New Variable Interest Rates - Juny 1, 1997 - June 30, 1998

Federal Stafford Variable Interest Rates

The final auction of 91-day Treasury Bills held prior to June 1 occurred on May 27, 1997, and the bond equivalent rate was 5.16%.

For converted variable-rate 8/10% loans that were subject to "windfall profits" and have been converted to a variable interest rate capped at 10%:

5.16% + 3.25% = 8.41%

For converted variable-rate 7%, 8%, and 9% loans that were subject to "windfall profits" and have been converted to a variable interest rate capped at the original fixed interest rate:

5.16% + 3.1% = 8.26%

Original interest rate         Variable interest rate

7%                                               7%
8%                                                9%
9%                                               8.26%
10%                                             8.26%

For regular variable-rate loans made to "new" borrowers for which the first disbursement is on/after October 1, 1992 but prior to July 1, 1994 or on/after July 1, 1994 for a period of enrollment ending prior to July 1, 1994, capped at 9%:

5.16% + 3.1% = 8.26%

For loans made to all borrowers, regardless of prior borrowing, for periods of enrollment that include or begin on/after July 1, 1994 for which the first disbursement is made on-after July 1, 1994 but prior to July 1, 1995, capped at 8.25%:

5.16 + 3.1% = 8.26%: the rate is 8.25%

For loans made to all borrowers, regardless of prior borrowing, on/after July 1, 1995, but prior to July 1, 1998, capped at 8.25%:

during the in-school, grace and deferment periods

5.16% + 2.5% = 7.66%

during the repayment period, except for deferment periods, capped at 8.25%.

5.16% + 3.1% = 8.26%: the rate is 8.25%

 

Federal PLUS and Federal SLS Variable Interest Rates

The final auction of 52-week Treasury Bills held prior to June 1 occurred on May 22, 1997, and the bond equivalent rate was 5.88%.

*For variable rate PLUS and SLS loans made prior to October 1, 1992, capped at 12%:

5.88% + 3.25% = 9.13%

*For PLUS loans made on/after October 1, 1992 but prior to July 1, 1994, capped at 10%; for PLUS loans made on/after July 1, 1994, but prior to July 1, 1998, capped at 9%; and for SLS loans made on/after October 1, 1992 for a period of enrollment beginning prior to July 1, 1994, capped at 11%:

5.88% + 3.1% = 8.98%

*PLUS/SLS loans are not eligible for special allowance payments during the four quarters ending September 30, 1997, December 31, 1997, March 31, 1998, and June 30, 1998.