2018-23372. Annual Notice of Interest Rates for Fixed-Rate Federal Student Loans Made Under the William D. Ford Federal Direct Loan Program  

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    AGENCY:

    Federal Student Aid, Department of Education.

    ACTION:

    Notice.

    SUMMARY:

    The Acting Chief Operating Officer for Federal Student Aid announces the interest rates for Federal Direct Stafford/Ford Loans (Direct Subsidized Loans), Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans), and Federal Direct PLUS Loans (Direct PLUS Loans) made under the William D. Ford Federal Direct Loan (Direct Loan) Program with first disbursement dates on or after July 1, 2018, and before July 1, 2019.

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    FOR FURTHER INFORMATION CONTACT:

    Jon Utz, U.S. Department of Education, 830 First Street NE, 11th Floor, Washington, DC 20202. Telephone: (202) 377-4040 or by email: Jon.Utz@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.

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    SUPPLEMENTARY INFORMATION:

    Catalog of Federal Domestic Assistance (CFDA) Number: 84.268.

    Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans (collectively referred to as “Direct Loans”) may have either fixed or variable interest rates, depending on when the loan was first disbursed or, in the case of a Direct Consolidation Loan, when the application for the loan was received. Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Start Printed Page 53865July 1, 2006, and Direct Consolidation Loans for which the application was received on or after February 1, 1999, have fixed interest rates that apply for the life of the loan. Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed before July 1, 2006, and Direct Consolidation Loans for which the application was received before February 1, 1999, have variable interest rates that are determined annually and are in effect during the period from July 1 of one year through June 30 of the following year.

    This notice announces the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans with first disbursement dates on or after July 1, 2018, and before July 1, 2019, and provides interest rate information for other fixed-rate Direct Loans. Interest rate information for variable-rate Direct Loans is announced in a separate Federal Register Notice.

    Fixed-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After July 1, 2013

    Section 455(b) of the Higher Education Act of 1965, as amended (HEA) (20 U.S.C. 1087e(b)) includes formulas for determining the interest rates for all Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2013. The interest rate for these loans is a fixed rate that is determined annually for all loans first disbursed during any 12-month period beginning on July 1 and ending on June 30. The rate is equal to the high yield of the 10-year Treasury notes auctioned at the final auction held before June 1 of that 12-month period, plus a statutory add-on percentage that varies depending on the loan type and, for Direct Unsubsidized Loans, whether the loan was made to an undergraduate or graduate student. The calculated interest rate may not exceed a maximum rate specified in the HEA. If the interest rate formula results in a rate that exceeds the statutory maximum rate, the rate is the statutory maximum rate. Loans first disbursed during different 12-month periods that begin on July 1 and end on June 30 may have different interest rates, but the rate determined for any loan is a fixed interest rate for the life of the loan.

    On May 9, 2018, the United States Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 2.995 percent.

    Chart 1 shows the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2018, and before July 1, 2019.

    Chart 1—Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Plus Loans First Disbursed on or After 07/01/2018 and Before 07/01/2019

    Loan typeBorrower type10-year treasury note high yield 05/09/2018 (%)Add-on (%)Maximum rate (%)Fixed interest rate (%)
    Direct Subsidized LoansUndergraduate students2.9952.058.255.05
    Direct Unsubsidized Loans
    Direct Unsubsidized Loans 1Graduate and professional students2.9953.609.506.60
    Direct PLUS LoansParents of dependent undergraduate students2.9954.6010.507.60
    Graduate and professional students

    For reference, Chart 2 compares the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed during the period July 1, 2018, through June 30, 2019, with the fixed interest rates for loans first disbursed during each previous 12-month period from July 1, 2013, through June 30, 2018.

    Chart 2—Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Plus Loans First Disbursed on or After 07/01/2013 and Before 07/01/2019

    First disbursedFixed interest rates (%)Federal Register Notice
    On/afterBeforeDirect subsidized loans Direct unsubsidized loans (undergraduate students)Direct unsubsidized loans (graduate or professional students)Direct PLUS loans
    07/01/201807/01/20195.056.607.60N/A.
    07/01/201707/01/20184.456.007.0082 FR 29062 (June 27, 2017).
    07/01/201607/01/20173.765.316.3181 FR 38159 (June 13, 2016).
    07/01/201507/01/20164.295.846.8480 FR 42488 (July 17, 2015).
    07/01/201407/01/20154.666.217.2179 FR 37301 (July 1, 2014).
    07/01/201307/01/20143.865.416.4178 FR 59011 (September 25, 2013).
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    Fixed-Rate Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First Disbursed on or After July 1, 2006, and Before July 2, 2013

    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2006, and before July 1, 2013, have fixed interest rates that are specified in section 455(b) of the HEA (20 U.S.C. 1087e(b)). Chart 3 shows the interest rates for these loans.

    Chart 3—Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Plus Loans First Disbursed on or After 07/01/2006 and Before 07/01/2013

    Loan typeBorrower typeFirst disbursed on/afterFirst disbursed beforeInterest rate (%)
    SubsidizedUndergraduate students07/01/201107/01/20133.40
    SubsidizedUndergraduate students07/01/201007/01/20114.50
    SubsidizedUndergraduate students07/01/200907/01/20105.60
    SubsidizedUndergraduate students07/01/200807/01/20096.00
    SubsidizedUndergraduate students07/01/200607/01/20086.80
    SubsidizedGraduate or professional students07/01/20062 07/01/20126.80
    UnsubsidizedUndergraduate and graduate or professional07/01/200607/01/20136.80
    PLUSGraduate or professional students and parents of dependent undergraduate students07/01/200607/01/20137.90

    Fixed-Rate Direct Consolidation Loans

    Section 455(b) of the HEA specifies that all Direct Consolidation Loans for which the application was received on or after February 1, 1999, have a fixed interest rate that is equal to the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent. For Direct Consolidation Loans for which the application was received on or after February 1, 1999, and before July 1, 2013, the interest rate may not exceed 8.25 percent. However, under 455(b) of the HEA the 8.25 percent interest rate cap does not apply to Direct Consolidation Loans made based on applications received on or after July 1, 2013. Chart 4 shows the interest rates for fixed-rate Direct Consolidation Loans.

    Chart 4—Direct Consolidation Loans Made Based on Applications Received on or After 02/01/1999

    Application receivedInterest rate (%)Maximum interest rate (%)
    On/after 07/01/2013Weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percentNone
    On/after 02/01/1999 and before 07/01/2013(same as above)8.25

    Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) by contacting the person listed under FOR FURTHER INFORMATION CONTACT.

    Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations via the Federal Digital System at: www.gpo.gov/​fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

    You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

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

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    Dated: October 22, 2018.

    James F. Manning,

    Acting Chief Operating Officer, Federal Student Aid.

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    Footnotes

    1.  Graduate and professional students are not eligible to receive Direct Subsidized Loans.

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    2.  Effective for loan periods beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Direct Subsidized Loans.

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    [FR Doc. 2018-23372 Filed 10-24-18; 8:45 am]

    BILLING CODE 4000-01-P

Document Information

Published:
10/25/2018
Department:
Education Department
Entry Type:
Notice
Action:
Notice.
Document Number:
2018-23372
Pages:
53864-53866 (3 pages)
PDF File:
2018-23372.pdf