November 1993 Dear Colleague Letter.On page 13 states “…Refinancing of obligations which were originally issued prior to October 1, 1993, does not alter the eligibility of loans made or purchased with funds obtained from the proceeds of the original financing to receive the minimum special allowance.”

Response to Alabama Higher Education Loan Corporation from the Department of Education. DOE responds that refunding bonds retiring three original bond obligations issued prior to October 1, 1993 would continue to be eligible for the 9.5% floor special allowance.

December 1993 Dear Colleague Letter. “…Refinancing of obligations which were originally issued prior to October 1, 1993, does not alter the eligibility of loans made or purchased with funds obtained from the proceeds of the original financing to receive the minimum special allowance.”

June 1995 Dear Colleague Letter. “…Tax exempt loans made or purchased with funds obtained by the holder from the issuance, or refinancing, of obligations originally issued prior to October 1, 1993 (“old money”) will continue to be calculated …or using the floor of 9.5% less the applicable interest rate.

August 3, 1999 Proposed Rule. Stated that loans made or purchased with obligations originally issued on or after October 1, 1993 do not qualify for the 9.5% minimum special allowance rate.

September 2004 United States Government Accountability Office Report.  The report stated, in part, that lenders can issue a new bond, called a refunding bond, to repay the principal, interest, and other costs of an outstanding pre-October 1, 1993 tax-exempt bond, which, based on the interpretation of the HEA, would be eligible for the minimum yield of 9.5%.

January 2005 Dear Colleague Letter.  “…Specifically, the loans for which the special allowance reverts to those usual rates are those that are: …

·        Refinanced after September 30, 2004, and before January 1, 2006, with funds obtained from a source other than funds described in 438(b)(2)(B)(v)(I) of the HEA…”