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###### Department of Education

# AGENCY:

Federal Student Aid, Department of Education. 

# ACTION:

Notice of interest rates for the Federal Family Education Loan Program for the period July 1, 2005, through June 30, 2006. 

# SUMMARY:

                        The Chief Operating Officer for Federal Student Aid announces the interest rates for loans made under the Federal Family Education Loan (FFEL)                               ( print page 67998)                            Program for the period July 1, 2005 through June 30, 2006.                     

# FOR FURTHER INFORMATION CONTACT:

Don Watson, U.S. Department of Education, room 114I2, UCP, 400 Maryland Avenue, SW., Washington, DC 20202-5400. Telephone: (202) 377-4008. 

If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339. 

                        Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under                         **FOR FURTHER INFORMATION CONTACT**                        .                     

# SUPPLEMENTARY INFORMATION:

## General 

                    Under title IV, part B of the Higher Education Act of 1965, as amended (HEA), 20 U.S.C. section 1071,                     *et seq.,*                     most loans made to student and parent borrowers under the FFEL Program have variable interest rates.                 

The formulas for determining the interest on variable rate FFEL Program loans are established in section 427A of the HEA (20 U.S.C. 1077a). 

The interest rates on variable-rate loans are determined annually and apply to the following 12-month period beginning July 1 and ending June 30. 

As described below, interest rate caps apply to most FFEL Program loans. 

FFEL interest rate formulas use the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held before June 1 of each year plus a statutorily established add-on to determine the variable interest rate for— 
    - FFEL fixed-rate Stafford loans first disbursed before October 1, 1992, that have been converted to variable-rate loans;
    - All FFEL Subsidized and Unsubsidized Stafford Loans first disbursed on or after October 1, 1992;
    - FFEL PLUS loans first disbursed on or after July 1, 1998; and
    - FFEL Consolidation Loans for which the Consolidation Loan application was received by the lender on or after November 13, 1997, and before October 1, 1998.

The bond equivalent rate of the 91-day Treasury bills auctioned on May 31, 2005, which is used to calculate the interest rates for the one-year period beginning on July 1, 2005, is 2.998 percent, which is rounded to 3.00 percent. 

For FFEL PLUS loans first disbursed before July 1, 1998, interest rates are calculated based on the weekly average of a 1-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. 

The weekly average of the 1-year constant maturity Treasury yield for the last calendar week ending on or before June 27, 2005 is 3.40 percent. 

## Interest Rates for “Converted” Variable-rate FFEL Stafford Loans 

1. Under section 427A(i)(7) of the HEA (20 U.S.C. 1077a (i)(7)) loans that were originally made with a fixed interest rate of eight percent with an increase to ten percent four years after commencement of the repayment period were converted to a variable interest rate that may not exceed ten percent: The interest rate for these loans for the period from July 1, 2005, through June 30, 2006, is 6.25 percent (3.00 percent plus 3.25 percent). 

2. Loans with fixed interest rates of seven percent, eight percent, nine percent, or eight percent with an increase to ten percent four years after commencement of the repayment period, that were subject to the provisions of section 427A(i)(3) of the HEA (20 U.S.C. 1077a(i)(3)) and were converted to variable-rate loans—the interest rate may not exceed seven percent, eight percent, nine percent, or ten percent, respectively: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

## Interest Rates for Variable-Rate FFEL Stafford Loans 

1. FFEL Stafford loans made to “new” borrowers for which the first disbursement was made (a) on or after October 1, 1992, but before July 1, 1994, or (b) on or after July 1, 1994, for a period of enrollment ending before July 1, 1994 (i.e. a late disbursement)—the interest rate may not exceed nine percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

2. FFEL Stafford loans made to all borrowers, regardless of prior borrowing, for periods of enrollment that include or begin on or after July 1, 1994, for which the first disbursement was made on or after July 1, 1994, but before July 1, 1995—the interest rate may not exceed 8.25 percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

3. FFEL Stafford loans made to all borrowers, regardless of prior borrowing, on or after July 1, 1995, but before July 1, 1998—the interest rate may not exceed 8.25 percent: 

