This PDF is the current document as it appeared on Public Inspection on 09/30/2016 at 08:45 am.
Federal Student Aid, Department of Education.
Catalog of Federal Domestic Assistance (CFDA) Number: 84.032.
In accordance with section 427A of the Higher Education Act of 1965, as amended, (HEA), 20 U.S.C. 1077a, the Chief Operating Officer for Federal Student Aid announces the variable interest rates for the period July 1, 2016, through June 30, 2017, for certain loans made under the Federal Family Education Loan (FFEL) Program. The Chief Operating Officer takes this action to give notice of FFEL Program loan variable interest rates to the public.
This notice is effective October 3, 2016.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Rene Tiongquico, U.S. Department of Education, 830 First Street NE., 11th Floor, Washington, DC 20202. Telephone: (202) 377-4270 or by email: Rene.Tiongquico@ed.gov.
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.End Further Info End Preamble Start Supplemental Information
Section 427A of the HEA, provides formulas for determining the interest rates charged to borrowers on loans made under the Federal Family Education Loan (FFEL) Program, including Federal Subsidized and Unsubsidized Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans.
The FFEL Program includes loans with variable interest rates and loans with fixed interest rates. Most loans made under the FFEL Program before July 1, 2006, have variable interest rates that change each year. In most cases, 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.
Under section 427A(l) of the HEA, FFEL Program loans first disbursed on or after July 1, 2006, and before July 1, 2010, have a fixed interest rate. The Chief Operating Officer is discontinuing providing the fixed interest rates for FFEL Program loans first disbursed on or after July 1, 2006 and before July 1, 2010. Interest rates for these loans may be found in a Federal Register notice published on September 15, 2015 (80 FR 55342).
Federal Consolidation Loans made prior to November 13, 1997, and on or after October 1, 1998, have a fixed interest rate that is based on the weighted average of the loans that are consolidated.
Interest rates for Federal Consolidation Loans made between November 13, 1997 and September 30, 1998 are provided in Chart 3.
FFEL variable interest rates are based on formulas that use the bond equivalent rate of the 91-day Treasury bills auctioned at the final auction held before June 1 of each year plus a statutorily established add-on. These formulas apply to: All Federal Subsidized and Unsubsidized Stafford Loans first disbursed before October 1, 1992, that have been converted to variable rate loans; all Federal Subsidized and Unsubsidized Stafford Loans first disbursed on or after October 1, 1992, and before July 1, 2006; Federal PLUS Loans first disbursed on or after July 1, 1998, and before July 1, 2006; and Federal Consolidation Loans for which the Federal Consolidation Loan application was received on or after November 13, 1997, and before October 1, 1998. In each case, the calculated rate is capped by a maximum interest rate. The bond equivalent rate of the 91-day Treasury bills auctioned on May 31, 2016, which is used to calculate the interest rates on these loans, is 0.345 rounded up to 0.35 percent.
For Federal PLUS loans first disbursed before July 1, 1998, the interest rate is based on the weekly average of the one-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System on the last day of the calendar week ending on or before June 26 of each year, plus a statutory add-on percentage. The calculated rate is capped by a maximum interest rate. The weekly average of the one-year constant maturity Treasury yield published on June 27, 2016, which is used to calculate the interest rate on these loans, is 0.55 percent.
This notice includes three charts containing specific information on the calculation of variable interest rates for loans made under the FFEL Program:
Chart 1 contains information on the interest rates for Federal Subsidized and Unsubsidized Stafford Loans that were made as fixed-rate loans, but were subsequently converted to variable-rate loans.
Chart 2 contains information on the interest rates for variable-rate Federal Subsidized and Unsubsidized Stafford Loans.
Chart 3 contains information on the interest rates for variable-rate Federal PLUS Loans, certain Federal Consolidation Loans, and Consolidation Loans that include loans made by the U.S. Department of Health and Human Services under subpart I of part A of title VII of the Public Health Service Act.
|Cohort||Original fixed interest rate||Max. rate (%)||91-Day T-bill rate (%)||Margin (%)||Total rate (%)|
|First disbursed on or after||First disbursed before|
|7/1/1988||7/23/1992||8.00%, increasing to 10.00%||10.00||0.35||3.25||3.60|
|7/23/1992||10/1/1992||8.00%, increasing to 10.00%||10.00||0.35||3.25||3.60|
|Start Printed Page 68001|
|7/23/1992||7/1/1994||8.00%, increasing to 10.00%||10.00||0.35||3.10||3.45|
|Note: The FFEL Program loans represented by the second row of the chart were only made to “new borrowers” on or after July 23, 1992. Whether the FFEL Program loans represented by the third through sixth rows of the chart were made to a specific borrower depends on the interest rate on the borrower's existing loans (see the `Original Fixed Interest Rate' column in Chart 1) at the time the borrower received the loan(s) on or after July 23, 1992 and prior to July 1, 1994.|
In Charts 2 and 3, a dagger following a date in a cohort field indicates that the trigger for the rate to apply is a period of enrollment for which the loan was intended either “ending before” or “beginning on or after” the date in the cohort field.
|Cohort||Max. rate (%)||91-Day T-bill rate (%)||Margin||Total rate|
|First disbursed on or after||First disbursed before||In-school, grace, deferment (%)||All other periods (%)||In-school, grace, deferment (%)||All other periods (%)|
|Note: The FFEL Program loans represented in the first row in Chart 2 were only made to “new borrowers” on or after October 1, 1992. The FFEL Program loans represented in the second row in Chart 2 were only made to “new borrowers” on or after July 1, 1994. The FFEL Program loans represented in the third row in Chart 2 must—in addition to having been first disbursed on or after July 1, 1994, and before July 1, 1995—have been made for a period of enrollment that began on or included July 1, 1994.|
|Loan type||Cohort||Max. rate (%)||Index rate||Margin (%)||Total rate (%)|
|First disbursed on or after||First disbursed before||91-Day T-bill rate (%)||1-Year constant treasury maturity|
|PLUS and SLS||10/1/1992||12.00||0.55||3.25||3.80|
|Loan type||Application received on or after||Application received before||Max. rate (%)||91-Day T-bill rate (%)||Average of the bond equivalent rates of the 91-Day T-bill for the quarter prior to July 1||Margin (%)||Total rate (%)|
|HHS Portion of Consolidation||11/13/1997||0.27||3.00||3.27|
The last row in Chart 3 refers to portions of Federal Consolidation Loans attributable to loans made by the U.S. Department of Health and Human Services under subpart I of part A of title VII of the Public Health Service Act.
Note: No new loans have been made under the FFEL Program since June 30, 2010.
Electronic Access to This Document: 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 Start Printed Page 68002available via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can 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). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.
You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.Start Signature
Dated: September 27, 2016.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2016-23766 Filed 9-30-16; 8:45 am]
BILLING CODE 4000-01-P