The potential interest rate increase affecting new student loans originated via the government direct lending program will not affect existing FFELP SLABS deals, according to an emailed note from Standard & Poor's this morning.

The government lowered the interest rate on these loans to the current 3.4% from 6.8% in stages, the rating agency reported. If there is Congress does not act, the rate will revert back to 6.8% for new loans on July 1.

However, it will not affect the interest rates on direct subsidized loans made to students prior to July 1. It will also not impact FFELP student loans before they were terminated on July 1, 2010, S&P stated.

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