(a) During the in-school, grace, or deferment period: The interest rate for the period from July 1, 2005, through June 30, 2006, is 5.50 percent (3.00 percent plus 2.5 percent); and 

(b) During all other periods: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

4. FFEL Stafford loans, first disbursed on or after July 1, 1998, but before July 1, 2006—the interest rate may not exceed 8.25 percent: 

(a) During the in-school, grace, and deferment periods: The interest rate for the period from July 1, 2005, through June 30, 2006, is 4.70 percent (3.00 percent plus 1.7 percent); and 

(b) During all other periods: The interest rate for the period from July 1, 2005, through June 30, 2006, is 5.30 percent (3.00 percent plus 2.3 percent). 

## Interest Rates for FFEL PLUS and FFEL Supplemental Loans for Students (SLS) Loans 

1. Variable-rate FFEL PLUS and FFEL SLS loans first disbursed before October 1, 1992—the interest rate may not exceed 12 percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.65 percent (3.40 percent plus 3.25 percent). 

2. FFEL SLS loans first disbursed on or after October 1, 1992, for a period of enrollment beginning before July 1, 1994—the interest rate may not exceed 11 percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.50 percent (3.40 percent plus 3.10 percent). 

3. FFEL PLUS loans first disbursed on or after October 1, 1992, but before July 1, 1994—the interest rate may not exceed ten percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.50 percent (3.40 percent plus 3.10 percent). 

4. FFEL PLUS loans first disbursed on or after July 1, 1994, but prior to July 1, 1998—the interest rate may not exceed nine percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.50 percent (3.40 percent plus 3.10 percent). 

5. FFEL PLUS loans first disbursed on or after July 1, 1998, and before July 1, 2006—the interest rate may not exceed nine percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

## Interest Rates for FFEL Consolidation Loans 

                    1. FFEL Consolidation loans for which the consolidation loan was made by the lender before July 1, 1994—the interest rate is the weighted average of                           ( print page 67999)                        the interest rates on the loans consolidated, rounded to the nearest whole percent, but may not be less than nine percent.                 

2. FFEL Consolidation loans for which the consolidation loan was made by the lender on or after July 1, 1994, and before November 13, 1997—the interest rate is the weighted average of the interest rates on the loans consolidated, rounded to the nearest whole percent. 

3. FFEL Consolidation loans for which the consolidation loan application was received by the lender on or after November 13, 1997, and before October 1, 1998—the interest rate may not exceed 8.25 percent: The interest rate for the period from July 1, 2005, through June 30, 2006, is 6.10 percent (3.00 percent plus 3.1 percent). 

                    4. FFEL Consolidation loans for which the consolidation loan application was received by the lender on or after October 1, 1998, and before July 1, 2006—the interest rate may not exceed 8.25 percent: The interest rate is the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher                     1/8                     of one percent.                 

5. If a portion of a Consolidation loan is attributable to a loan made under subpart I of part A of title VII of the Public Health Service Act, the maximum interest rate for that portion of a Consolidation loan is determined annually, for each 12-month period beginning on July 1 and ending on June 30. The interest rate equals the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the quarter ending prior to July 1, plus three percent. For the quarter ending before July 1, 2005, the average 91-day Treasury bill rate was 2.943 percent (rounded to 2.94 percent). The maximum interest rate for the period from July 1, 2005, through June 30, 2006, is 5.94 percent (2.94 percent plus 3.0 percent). 

*Electronic Access to This Document:*                     You may view this document, as well as all other documents of this Department published in the                     **Federal Register**                    , in text or Adobe Portable Document Format (PDF) on the Internet at the following site:                     *http://www.ed.gov/​news/​federegister.*

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using 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.gpoaccess.gov/​nara/​index.html*

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

Dated: November 3, 2005. 

Theresa S. Shaw, 

Chief Operating Officer, Federal Student Aid. 

[FR Doc. 05-22365 Filed 11-8-05; 8:45 am] 

BILLING CODE 4000-01-P