[Federal Register Volume 85, Number 154 (Monday, August 10, 2020)]
[Notices]
[Pages 48233-48236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17397]
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DEPARTMENT OF EDUCATION
Annual Notice of Interest Rates for Variable-Rate Federal Student
Loans Made Under the Federal Family Education Loan Program Prior to
July 1, 2010
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice.
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Catalog of Federal Domestic Assistance (CFDA) Number: 84.032.
SUMMARY: The Chief Operating Officer for Federal Student Aid announces
the interest rates for loans made under the Federal Family Education
Loan (FFEL) Program that have variable interest rates. The rates
announced in this notice are in effect for the period July 1, 2020,
through June 30, 2021.
FOR FURTHER INFORMATION CONTACT: Travis Sturlaugson, U.S. Department of
Education, 830 First Street NE, 11th Floor, Washington, DC 20202.
Telephone: (202) 377-4174. Email: [email protected].
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.
SUPPLEMENTARY INFORMATION: Section 427A of the Higher Education Act of
1965, as amended (HEA) (20 U.S.C. 1077a), provides formulas for
determining the interest rates charged to borrowers on loans made under
the FFEL Program, including Federal Subsidized and Unsubsidized
Stafford Loans (Stafford Loans), Federal PLUS Loans (PLUS Loans),
Federal Consolidation Loans (Consolidation Loans), and Federal
Supplemental Loans for Students (SLS Loans). No new loans have been
made under the FFEL Program since June 30, 2010.
The FFEL Program includes loans with variable interest rates that
change each year and loans with fixed interest rates that remain the
same for the life of the loan. For loans with a variable interest rate,
the specific interest rate formula that applies to a particular loan
depends on the date of the first disbursement of the loan or, in the
case of a Consolidation Loan, the date the application for the loan was
received. If a loan has a variable interest rate, a new rate is
determined annually and is in effect during the period from July 1 of
one year through June 30 of the following year.
This notice announces the interest rates for variable-rate FFEL
Program loans that will be in effect during the period from July 1,
2020, through June 30, 2021. Interest rates for fixed-rate FFEL Program
loans may be found in a Federal Register notice published on September
15, 2015 (80 FR 55342).
For the majority of variable-rate FFEL Program loans, the annual
interest rate is equal to the lesser of--
(1) The bond equivalent rate of the 91-day Treasury bills auctioned
at the final auction held before June 1 of each year, plus a statutory
add-on percentage; or
(2) A statutorily established maximum interest rate.
The bond equivalent rate of the 91-day Treasury bills auctioned on
May 26, 2020, is 0.132 percent, rounded to 0.13 percent.
For PLUS Loans first disbursed before July 1, 1998, and for all SLS
Loans, the annual interest rate is equal to the lesser of--
(1) The weekly average of the one-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 of each
year, plus a statutory add-on percentage; or
(2) A statutorily established maximum interest rate.
The weekly average of the one-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, 2020,
is 0.17 percent.
For Consolidation Loans that have a variable interest rate, the
annual interest rate for the portion of a Consolidation Loan that
repaid loans other than loans made under the Health Education
Assistance Loans (HEAL) Program is equal to--
(1) The bond equivalent rate of the 91-day Treasury bill auctioned
at the final auction held before June 1 of each year, plus a statutory
add-on percentage; or
(2) A statutorily established maximum interest rate.
If a Consolidation Loan (whether a variable-rate loan or a fixed-
rate loan) repaid loans made under the HEAL Program, the interest rate
on the portion of the Consolidation Loan that repaid
[[Page 48234]]
HEAL loans is a variable rate that is equal to the average of the bond
equivalent rates of the 91-day Treasury bills auctioned for the quarter
ending June 30, plus a statutory add-on percentage. For the portion of
a Consolidation Loan that repaid HEAL loans, there is no maximum
interest rate.
The average of the bond equivalent rates of the 91-day Treasury
bills auctioned for the quarter ending on June 30, 2020, is 0.15
percent.
The statutory add-on percentages and maximum interest rates vary
depending on loan type and when the loan was first disbursed. In
addition, the add-on percentage for certain Stafford Loans is different
depending on whether the loan is in an in-school, grace, or deferment
status, or in any other status. If the interest rate calculated in
accordance with the applicable formula exceeds the statutory maximum
interest rate, the statutory maximum rate applies.
Charts 1 through 4 show the interest rate formulas that are used to
determine the interest rates for all variable-rate FFEL Program loans
and the interest rates that are in effect during the 12-month period
from July 1, 2020, through June 30, 2021. Unless otherwise indicated,
the cohorts shown in each chart include all borrowers, regardless of
prior borrowing.
Chart 1 shows the interest rates for loans with rates based on the
91-day Treasury bill, with the exception of ``converted'' variable-rate
Federal Stafford Loans and certain Federal Consolidation Loans.
Chart 2 shows the interest rates for loans with rates based on the
weekly average of the one-year constant maturity Treasury yield.
Chart 3 shows the interest rates for ``converted'' variable-rate
Federal Stafford Loans. These are loans that originally had varying
fixed interest rates.
