Bulletin ID
DLB - 98 - 42
| PublicationDate: 10/1/98 BulletinID: DLB - 98 - 42 October 1998 DLB-98-42 SUBJECT: Lower Interest Rates for Some Direct Consolidation Loans Dear Colleague: The purpose of this Direct Loan Bulletin is to alert you to an important opportunity for some student loan borrowers. As you know, on October 7, President Clinton signed the Higher Education Amendments of 1998. Under the new amendments, borrowers who apply for a consolidation loan from the Direct Loan Program before February 1, 1999, will receive an interest rate that is based on the 91-day Treasury bill rate plus 2.3 percentage points. For borrowers who apply now, the interest rate will be 7.46 percent. The interest rate is variable and re-computed annually on July 1. To be eligible to consolidate loans at this time, a borrower who is enrolled or accepted for enrollment in an institution of higher education may not have Federal Family Education Loan Program loans or Federal Perkins Loan Program loans. Note: This restriction expires on January 31, 1999. Enclosed is a chart showing those borrowers who may benefit by consolidating before February 1, 1999. Generally, these are Direct Loan borrowers with "older" loans. Also enclosed is a question and answer sheet, which addresses questions you may have concerning borrower eligibility for Direct Consolidation loans. This information is available on the Direct Loan web site at http://www.ed.gov/DirectLoan and on the ifap (Information for Financial Aid Professionals) site at http://ifap.ed.gov. Students may apply for a Direct Consolidation Loan electronically or download an application from http://www.ed.gov/DirectLoan. They also may call the Loan Origination Center at 1/800/557-7392 and request an application. I encourage you to duplicate and share these materials with your students. This is a valuable, but time sensitive, opportunity for some borrowers. Thank you for your ongoing support of the Direct Loan Program. Sincerely, Joe L. McCormick Chair Direct Loan Task Force Enclosure A Enclosure B |