June
2005
DLB-05-12
Summary: Interest Rates for Direct Loan Program Loans for the Period July 1, 2005 through June 30, 2006
Dear Partner:
This bulletin provides
the new interest rates, which will be in effect for the Direct Loan Program
from July 1, 2005 through June 30, 2006.
Attached are charts that
show the new interest rates for Direct Subsidized Loans, Direct Unsubsidized
Loans, Direct Subsidized Consolidation Loans, Direct Unsubsidized Consolidation
Loans, Direct PLUS Loans, and Direct PLUS Consolidation Loans. The charts also
show how the new interest rates were determined using either the 91-day Treasury
bill rate or the weekly average of a 1-year constant maturity Treasury yield,
as published by the Board of Governors of the Federal Reserve System and the
appropriate add-on percentages.
- The interest rates are
based on the interest rate formulas given by statutory and regulatory authority
defined in Section 455(b) of the Higher Education Act of 1965, as amended
(HEA). You can find the regulations for interest rate formulas for student,
parent, and consolidation loans at 34 CFR 685.202(a).
- The interest rates for
all subsidized and unsubsidized loans, and for PLUS loans first disbursed
on or after July 1, 1998, are the bond equivalent rate of 91-day Treasury
bills sold at the final auction before June 1 plus an add-on percentage. The
rate for 91-day Treasury bills auctioned on May 31, 2005 was 2.998 percent,
which rounds to 3.00 percent.
The interest rates for
all PLUS loans first disbursed before July 1, 1998, are 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 and the appropriate add-on percentage of 3.1 percent. On June 27, 2005,
the weekly average of the 1-year constant maturity Treasury yield was 3.40 percent.
Thank you for your ongoing
partnership in the Direct Loan Program.
Sincerely,
Bill Leith
General Manager, Program Operations Channel
Attachments/Enclosures:
DLB-05-12:
Interest Rates for Direct Loan Program Loans for the Period July 1, 2005 through
June 30, 2006 in PDF Format, 90KB, 1 page
Direct
Loan Program's Interest Rates from July 1, 2005 through June 30, 2005 in Microsoft
Word Format, 61KB, 4 pages
Direct
Loan Program's Interest Rates from July 1, 2005 through June 30, 2005 in PDF
Format, 69KB, 4 pages
Posted July 1, 2005 on www.NASFAA.org, Web Site of the
National Association of Student Financial Aid Administrators
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