Yeah, I went back to visit the Higher Education Act again, and finally found the subsection where this "80 basis point" reduction is authorized by Congress:

(This is from 20 United States Code, section 1087(e). Forgive my lack of "blue book" citation, fellow lawyers!)

<<(7) Repayment incentives

(A) In general

Notwithstanding any other provision of this part, the
Secretary is authorized to prescribe by regulation such
reductions in the interest rate paid by a borrower of a loan
made under this part as the Secretary determines appropriate to
encourage on-time repayment of the loan. Such reductions may
be offered only if the Secretary determines the reductions are
cost neutral and in the best financial interest of the Federal
Government. Any increase in subsidy costs resulting from such
reductions shall be completely offset by corresponding savings
in funds available for the William D. Ford Federal Direct Loan
Program in that fiscal year from section 1087h of this title
and other administrative accounts.

(B) Accountability

Prior to publishing regulations proposing repayment
incentives, the Secretary shall ensure the cost neutrality of
such reductions. The Secretary shall not prescribe such
regulations in final form unless an official report from the
Director of the Office of Management and Budget to the
Secretary and a comparable report from the Director of the
Congressional Budget Office to the Congress each certify that
any such reductions will be completely cost neutral. Such
reports shall be transmitted to the Committee on Labor and
Human Resources of the Senate and the Committee on Education
and the Workforce of the House of Representatives not less than
60 days prior to the publication of regulations proposing such
reductions.>>

So it sounds like the 80 basis points was up to Secretary Reilly from the Clinton Administration, and Secretary Paige either can't or won't change it before September 30, 2001. But it looks like the statute has a lot of leeway for the government to say: "hey, this discount is costing us money!" (even if it really isn't) and discontinue it. Nowhere does it say that the incentive discount HAS to happen, only that the Secretary is authorized to offer one.