Page:United States Statutes at Large Volume 100 Part 2.djvu/263

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1365

on and after the first day of the first month beginning after the date of publication of such determination shall be 12 percent per year on the unpaid principal balance of the loan. "(3)

INCREASE OF RATE AFTER INCREASE IN TREASURY BILL

RATES.—If for any 12-month period beginning on or after the date of publication of a determination under paragraph (2), the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 12-month period exceeds 14 percent, the applicable rate of interest for loans made pursuant to section 428A or 428B on and after the first day of the first month beginning after the date of publication of that determination under this paragraph shall be 14 percent per year on the unpaid principal balance of the loan. "(4) AvAiLABiliTY OF VARIABLE RATES.—(A) For any loan made pursuant to section 428A or 428B to cover the cost of instruction for any period of enrollment beginning on or after July 1, 1987, or any loan made pursuant to such section prior to such date that is refinanced pursuant to section 428A(d) or 428B(d), the applicable rate of interest during any calendar year shall be determined under subparagraph (B), except that such rate shall not exceed 12 percent. "(B) For any calendar year, the rate determined under this subparagraph is determined on December 15 preceding such calendar year and is equal to— "(i) the average of the bond equivalent rates of 91-day Treasury bills auctioned during the 12 months ending on November 30 preceding such calendar year; plus "(ii) 3.75 percent. "(C) The Secretary shall determine the applicable rate of interest under subparagraph (B) after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination. "(d) INTEREST RATES FOR N E W BORROWERS AFTER JULY 1, 1988.— Notwithstanding subsections (a) and (b) of this section, with respect to any loan (other than a loan made pursuant to sections 428A, 428B, and 428C) to cover the cost of instruction for any period of enrollment beginning on or after July 1, 1988, to any borrower who, on the date of entering into the note or other written evidence of the loan, has no outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part, the applicable rate of interest shall be— "(1) 8 percent per year on the unpaid principal balance of the loan during the period beginning on the date of the disbursement of the loan and ending 4 years after the commencement of repayment; and "(2) 10 percent per year on the unpaid principal balance of the loan during the remainder of the repayment period. "(e) TREATMENT OF EXCESS INTEREST PAYMENTS ON N E W BORROWER ACCOUNTS RESULTING FROM DECUNE IN TREASURY BILL RATES.—

"(1) IN GENERAL.—If, with respect to a loan for which the applicable interest rate is 10 percent under subsection (d) of this section at the close of any calendar quarter, the sum of the average of the bond equivalent rates of 91-day Treasury bills auctioned for that quarter and 3.25 percent is less than 10

Securities.

Federal Register, publication.

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