# Annual Notice of Variable Interest Rates of 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.
Catalog of Federal Domestic Assistance (CFDA) Number: 84.032.
**SUMMARY:**
In accordance with section 427A of the Higher Education Act of 1965, as amended, (HEA), 20 U.S.C. 1077a, the Chief Operating Officer for Federal Student Aid announces the variable interest rates for the period July 1, 2016, through June 30, 2017, for certain loans made under the Federal Family Education Loan (FFEL) Program. The Chief Operating Officer takes this action to give notice of FFEL Program loan variable interest rates to the public.
**DATES:**
This notice is effective October 3, 2016.
**FOR FURTHER INFORMATION CONTACT:**
Rene Tiongquico, U.S. Department of Education, 830 First Street NE., 11th Floor, Washington, DC 20202. Telephone: (202) 377-4270 or by 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.
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 427A of the HEA, provides formulas for determining the interest rates charged to borrowers on loans made under the Federal Family Education Loan (FFEL) Program, including Federal Subsidized and Unsubsidized Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans.
The FFEL Program includes loans with variable interest rates and loans with fixed interest rates. Most loans made under the FFEL 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 427A(l) of the HEA, FFEL Program loans first disbursed on or after July 1, 2006, and before July 1, 2010, have a fixed interest rate. The Chief Operating Officer is discontinuing providing the fixed interest rates for FFEL Program loans first disbursed on or after July 1, 2006 and before July 1, 2010. Interest rates for these loans may be found in a *Federal Register* notice published on September 15, 2015 (80 FR 55342).
Federal Consolidation Loans made prior to November 13, 1997, and on or after October 1, 1998, have a fixed interest rate that is based on the weighted average of the loans that are consolidated.
Interest rates for Federal Consolidation Loans made between November 13, 1997 and September 30, 1998 are provided in Chart 3.
FFEL variable interest rates are based on formulas that use the bond equivalent rate of the 91-day Treasury bills auctioned at the final auction held before June 1 of each year plus a statutorily established add-on. These formulas apply to: All Federal Subsidized and Unsubsidized Stafford Loans first disbursed before October 1, 1992, that have been converted to variable rate loans; all Federal Subsidized and Unsubsidized Stafford Loans first disbursed on or after October 1, 1992, and before July 1, 2006; Federal PLUS Loans first disbursed on or after July 1, 1998, and before July 1, 2006; and Federal Consolidation Loans for which the Federal Consolidation Loan application was received on or after November 13, 1997, and before October 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 31, 2016, which is used to calculate the interest rates on these loans, is 0.345 rounded up to 0.35 percent.
For Federal PLUS loans first disbursed before July 1, 1998, the interest rate 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 27, 2016, which is used to calculate the interest rate on these loans, is 0.55 percent.
This notice includes three charts containing specific information on the calculation of variable interest rates for loans made under the FFEL Program:
Chart 1 contains information on the interest rates for Federal Subsidized and Unsubsidized Stafford Loans that were made as fixed-rate loans, but were subsequently converted to variable-rate loans.
Chart 2 contains information on the interest rates for variable-rate Federal Subsidized and Unsubsidized Stafford Loans.
Chart 3 contains information on the interest rates for variable-rate Federal PLUS Loans, certain Federal Consolidation Loans, and Consolidation Loans that include loans made by the U.S. Department of Health and Human Services under subpart I of part A of title VII of the Public Health Service Act.
| Cohort | First disbursed on or after | First disbursed before | Original fixed interest rate | Max. rate | 91-Day T-bill rate | Margin | Total rate |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 7/1/1988 | 7/23/1992 | 8.00%, increasing to 10.00% | 10.00 | 0.35 | 3.25 | 3.60 | |
| 7/23/1992 | 10/1/1992 | 8.00%, increasing to 10.00% | 10.00 | 0.35 | 3.25 | 3.60 | |
| 7/23/1992 | 7/1/1994 | 7.00% | 7.00 | 0.35 | 3.10 | 3.45 | |
| 7/23/1992 | 7/1/1994 | 8.00% | 8.00 | 0.35 | 3.10 | 3.45 | |
| 7/23/1992 | 7/1/1994 | 9.00% | 9.00 | 0.35 | 3.10 | 3.45 | |
| 7/23/1992 | 7/1/1994 | 8.00%, increasing to 10.00% | 10.00 | 0.35 | 3.10 | 3.45 | |
In Charts 2 and 3, a dagger following a date in a cohort field indicates that the trigger for the rate to apply is a period of enrollment for which the loan was intended either “ending before” or “beginning on or after” the date in the cohort field.
| Cohort | First disbursed on or after | First disbursed before | Max. rate | 91-Day T-bill rate | Margin | In-school, grace, deferment | All other | Total rate | In-school, grace, deferment | All other |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 10/1/1992 | 7/1/1994 | 9.00 | 0.35 | 3.10 | 3.10 | 3.45 | 3.45 | | | |
| 7/1/1994 | 7/1/1994 † | 9.00 | 0.35 | 3.10 | 3.10 | 3.45 | 3.45 | | | |
| 7/1/1994 | 7/1/1995 | 8.25 | 0.35 | 3.10 | 3.10 | 3.45 | 3.45 | | | |
| 7/1/1995 | 7/1/1998 | 8.25 | 0.35 | 2.50 | 3.10 | 2.85 | 3.45 | | | |
| 7/1/1998 | 7/1/2006 | 8.25 | 0.35 | 1.70 | 2.30 | 2.05 | 2.65 | | | |
| Loan type | Cohort | First | First | Max. rate | Index rate | 91-Day | 1-Year | Margin | Total rate |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| PLUS and SLS | | 10/1/1992 | 12.00 | | 0.55 | 3.25 | 3.80 | | |
| SLS | 10/1/1992 | † 7/1/1994 | 11.00 | | 0.55 | 3.10 | 3.65 | | |
| PLUS | 10/1/1992 | 7/1/1994 | 10.00 | | 0.55 | 3.10 | 3.65 | | |
| PLUS | 7/1/1994 | 7/1/1998 | 9.00 | | 0.55 | 3.10 | 3.65 | | |
| PLUS | 7/1/1998 | 7/1/2006 | 9.00 | 0.35 | | 3.10 | 3.45 | | |
| Loan type | Application | Application | Max. rate | 91-Day T-bill rate | Average of | Margin | Total rate |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Consolidation | 11/13/1997 | 10/1/1998 | 8.25 | 0.35 | | 3.10 | 3.45 |
| HHS Portion of Consolidation | 11/13/1997 | | | | 0.27 | 3.00 | 3.27 |
The last row in Chart 3 refers to portions of Federal Consolidation Loans attributable to loans made by the U.S. Department of Health and Human Services under subpart I of part A of title VII of the Public Health Service Act.
*Note:* No new loans have been made under the FFEL Program since June 30, 2010.
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**Program Authority:**
20 U.S.C. 1071 *et seq.*
Dated: September 27, 2016.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.