OMB
COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
Report No: 574
Date: 02/20/2002
- LAW NUMBER:
P.L. 107-139 (S. 1762)
- BILL TITLE:
Student Loan Interest Rate Amendments
- BILL PURPOSE:
(1) Extends current student loan program borrower interest rate formulas
through June 30, 2006, and establishes fixed borrower interest rates
on loans made thereafter; and (2) permanently extends the availability
to lenders of special allowance payments on these loans based on separate
lender interest rate formulas.
- OMB ESTIMATE:
P.L. 107-139 extends to June 30, 2006, the interest rate formula for
borrowers now in effect in both the FFEL and Direct Loans programs that
otherwise would change to new interest rate formulas on July 1, 2003.
It also permanently extends the existing formulas that govern the interest
rates that lenders earn in the FFEL program, thus enabling lenders to
continue receiving interest subsidies. On net, the changes to borrowers'
interest rates would reduce the cost to the government of consolidation
loans in 2002. In subsequent years, costs to the government are estimated
to increase, due both to lower interest rates paid by students and higher
net subsidies paid to lenders.
|
(Fiscal
years; in millions of dollars) |
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Net
costs.................................... |
-180 |
345 |
875 |
1,005 |
995 |
1,000 |
- CBO ESTIMATE:
|
(Fiscal
years; in millions of dollars) |
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Net
costs.................................... |
-180 |
345 |
875 |
1,005 |
995 |
1,000 |
- EXPLANATION
OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
The estimates
are the same.
- CUMULATIVE
EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
|
(Fiscal
years; in millions of dollars) |
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Outlay
effect.............. |
-180 |
24,173 |
24,413 |
23,832 |
9,219 |
1,000 |
Receipt
effect............ |
0 |
-86,866 |
-106,319 |
-107,744 |
-126,474 |
0 |
Net
costs.................... |
-180 |
111,039 |
130,732 |
131,576 |
135,693 |
1,000 |
NOTE: The
cumulative effect of direct spending and revenue legislation enacted
to date is currently estimated to result in an end-of-session sequester.
The Administration looks forward to working with the Congress to ensure
that an unintended sequester does not occur.
|