Annual Notice of Interest Rates of Federal Student Loans Made Under the William D. Ford Federal Direct Loan Program
Federal Register, Volume 78 Issue 17 (Friday, January 25, 2013)
Federal Register Volume 78, Number 17 (Friday, January 25, 2013)
Notices
Pages 5431-5433
From the Federal Register Online via the Government Printing Office www.gpo.gov
FR Doc No: 2013-01421
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DEPARTMENT OF EDUCATION
Annual Notice of Interest Rates of Federal Student Loans Made Under the William D. Ford Federal Direct Loan Program
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice.
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Catalog of Federal Domestic Assistance (CFDA) Number: 84.268.
DATES: This notice is effective January 25, 2013.
SUMMARY: In accordance with by section 455(b)(9) of the Higher Education Act of 1965, as amended, the Chief Operating Officer for Federal Student Aid announces the interest rates for the period July 1, 2012, through June 30, 2013, for loans made under the William D. Ford Federal Direct Loan (Direct Loan) Program. The Chief Operating Officer takes this action to give notice of Direct Loan interest rates to the public.
FOR FURTHER INFORMATION CONTACT: Ian Foss, U.S. Department of Education, 830 First Street NE., room 114I1, Washington, DC 20202. Telephone: (202) 377-3681 or by email: ian.foss@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.
SUPPLEMENTARY INFORMATION: Section 455(b) of the Higher Education Act of 1965, as amended (HEA) (20 U.S.C. 1087e(b)), provides formulas for determining the interest rates charged to borrowers for loans made under the Direct Loan Program including: Federal Direct Subsidized Stafford Loans (Direct Subsidized Loans); Federal Direct Unsubsidized Stafford Loans (Direct Unsubsidized Loans); Federal Direct PLUS Loans (Direct PLUS Loans); and Federal Direct Consolidation Loans (Direct Consolidation Loans).
The Direct Loan Program includes loans with variable interest rates and loans with fixed interest rates. Most loans made under the Direct Loan 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 455(b) of the HEA, Direct Loans first disbursed on or after July 1, 2006, have a fixed interest rate.
In the case of some Direct Consolidation Loans, the interest rate is determined by the date on which the Direct Consolidation Loan application was received. Direct Consolidation Loans for which the application was received on or after February 1, 1999, have a fixed interest rate. This fixed rate is based on the weighted average of the loans that are consolidated, rounded up to the nearest higher \1/8\ of one percent up to a maximum rate of 8.25 percent.
Under section 455(b) of the HEA, the Direct Loan variable interest rates are based on formulas that use the bond equivalent rates of the 91-day Treasury bills auctioned at the final auction held before June 1 of each year, plus a statutory add-on percentage. These formulas apply to all Direct Subsidized Loans and Direct Unsubsidized Loans; Direct Consolidation Loans for which the application was received on or after July 1, 1998, and before February 1, 1999; and Direct PLUS Loans disbursed on or after July 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 29, 2012, which is used to calculate the interest rates on these loans, is 0.086 percent, which is rounded to 0.09 percent.
In addition, under section 455(b)(4) of the HEA, the interest rate for Direct PLUS Loans that were first disbursed on or after July 1, 1994, and before July 1, 1998, 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 22, 2012, which is used to calculate the interest rate on these loans, is 0.19 percent.
This notice includes five charts containing specific information on the calculation of the interest rates for loans made under the Direct Loan Program.
Chart 1 contains information on the interest rates for variable-
rate Direct Subsidized and Direct Unsubsidized Loans.
Chart 2 contains information on the interest rates for variable-
rate Direct PLUS Loans.
Chart 3 contains information on the interest rates for variable-
rate Direct Subsidized Consolidation Loans and Direct Unsubsidized Consolidation Loans.
Chart 4 contains information on the interest rates for variable-
rate Direct PLUS Consolidation Loans.
Chart 5 contains information on the interest rates for fixed-rate Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans.
