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Federal Family Education Loan Program

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AGENCY:

Federal Student Aid, Department of Education.

ACTION:

Notice of interest rates for the Federal Family Education Loan Program for the period July 1, 2007 through June 30, 2008.

SUMMARY:

The Acting Chief Operating Officer for Federal Student Aid announces the interest rates for the period July 1, 2007 through June 30, 2008 for loans made under the Federal Family Education Loan (FFEL) Program.

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FOR FURTHER INFORMATION CONTACT:

Don Watson, U.S. Department of Education, Room 114I2, UCP, 400 Maryland Avenue, SW., Washington, DC 20202-5400. Telephone: (202) 219-7037.

If you use a telecommunications device for the deaf (TDD), you may call Start Printed Page 62636the 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.

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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.

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 on or after October 1, 1992 and before July 1, 2006;
  • FFEL PLUS loans first disbursed on or after July 1, 1998 and before July 1, 2006; 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, 2007, which is used to calculate the interest rates for the one-year period beginning on July 1, 2007, is 4.919 percent, which is rounded to 4.92 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.

The weekly average of the 1-year constant maturity Treasury yield for the last calendar week ending on or before June 26, 2007 is 4.95 percent.

Interest Rates for “Converted” Variable-Rate FFEL Stafford Loans

1. Under section 427A(i)(7) of the HEA (20 U.S.C. 1077a(i)(7)), 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 ten percent. The interest rate for these loans for the period from July 1, 2007, through June 30, 2008, is 8.17 percent (4.92 percent plus 3.25 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 were subject to the provisions of section 427A(i)(3) of the HEA (20 U.S.C. 1077a(i)(3)) and were converted to variable-rate loans with maximum interest rates of seven percent, eight percent, nine percent, or ten percent, respectively. For loans with fixed interest rates of seven percent that were converted to variable-rate loans, the interest rate for the period from July 1, 2007, through June 30, 2008, is the maximum interest rate of 7.00 percent. Note that because 4.92 percent plus 3.1 percent equals 8.02 percent, which exceeds the maximum interest rate allowed, we use the maximum interest rate. For loans with fixed interest rates of eight percent, nine percent, or eight percent with an increase to ten percent that were converted to variable-rate loans, the interest rate for the period from July 1, 2007, through June 30, 2008, is the maximum interest rate of 8.00 percent. Note that because 4.92 percent plus 3.1 percent equals 8.02 percent, which exceeds the maximum interest rate allowed, we use the maximum interest rate.

Interest Rates for Variable-Rate FFEL Stafford Loans

1. For 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 (i.e., a late disbursement), with a maximum interest rate of nine percent. The interest rate for the period from July 1, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 percent).

2. For 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, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 percent).

3. For 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, 2007, through June 30, 2008, is 7.42 percent (4.92 percent plus 2.5 percent); and

(b) During all other periods, the interest rate for the period from July 1, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 percent).

4. For FFEL Stafford loans, first disbursed on or after July 1, 1998, but before July 1, 2006, 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, 2007, through June 30, 2008, is 6.62 percent (4.92 percent plus 1.7 percent); and

(b) During all other periods, the interest rate for the period from July 1, 2007, through June 30, 2008, is 7.22 percent (4.92 percent plus 2.3 percent).

Interest Rates for Fixed-Rate FFEL Stafford Loans

1. For FFEL Stafford loans for which the first disbursement was made on or after July 1, 2006, the interest rate is fixed at 6.80 percent.

Interest Rates for FFEL PLUS and FFEL Supplemental Loans for Students (SLS) Loans

1. For 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, 2007, through June 30, 2008, is 8.20 percent (4.95 percent plus 3.25 percent).

2. For 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, 2007, through June 30, 2008, is 8.05 percent (4.95 percent plus 3.10 percent).

3. For FFEL PLUS loans first disbursed on or after October 1, 1992, but before July 1, 1994, the interest rate may not exceed ten percent. The interest rate for the period from July 1, 2007, through June 30, 2008, is 8.05 percent (4.95 percent plus 3.10 percent).

4. For FFEL PLUS loans first disbursed on or after July 1, 1994, but prior to July 1, 1998, the interest rate may not exceed nine percent. The interest rate for the period from July 1, Start Printed Page 626372007, through June 30, 2008, is 8.05 percent (4.95 percent plus 3.10 percent).

5. For FFEL PLUS loans first disbursed on or after July 1, 1998, and before July 1, 2006, the interest rate may not exceed nine percent. The interest rate for the period from July 1, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 percent).

6. FFEL PLUS loans first disbursed on or after July 1, 2006, have an interest rate that is fixed at 8.50 percent.

Interest Rates for FFEL Consolidation Loans

1. For FFEL Consolidation loans for which the consolidation loan was made by the lender before July 1, 1994, the interest rate is the weighted average of the interest rates on the loans consolidated, rounded to the nearest whole percent, but may not be less than nine percent.

2. For FFEL Consolidation loans for which the consolidation loan was made by the lender on or after July 1, 1994, and before November 13, 1997, the interest rate is the weighted average of the interest rates on the loans consolidated, rounded upward to the nearest whole percent.

3. With respect to 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, 2007, through June 30, 2008, is 8.02 percent (4.92 percent plus 3.1 percent).

4. With respect to FFEL Consolidation loans for which the consolidation loan application was received by the lender on or after October 1, 1998, the interest rate may not exceed 8.25 percent. The interest rate is the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher 1/8 of one percent.

5. With respect to consolidation loans, 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 three percent. For the quarter ending before July 1, 2007, the average 91-day Treasury bill rate was 4.895 percent (rounded to 4.90 percent). The maximum interest rate for the period from July 1, 2007, through June 30, 2008, is 7.90 percent (4.90 percent plus 3.0 percent). 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 the Consolidation loan is determined annually, for each 12-month period beginning on July 1 and ending on June 30.

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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.gpoaccess.gov/​nara/​index.html.

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Program Authority: 20 U.S.C. 1077a et seq.

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Dated: October 31, 2007.

Lawrence A. Warder,

Acting Chief Operating Officer, Federal Student Aid.

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[FR Doc. E7-21806 Filed 11-5-07; 8:45 am]

BILLING CODE 4000-01-P