[Federal Register: October 22, 2004 (Volume 69, Number 204)]
[Notices]
[Page 62033-62040]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc04-41]
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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, 2004 through June 30, 2005.
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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, 2004 through
June 30, 2005.
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 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 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
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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 24, 2004, which is used to calculate the interest rates on these
loans, is 1.066 percent, which is rounded to 1.07 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 2004, began on
June 20, 2004 and ended on June 26, 2004. On June 25, 2004, the Board
of Governors of the Federal Reserve System published the 1-year
constant maturity Treasury yield average as 2.16 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, 2004 through June 30, 2005, 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 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, 2004, to
June 30, 2005, 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 4.17 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, 2004, to June 30, 2005, 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 5.26 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, 2004, to
June 30, 2005, 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 3.57 percent during in-school, grace, and deferment
periods and 4.17 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, 2004, to June 30, 2005, 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 5.26 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, 2004, to
June 30, 2005, 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 2.77 percent during in-school, grace,
and deferment periods and 3.37 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, 2004, to June 30, 2005, the
[[Page 62035]]
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 4.17 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,
2005
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, 2004, to June 30, 2005,
the interest rate for Direct Subsidized Loans and Direct Unsubsidized
Loans that were disbursed after July 1, 1998, and before July 1, 2005,
is 2.77 percent during in-school, grace, and deferment periods and 3.37
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, 2004, to June 30, 2005, the
interest rate for Direct PLUS Loans that were disbursed after July 1,
1998, and before July 1, 2005, is 4.17 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, 2004, to June 30, 2005, 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 2.77
percent during in-school, grace, and deferment periods and 3.37 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, 2004, to June
30, 2005, 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 4.17 percent during all periods.
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, 2004, to June 30, 2005, 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 3.37 percent
during all periods.
For Direct Consolidation Loans for Which the Application was Received
on or After February 1, 1999, and Before July 1, 2005
The interest rate for Direct Consolidation Loans for which the
application was received on or after February 1, 1999, and before July
1, 2005, 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
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Regulations is available on GPO Access at:
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.
Program Authority: 20 U.S.C. 1087 et seq.
Dated: October 19, 2004.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
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[FR Doc. 04-23720 Filed 10-21-04; 8:45 am]
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