34006 Federal Register / Vol. 65, No. 102 / Thursday, May 25, 2000 / Notices

DEPARTMENT OF EDUCATION

William D. Ford Federal Direct Loan

Program

AGENCY: Department of Education.

ACTION: Notice of the annual updates to

the income contingent repayment (ICR)

plan formula.

SUMMARY: The Secretary announces the

annual updates to the ICR Plan formula

for 2000. Under the William D. Ford

Federal Direct Loan (Direct Loan)

Program, borrowers may choose to repay

their student loans under the ICR plan,

which bases the repayment amount on

the borrower’s income, family size, loan

amount, and interest rate. Each year, the

formula for calculating a borrower’s

payment is adjusted to reflect changes

due to inflation. This notice contains

the required updates based on inflation,

which are examples of how the

calculation of the monthly ICR amount

is performed, the income percentage

factors, the constant multiplier chart,

and charts showing sample repayment

amounts. These updates are effective

from July 1, 2000 to June 30, 2001.

FOR FURTHER INFORMATION CONTACT: Don

Watson, U.S. Department of Education,

Room 3045, ROB–3, 400 Maryland

Avenue, SW., Washington, DC 20202–

5400. Telephone: (202) 708–8242. If you

use a telecommunications device for the

deaf (TDD), you may call the Federal

Information Relay Service (FIRS) at 1–

800–877–8339.

Individuals with disabilities may

obtain this document in an alternate

format (e.g., Braille, large print,

audiotape or computer diskette) on

request to the contact person listed in

the preceding paragraph.

SUPPLEMENTARY INFORMATION: Direct

Loan Program borrowers may choose to

repay their Direct Loans under the ICR

Plan. The attachment to this Notice

provides updates to four sources of

information: examples of how the

calculation of the monthly ICR amount

is performed, the income percentage

factors, the constant multiplier chart,

and charts showing sample repayment

amounts.

We have updated the income

percentage factors to reflect changes

based on inflation. We have revised the

income percentage factor table by

changing the dollar amounts of the

incomes shown by a percentage equal to

the estimated percentage change in the

Consumer Price Index for all Urban

Consumers from December 1999 to

December 2000. Further, we provide

examples of monthly repayment amount

calculations and two charts that show

sample repayment amounts for single,

and married or head of household

borrowers at various income and debt

levels based on the updated income

percentage factors.

The updated income percentage

factors, at any given income, may cause

a borrower’s payments to be slightly

lower than they were in prior years.

This updated amount more accurately

reflects the impact of inflation on a

borrower’s current ability to repay.

Electronic Access to This Document

You may review this document, as

well as all other Department of

Education documents published in the

Federal Register, in text or Adobe

Portable Document Format (PDF) on the

Internet at the following sites:

http://ocfo.ed.gov/fedreg.htm

http://www.ed.gov/news.html

To use the PDF, you must have the

Adobe Acrobat Reader, which is

available free at either of the previous

sites. If you have questions about using

the 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.access.gpo.gov/nara/

index.html

(Catalog of Federal Domestic Assistance

Number 84.268, William D. Ford Federal

Direct Loan Program)

Program Authority: 20 U.S.C. 1087 et seq.

Dated: May 19, 2000.

Greg Woods,

Chief Operating Officer.

Attachment: Examples of the

Calculations of Monthly Repayment

Amounts

Example 1. This example assumes you are

a single borrower with $15,000 in Direct

Loans, the interest rate being charged is 8.25

percent, and you have an adjusted gross

income (AGI) of $30,713.

Step 1: Determine your annual payments

based on what you would pay over 12 years

using standard amortization. To do this,

multiply your loan balance by the constant

multiplier for 8.25 percent interest

(0.1315449). The constant multiplier is a

factor used to calculate amortized payments

at a given interest rate over a fixed period of

time. (The 8.25 percent interest rate used in

this example is the maximum interest rate

charged for all Direct Loans excluding Direct

PLUS Loans and may not be your actual

interest rate. You can view the constant

multiplier chart below to determine the

constant multiplier that you should use for

the interest rate on your loan. If your exact

interest rate is not listed, use the next highest

for estimation purposes.)

• 0.1315449 × $15,000 = $1,973.17

Step 2: Multiply the result of Step 1 by the

income percentage factor shown in the

income percentage factor table that

corresponds to your income and the divide

the result by 100. (If your income is not listed

in the income percentage factor table,

calculate the applicable income percentage

factor by following the instructions under

‘‘Interpolation’’ below.):

• 88.77 × $1,973.17 ÷ 100 = $1,751.58

Step 3: Determine 20 percent of your

discretionary income. Because you are a

single borrower, subtract the poverty level for

a family of one, as published in the Federal

Register on February 15, 2000 (65 FR 7555),

from your income and multiply the result by

20%:

• $30,713 ¥ $8,350 = $22,363

• $22,363 × 0.20 = $4,472.60

Step 4: Compare the amount from Step 2

with the amount from Step 3. The lower of

the two will be your annual payment

amount. In this example, you will be paying

the amount calculated under Step 2. To

determine your monthly repayment amount,

divide the annual amount by 12.

