Quarter: March 31, 2014
Posted Date:April 3, 2014
Subject: Federal Family Education Loan Program Special Allowance Rates for the Quarter Ending March 31, 2014 (Updated April 15, 2014)
Note: On April 15, 2014, we replaced both attachments to this announcement. In the replacement attachments, we corrected the “Special Allowance At Annual Rate” in section VI and VII (page 6). The corrected annual rate is .005.
Commercial Paper Rate
In calculating quarterly Special Allowance rates, the Department is required, under section 438(b)(2)(I)(i)(I) of the Higher Education Act (HEA), to determine “the average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period.” For the quarter ending March 31, 2014 the average rate used to compute special allowance will be 0.13 percent.
Beginning with the quarter ending June 30, 2012, lenders were given the option to use “the average of the bond equivalent rates of the quotes of the 1-month London InterBank Offered Rate (LIBOR) in effect for each of the days in such quarter as compiled and released by the British Bankers Association” in place of the Commercial Paper Rate. For the quarter ending March 31, 2014 the average rate used to compute special allowance will be 0.16 percent.
Treasury Bill Rate
For loans made prior to January 1, 2000, pursuant to section 438, the Special Allowance rate is calculated by using the average of the bond equivalent rates of the ninety-one day Treasury bills as published by the Department of the Treasury. These rates can be found at http://www.treasurydirect.gov/instit/annceresult/annceresult.htm. For the quarter ending March 31, 2014, the average of the rates is 0.05 percent.
AttachmentsAttachments A, B, C and D contain the quarterly special allowance rates computed pursuant to section 438. Attachment E contains the bond equivalent rates of the 91-day Treasury Bills auctioned during the quarter.