Interest Rates for Consolidation Loans to Be Disbursed On or After July 1, 2001 Where Lender Certification Was Received Prior to July 1, 2001

    The U.S. Department of Education (ED) recently released an Announcement, dated June 25, 2001, regarding interest rates for consolidation loans to be disbursed on or after July 1, 2001 where lender certification was received prior to July 1, 2001.  When determining the calculation of the weighted average interest rate for a consolidation loan when the interest rates on loans being consolidated are certified by a holder prior to July 1, 2001 and the Consolidation Loan will be disbursed on or after July 1, 2001, lenders may calculate that rate by using the interest rates that become effective on July 1st for the loans being consolidated, regardless of when the interest rate verification certificate was received.  Using the interest rates that become effective on July 1st for the loans being consolidated provides borrowers with the advantage of the upcoming reduction in the variable interest rate that applies to most loans that can be consolidated.  If, however, a borrower specifically requests that their loan be disbursed prior to July 1, 2001, the lender should, if possible, honor the borrower's request.  In such cases, lenders must determine the weighted average interest rate using the interest rates certified by the holders.

    A copy of this Announcement is available of ED's web site at http://www.ifap.ed.gov/IFAPWebApp/index.jsp.  If you are unable to access ED's web site and would like a hard copy, please contact Stacey Roberts at (801) 321-7211.  Any questions regarding this Bulletin should be directed to the UHEAA Policy and Training Department at (801) 321-7166 or by e-mail at cjudd@utahsbr.edu.