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Publication Date: November 6, 2007
FRPart:
Page Numbers: 62635-62637
Summary: Notice of interest rates for the Federal Family Education Loan Program for the period July 1, 2007 through June 30, 2008.
Posted on 11-06-2007
[Federal Register: November 6, 2007 (Volume 72, Number 214)]
[Notices]
[Page 62635-62637]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06no07-40]
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DEPARTMENT OF EDUCATION
Federal Family Education Loan Program
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.
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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.
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
the 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.
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,
2007, 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.
Electronic Access to This Document: You may 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) on the
Internet at the following site: http://www.gpoaccess.gov/nara/index.html.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free at 1-888-293-6498; or in
the Washington, DC area at (202) 512-1530.
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.
Program Authority: 20 U.S.C. 1077a et seq.
Dated: October 31, 2007.
Lawrence A. Warder, Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. E7-21806 Filed 11-5-07; 8:45 am]
BILLING CODE 4000-01-P
Attachments/Enclosures:
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