Quarter: December 31, 2011

Posted Date: January 5, 2012

Subject: Federal Family Education Loan Program Special Allowance Rates for the Quarter Ending December 31, 2011

Commercial Paper Rate

In calculating quarterly Special Allowance rates, the Department is required, under section 438(b)(2)(I)(i)(I) of the Higher Education Act (HEA), to determine “the average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period.” For the quarter ending December 31, 2011 the average rate used to compute special allowance will be 0.20 percent.

Treasury Bill Rate

For loans made prior to January 1, 2000, pursuant to section 438, the Special Allowance rate is calculated by using the average of the bond equivalent rates of the ninety-one day Treasury bills as published by the Department of the Treasury. For the quarter ending December 31, 2011, the average of the rates is 0.02 percent.

Attachments

Attachments A, B & C contain the quarterly special allowance rates computed pursuant to section 438. Attachment D contains the bond equivalent rates of the 91-day Treasury Bills auctioned during the quarter.

Accounting Division
Finance Office

**Special Note – The Consolidated Appropriation Act, 2012, provides that a lender can decide if it wants Special Allowance calculated on the basis of the Commercial Paper rate or on the London InterBank Offered Rate (LIBOR) rate. This change effects loans made on or after January 1, 2000. Lenders will have until April 1, 2012 to sign a special waiver electing this change. More information on this option and the special waiver will be provided as soon as possible.

Attachments/Enclosures:

Federal Family Education Loan Program Special Allowance Rates for the Quarter Ending December 31, 2011 in Microsoft Word Format, 807KB, 18 Pages

Federal Family Education Loan Program Special Allowance Rates for the Quarter Ending December 31, 2011 in PDF Format, 300KB, 18 Pages

   

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