[Lender] Special Allowance Rates for the Quarter Ending September 30, 2010

[McCreary, Matt]

The Department of Education (ED) has released the special allowance
rates for the quarter ending September 30, 2010. 

In calculating quarterly Special Allowance rates, ED is required 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 days when a rate
is unavailable, ED has used the previous available rate. 

Therefore, for the quarter ending September 30, 2010, the average rate
used to compute special allowance will be 0.30 percent. 

Pursuant to the Master Participation Agreement(s) under ED's loan
participation purchase program, the 0.30 percent rate is also used to
determine the Participant Yield (i.e., yield owed to ED). The calculated
Participation Yield rate is available in an Ensuring Continued Access to
Student Loans (ECASLA) announcement
<http://federalstudentaid.ed.gov/ffelp/library/EA90.doc> .

For some loans, the special allowance rate is calculated by using the
average of the bond equivalent rates of the 91-day Treasury bills as
published by the Department of the Treasury. For the quarter ending
September 30, 2010, the average of the rates is 0.15 percent. 

Click here <http://ifap.ed.gov/ffelspecrates/SAPmemo100510.html>  to
view ED's announcement regarding the new rates. If you have questions,
please contact OGSLP's Policy, Compliance and Training department at
405.234.4432, 800.247.0420 (toll free) or pct at ogslp.org
<mailto:pct at ogslp.org> . We're here to help!

 

 

Matt McCreary 
Policy Analyst 

Oklahoma Guaranteed Student Loan Program 
A Division of the Oklahoma State Regents for Higher Education 

405-234-4296 - phone 
405-234-4549 - fax 

 

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