• $1,751.58 ÷ 12 = $145.97

Example 2. In this example, you are

married. You and your spouse have a

combined AGI of $58,040 and are repaying

your loans jointly under the ICR plan. You

have no children. You have a Direct Loan

balance of $10,000, and your spouse has a

Direct Loan balance of $15,000. Your interest

rate is 8.25 percent.

Step 1: Add your and your spouse’s Direct

Loan balances together to determine your

aggregate loan balance:

• $10,000 + $15,000 = $25,000

Step 2: Determine the annual payment

based on what you would pay over 12 years

using standard amortization. To do this,

multiply your aggregate loan balance by the

constant multiplier for 8.25 percent interest

(0.1315449). (The 8.25 percent interest rate

used in this example is the maximum interest

rate charged for all Direct Loans excluding

Direct PLUS Loans and may not be your

actual interest rate. You can view the

constant multiplier chart below to determine

the constant multiplier that you should use

for the interest rate on your loan. If your

exact interest rate is not listed, use the next

highest for estimation purposes.)

• 0.1315449 x $25,000 = $3,288.62

Step 3: Multiply the result by the income

percentage factor shown in the income

percentage factor table that corresponds to

your and your spouse’s income and divide

the result by 100. (If your and your spouse’s

aggregate income is not listed in the income

percentage factor table, calculate the

applicable income percentage factor by

following the instructions under

‘‘Interpolation’’ below.):

• 109.40 x $3,288.62 ÷ 100 = $3,597.75

Step 4: Determine 20 percent of your

aggregate income. To do this, subtract the

poverty level for a family of 2, as published

in the Federal Register on February 15, 2000

(65 FR 7555), from your aggregate income

and multiply the result by 20 percent:

• $58,040 ¥ $11,250 = $46,790

• $46,790 x 0.20 = $9,358

Federal Register / Vol. 65, No. 102 / Thursday, May 25, 2000 / Notices 34007

Step 5: Compare the amount from Step 3

with the amount from Step 4. The lower of

the two will be your annual payment

amount. You and your spouse will pay the

amount calculated under Step 3. To

determine your monthly repayment amount,

divide the annual amount by 12.

• $3,597.75 ÷ 12 = $299.81

Interpolation: If your income does not

appear on the income percentage factor table,

you will have to calculate the income

percentage factor through interpolation. For

example, assume you are single and your

income is $25,000.

Step 1: Find the closest income listed that

is less than your income of $25,000 and the

closest income listed that is greater than your

income of $25,000.

Step 2: Subtract the lower amount from the

higher amount (for this discussion, we will

call the result the ‘‘income interval’’):

• $30,713 ¥ $24,452 = $6,261

Step 3: Determine the difference between

the two income percentage factors that are

given for these incomes (for this discussion,

we will call the result, the ‘‘income

percentage factor interval’’):

• 88.77% ¥ 80.33% = 8.44%

Step 4: Subtract from your income the

closest income shown on the chart that is less

than your income of $25,000:

• $25,000 ¥ $24,452 = $548

Step 5: Divide the result by the income

interval determined in Step 2:

• $548 ÷ $6,261 = 0.08753

Step 6: Multiply the result by the income

percentage factor interval:

• 0.08753 x 8.44% = .73875%

Step 7: Add the result to the lower of the

two income percentage factors used in Step

3 to calculate the income percentage factor

interval for $25,000 in income:

• .73878% + 80.33% = 81.07% (rounded to

the nearest hundredth)

The result is the income percentage factor

that will be used to calculate the monthly

repayment amount under the ICR Plan.

INCOME PERCENTAGE FACTORS

[Based on annual income]

Single Married/head of

household

Income Percent

factor Income Percentfactor

8,028 ....... 55.00 8,028 ....... 50.52

11,047 ..... 57.79 12,669 ..... 56.68

14,215 ..... 60.57 15,098 ..... 59.56

17,455 ..... 66.23 19,738 ..... 67.79

20,550 ..... 71.89 24,452 ..... 75.22

24,452 ..... 80.33 30,713 ..... 87.61

30,713 ..... 88.77 38,518 ..... 100.00

38,520 ..... 100.00 46,327 ..... 100.00

46,327 ..... 100.00 58,040 ..... 109.40

55,679 ..... 111.80 77,555 ..... 125.00

71,295 ..... 123.50 104,879 ... 140.60

100,977 ... 141.20 146,678 ... 150.00

INCOME PERCENTAGE FACTORS—

Continued

[Based on annual income]

Single Married/head of

household

Income Percent

factor Income Percentfactor

115,780 ... 150.00 239,683 ... 200.00

206,224 ... 200.00

CONSTANT MULTIPLIER CHART FOR 12-

YEAR AMORTIZATION

Interest rate

(percent)

Annual constant multiplier

7.00 ........................................... 0.1234057

7.25 ........................................... 0.1250107

7.46 ........................................... 0.1263678

7.50 ........................................... 0.1266272

7.75 ........................................... 0.1282550

8.00 ........................................... 0.1298943

8.25 ........................................... 0.1315449

8.38 ........................................... 0.1324076

8.50 ........................................... 0.1332067

8.75 ........................................... 0.1348796

9.00 ........................................... 0.1365637

[FR Doc. 00–13101 Filed 5–24–00; 8:45 am]

BILLING CODE 4000–01–P