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Special Allowance Rates

Special Allowance Rates for Stafford and PLUS loans for the Quarter ending March 31, 2009

The applicable Special Allowance Rates for Consolidation loans and for loans made or purchased with tax-exempt funds are available at

The Treasury Bill (T-bill) rate for the quarter ending March 31, 2009 averaged .23%. No loans, made or purchased with taxable funds, in the categories of SA, SB, SD, SE, SG, SJ, and SK, will receive Special Allowance payments.

For the quarter ending March 31, 2009, the U.S. Department of Education (ED) returned to its previous method to determine the average Commercial Paper (CP) Rate by using the previous day's CP Rate when a daily CP Rate was not available. As a result, the average rate used to compute special allowance for the subject quarter was .74%.

When the special allowance formula results in a negative rate on a loan first disbursed on or after April 1, 2006, the lender must remit the excess interest to ED.

Loan Interest Rate Special Allowance Annual Rate Special Allowance Quarterly Rate LaRS (Lender Reporting System) Part III: Special Allowance Category Column E*
3.61% 0.00% 0.00% CA
4.21% 0.00% 0.00% CB
5.01% (PLUS) 0.00% 0.00% CD
5.01% (PLUS)
8.50% (PLUS)
8.50% (PLUS) (5.97%) (1.4925%) CM

* For a detailed explanation of the Special Allowance codes, please view the Common Manual. The Special Allowance codes are located in Appendix A, figure A-5.

+ For entities approved as not-for-profit holders, Special Allowance payments will be based on another code that ED sets in the respective demographic profiles. Please see the March/April 2008 issue of Loan Notes for more information.