Chart 1--Variable-Rate Direct Subsidized and Direct Unsubsidized Loans
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Cohort Index rate Margin Total rate
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Max. rate In-school, In-school,
First (percent) 91-Day T-Bill grace, All other grace, All other
First disbursed on or after disbursed rate deferment periods deferment periods
before (percent) (percent) (percent) (percent) (percent)
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7/1/1994................................ 7/1/1995 8.25 0.09 3.10 3.10 3.19 3.19
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7/1/1995................................ 7/1/1998 8.25 0.09 2.50 3.10 2.59 3.19
7/1/1998................................ 10/1/2006 8.25 0.09 1.70 2.30 1.79 2.39
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Chart 2 --Variable-Rate Direct PLUS Loans
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Cohort Index rate
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1-Year
First Max. rate 91-Day T-Bill constant Margin Total rate
First disbursed on or after disbursed (percent) rate treasury (percent) (percent)
before (percent) maturity
(percent)
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7/1/1994................................................ 7/1/1998 9.00 .............. 0.19 3.10 3.29
7/1/1998................................................ 10/1/2006 8.25 0.09 .............. 3.10 3.19
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In the remaining Charts 3 through 5, an asterisk following a date in a cohort field indicates that the trigger for the rate to apply is an application for a Direct Consolidation Loan being received either ``on or after'' or ``before'' the date in the cohort field. For example, the fourth row in Chart 3 describes the interest rate for Direct Subsidized and Unsubsidized Consolidation Loans for which the application was received before October 1, 1998, and that were first disbursed on or after October 1, 1998.
Chart 3--Variable-Rate Direct Subsidized and Direct Unsubsidized Consolidation Loans
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Cohort Index rate Margin Total rate
--------------------------------------------------------- -------------------------------------------------------------------------------
Max. rate In-school, In-school,
First (percent) 91-Day T-Bill grace, All other grace, All other
First disbursed on or after disbursed rate deferment periods deferment periods
before (percent) (percent) (percent) (percent)
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7/1/1994................................ 7/1/1995 8.25 0.09 3.10 3.10 3.19 3.19
7/1/1995................................ 7/1/1998 8.25 0.09 2.50 3.10 2.59 3.19
7/1/1998................................ 10/1/1998 8.25 0.09 1.70 2.30 1.79 2.39
10/1/1998............................... 10/1/1998* 8.25 0.09 1.70 2.30 1.79 2.39
10/1/1998*.............................. 2/1/1999* 8.25 0.09 2.30 2.30 2.39 2.39
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Chart 4--Variable-Rate Direct PLUS Consolidation Loans
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Cohort Index rate Margin Total rate
------------------------------------------------------- -----------------------------------------------------------------------------------
1-Year
First Max. rate 91-Day T- constant In-school, All other In-school, All other
First disbursed on or after disbursed (percent) Bill rate treasury grace, periods grace, periods
before (percent) maturity deferment (percent) deferment (percent)
(percent) (percent) (percent)
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7/1/1994................................ 7/1/1998 9.00 ............ 0.19 3.10 3.10 3.29 3.29
7/1/1998................................ 10/1/1998 9.00 0.09 ............ 3.10 3.10 3.19 3.19
10/1/1998............................... 10/1/1998* 9.00 0.09 ............ 3.10 3.10 3.19 3.19
10/1/1998*.............................. 2/1/1999* 8.25 0.09 ............ 2.30 2.30 2.39 2.39
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Chart 5--Fixed-Rate Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans
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First First
Loan type Student grade level disbursed on disbursed Rate
or after before
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Subsidized........................ Undergraduate 7/1/2006 7/1/2008 6.80
Students.
Subsidized........................ Undergraduate 7/1/2008 7/1/2009 6.00
Students.
Subsidized........................ Undergraduate 7/1/2009 7/1/2010 5.60
Students.
Subsidized........................ Undergraduate 7/1/2010 7/1/2011 4.50
Students.
Subsidized........................ Undergraduate 7/1/2011 7/1/2013 3.40
Students.
Subsidized........................ Graduate/Professional 7/1/2006 7/1/2012 6.80
Students.
Unsubsidized...................... All Students......... 7/1/2006 7/1/2013 6.80
PLUS.............................. Parents and Graduate/ 7/1/2006 7/1/2013 7.90
Professional
Students.
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Consolidation..................... All.................. 2/1/1999 7/1/2013 Weighted average of
rates on the loans
included in the
consolidation,
rounded to \1/8\ of
1 percent, up to
8.25 percent.
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Note: Under the Budget Control Act of 2011 (Pub. L. 112-25) and effective for loan periods beginning on or after July 1, 2012, graduate and professional students are no longer eligible for Direct Subsidized Loans.
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Program Authority: 20 U.S.C. 1087 et seq.
Dated: January 18, 2013.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
FR Doc. 2013-01421 Filed 1-24-13; 8:45 am
BILLING CODE 4000-01-P
