[Lender] June 30, 2012 Quarterly Special Allowance Rates

[McCreary, Matt]

The Department of Education (ED) has released the special allowance rates for the quarter ending June 30, 2012.

Commercial Paper

In calculating quarterly Special Allowance commercial paper 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 June 30, 2012, the average rate used to compute the commercial paper rate will be 0.20 percent.

LIBOR Rate

In calculating quarterly Special Allowance LIBOR rates, ED is required to use "the average of the bond equivalent rates of the quotes of the 1-month London Interbank Offered Rate (LIBOR) in effect for each of the days in such quarter as compiled and released by the British Bankers Association" in place of the commercial paper rate.  Therefore, for the quarter ending June 30, 2012, the average rate used to compute the LIBOR rate will be 0.25 percent.

Treasury Bill Rate

In calculating quarterly Special Allowance Treasury Bill rates for loans made prior to January 1, 2000, pursuant to section 438, ED is required to use "the average of the bond equivalent rates of the ninety-one day Treasury bills as published by the Department of the Treasury."  Therefore, for the quarter ending June 30, 2012, the average rate used to compute the Treasury Bill rate will be 0.09 percent.
Click here<http://www.ifap.ed.gov/ffelspecrates/SAPmemo070512.html> to view ED's announcement regarding the new rates. If you have questions, please contact OCAP's Policy, Compliance and Training department at 405.234.4432, 800.247.0420 (toll free) or pct at ocap.org<mailto:pct at ocap.org>. We're here to help!

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