Page:United States Statutes at Large Volume 112 Part 2.djvu/796

 112 STAT. 1680 PUBLIC LAW 105-244 —OCT. 7, 1998 Federal Register, publication. except that such rate shall not exceed 8.25 percent. "(2) IN SCHOOL AND GRACE PERIOD RULES. —Notwithstanding subsection (h), with respect to any loan under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, the applicable rate of interest for interest which accrues— "(A) prior to the beginning of the repayment period of the loan; or "(B) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 427(a)(2)(C) or428(b)(l)(M), shall be determined under paragraph (1) by substituting *1.7 percent' for *2.3 percent'. "(3) PLUS LOANS. — Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, the applicable rate of interest shall be determined under paragraph (1)— "(A) by substituting *3.1 percent' for '2.3 percent'; and "(B) by substituting '9.0 percent' for '8.25 percent'. "(4) CONSOLIDATION LOANS.—With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after October 1, 1998, and before July 1, 2003, the applicable rate of interest shall be at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of— "(A) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher oneeighth of 1 percent; or "(B) 8.25 percent. "(5) CONSULTATION. —The Secretary shall determine the applicable rate of interest under this subsection 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.". (2) CONFORMING AMENDMENT.—Section 428B(d)(4) (20 U.S.C. 1078-2(d)(4)) is amended by striking "section 427A(c)'' and inserting "section 427A". (b) SPECIAL ALLOWANCES. — (1) AMENDMENT.— Section 438(b)(2) (20 U.S.C. 1087-l(b)(2)) is amended by adding at the end the following: "(H) LOANS DISBURSED ON OR AFTER OCTOBER i, 1998, AND BEFORE JULY 1, 2003.— "(i) IN GENERAL.— Subject to paragraph (4) and clauses (ii), (iii), and (iv) of this subparagraph, and except as provided in subparagraph (B), the special allowance paid pursuant to this subsection on loans for which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, shall be computed— "(I) by determining the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 3-month period;

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