Finally, Chart 4 shows the interest rates for variable-rate Federal
Consolidation Loans, and for the portion of any Federal Consolidation
Loan that repaid loans made under the HEAL Program.
Chart 1--Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, and Federal Plus Loans
[Interest rate based on 91-day treasury bill]
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Loan type Cohort.......... 91-day Add-on (%) Maximum rate Interest rate 07/01/20 through 06/
T-bill rate (%) 30/21 (%)
05/26/20
(%)
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Subsidized Stafford........... First disbursed 0.13 1.70 (in-school, 2.30 (any other 8.25 1.83 (in-school, 2.43 (any other
Unsubsidized Stafford......... on/after 07/01/ grace, status). grace, status).
98 and before deferment). deferment).
07/01/06.
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PLUS.......................... First disbursed 0.13 3.10 9.00 3.23.
on/after 07/01/
98 and before
07/01/06.
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Subsidized Stafford........... First disbursed 0.13 2.50 (in-school, 3.10 (any other 8.25 2.63 (in-school, 3.23 (any other
Unsubsidized Stafford......... on/after 07/01/ grace, status). grace, status).
95 and before deferment). deferment).
07/01/98.
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Subsidized Stafford........... First disbursed 0.13 3.10 8.25 3.23.
Unsubsidized Stafford......... on/after 07/01/
94 and before
07/01/95, for a
period of
enrollment that
included or
began on or
after 07/01/94.
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Subsidized Stafford........... First disbursed 0.13 3.10 9.00 3.23.
Unsubsidized Stafford......... on/after 10/01/
92 and before
07/01/94; and
First disbursed
on/after 07/01/
94, for a
period of
enrollment
ending before
07/01/94 (new
borrowers).
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[[Page 48235]]
Chart 2--Federal Plus Loans and SLS Loans
[Interest rate based on weekly average of one-year constant maturity treasury yield]
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Weekly average
of 1-year
constant
maturity Interest rate
Treasury yield Maximum rate 07/01/20
Loan type Cohort for last Add-on (%) (%) through 06/30/
calendar week 21 (%)
ending on or
before 06/26/
20 (%)
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PLUS.......................... First disbursed 0.17 3.10 9.00 3.27
on/after 07/01/
94 and before
07/01/98.
PLUS.......................... First disbursed 0.17 3.10 10.00 3.27
on/after 10/01/
92 and before
07/01/94.
SLS........................... First disbursed 0.17 3.10 11.00 3.27
on/after 10/01/
92, for a
period of
enrollment
beginning
before 07/01/94.
PLUS.......................... First disbursed 0.17 3.25 12.00 3.42
SLS........................... before 10/01/92.
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Chart 3--``Converted'' Variable-Rate Subsidized and Unsubsidized Federal Stafford Loans
[Interest rate based on 91-day treasury bill]
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Interest rate
Original fixed interest 91-day T-bill Maximum rate 07/01/20
Loan type Cohort rate (later converted rate 05/26/20 Add-on (%) (%) through 06/30/
to variable rate) (%) (%) 21 (%)
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Subsidized Stafford.................. First disbursed on or 8.00, increasing to 0.13 3.10 10.00 3.23
Unsubsidized Stafford................ after 07/23/92 and 10.00.
before 07/01/94 (prior
borrowers).
Subsidized Stafford.................. First disbursed on or 9.00................... 0.13 3.10 9.00 3.23
Unsubsidized Stafford................ after 07/23/92 and
before 07/01/94 (prior
borrowers).
Subsidized Stafford.................. First disbursed on or 8.00................... 0.13 3.10 8.00 3.23
Unsubsidized Stafford................ after 07/23/92 and
before 07/01/94 (prior
borrowers).
Subsidized Stafford.................. First disbursed on or 7.00................... 0.13 3.10 7.00 3.23
Unsubsidized Stafford................ after 07/23/92 and
before 07/01/94 (prior
borrowers).
Subsidized Stafford.................. First disbursed on or 8.00, increasing to 0.13 3.25 10.00 3.38
Unsubsidized Stafford................ after 07/23/92 and 10.00.
before 10/01/92 (new
borrowers).
Subsidized Stafford.................. First disbursed on or 8.00, increasing to 0.13 3.25 10.00 3.38
Unsubsidized Stafford................ after 07/01/88 and 10.00.
before 07/23/92.
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Chart 4--Federal Consolidation Loans
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Average of the
bond
equivalent
91-day T-bill rates of the Interest rate
Consolidation loan component Cohort rate 05/26/20 91-day T-bills Add-on (%) Maximum rate (%) 07/01/20
(%) auctioned for through 06/30/
the quarter 21 (%)
ending 06/30/
20 (%)
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Portion of loan that repaid loans Application received on/ 0.13 N/A 3.10 8.25..................... 3.23
other than HEAL loans. after 11/13/97 and
before 10/01/98.
[[Page 48236]]
Portion of the loan that repaid HEAL Application received on/ N/A 0.15 3.00 None..................... 3.15
loans. after 11/13/97.
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Accessible format: 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.
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Program Authority: 20 U.S.C. 1071 et seq.
Mark A. Brown,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2020-17397 Filed 8-7-20; 8:45 am]
BILLING CODE 4000-01-P