BHPR

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To: Lenders and Schools Participating in the Health Education Assistance Loan (HEAL) Program

Subject: Maximum HEAL Interest Rates for the Quarter Ending December 31, 2002.
Lender Policy Memorandum L-2002-9

Section 60.13 (a) (4) of the HEAL Regulations requires the Secretary of Health and Human Services to announce the maximum quarterly interest rate in effect for HEAL loans.

For loans made before January 27, 1981, the variable interest rate is 5 1/4 percent.

For variable rate loans executed on or after January 27, 1981 through October 21, 1985, the interest rate is 5 1/4 percent.

For fixed rate loans executed during the period October 1, 2002 through December 31, 2002, and for variable rate loans executed on or after October 22, 1985, the interest rate is 4 3/4 percent.

The average bond equivalency rate for 91-day U.S. Treasury Bills during the period July 1, 2002 through September 30, 2002 was 1.670 percent.

We have enclosed HEAL quarterly interest rates for the last four quarters. Interest rates since the inception of the program are available upon request.

If you have any questions regarding the HEAL interest or Treasury Bill rates, please do not hesitate to contact Ms. Denise Sorrell at (301) 443-3831.

Nancy Durham
Acting Chief, HEAL Branch
Division of Health Careers Diversity and Development

HEAL Variable Interest Rates
HEALTH EDUCATION ASSISTANCE LOAN (HEAL) PROGRAM
Division of Health Careers Diversity and Development

Rates for Quarter Ending	Loans Made Prior to 01/27/1981	Loans Made On or After 01/27/1981*	Loans Made On or After 10/22/1985**
December 31, 2002	5 1/4 %	5 1/4 %	4 3/4 %
September 30, 2002	5 3/8 %	5 3/8 %	4 7/8 %
June 30, 2002	5 3/8 %	5 3/8 %	4 7/8 %
March 31, 2002	5 1/2 %	5 1/2 %	5 %

*Legislation Amended - 12 percent annual interest cap repealed - quarterly interest rate on loans made on or after 01/27/1981, became a floating rate based on 91-day T-Bill rate plus 3 ½ percent.

**Legislation Amended - Variable interest rate calculation amended - quarterly interest rate on loans made on or after 10/22/1985 is based on loans made on a floating rate of the average 91-day T-Bill rate plus 3 percent.