Application Was
Received On Or After February 1, 1999, and Before July 1, 2003
The interest rate for Direct Consolidation Loan for which the
application was received on or after February 1, 1999, and before July
1, 2003, 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
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Note: The official version of this document is the document
published in the Federal Register. Free internet access to the
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Regulations is available on GPO access at: http://
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(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: September 10, 2001.
Greg Woods,
Chief Operating Officer, Student Financial Assistance.
BILLING CODE 4000-01-P
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[FR Doc. 01-23041 Filed 9-12-01; 8:45 am]
BILLING CODE 4000-01-C