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                                                                 Exhibit (d) (2)
                            ADMINISTRATION AGREEMENT

     Agreement made as of December 19, 1997, between VAN KAMPEN AMERICAN
CAPITAL SENIOR FLOATING RATE FUND, a Massachusetts business trust (the "Fund"),
and VAN KAMPEN AMERICAN CAPITAL, INC., a Delaware corporation (the
"Administrator").

     WHEREAS, the Fund intends to operate as a closed-end management investment
company, and is so registered under the Investment Company act of 1940, as
amended ("1940 Act"); and

     WHEREAS, the Fund wishes to retain the Administrator to provide certain
administrative services to the Fund, under the terms and conditions stated
below, and the Administrator is willing to provide such services for the
compensation set forth below;

     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:

     1.   APPOINTMENT.  The Fund hereby appoints the Administrator to
administer the Fund, and the Administrator accepts such appointment and agrees
that it will furnish the services set forth in paragraph 2 below.

     2.   SERVICES AND DUTIES OF THE ADMINISTRATOR.  Subject to the supervision
of the Fund's Board of Trustees (the "Board"), the Administrator will:

                    (a)  Monitor the provisions of the loan agreements and any
               agreements with respect to participations and assignments and be
               responsible for recordkeeping with respect to senior loans in
               the Fund's portfolio;

                    (b)  Prepare all reports required to be sent to Fund
               shareholders, and arrange for the printing and dissemination of
               such reports to shareholders;

                    (c)  Arrange for the dissemination to shareholders of the
               Fund's proxy materials and oversee the tabulation of proxies by
               the Fund's transfer agent;

                    (d)  Negotiate the terms and conditions under which
               custodian services will be provided to the Fund and the fees to
               be paid by the Fund to its custodian (which may or may not be an
               affiliate of the Fund's investment adviser), in connection
               therewith;

                    (e)  Negotiate the terms and conditions under which
               dividend disbursing services will be provided to the Fund, and
               the fees to be paid by the Fund in connection therewith; review
               the provision of dividend disbursing services to the Fund;

                    (f)  Determine the amounts available for distribution as
               dividends and distributions to be paid by the Fund to its
               Shareholders; prepare and arrange for the printing of dividend
               notices to Shareholders; and provide the Fund's dividend
               disbursing agent and custodian with such information as is
               required for such parties to effect the payment of dividends and
               distributions and to implement the Fund's dividend reinvestment
               plan;

                    (g)  Make such reports and recommendations to the Board as
               the Board reasonably requests or deems appropriate; and
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                    (h)  Provide shareholder services to holders or potential
                         holders of the Fund's securities including but not
                         limited to responding to shareholder requests for
                         information.

     3.   PUBLIC INQUIRIES.  The Fund and the Administrator agree that the
Administrator will not be responsible for replying to questions or requests for
information concerning the Fund from shareholders, brokers or the public.  The
Fund will inform the Administrator of the party or parties to whom any such
questions or requests should be directed, and the Administrator will refer such
questions and requests to such party or parties.

     4.   COMPLIANCE WITH THE FUND'S GOVERNING DOCUMENTS AND APPLICABLE LAW.
In all matters relating to the performance of this Agreement, the Administrator
will act in conformity with the Declaration of Trust, By-Laws and registration
statement of the Fund and with the directions of the Board and Fund executive
officers and will conform to and comply with the requirements of the 1940 Act
and all other applicable federal or state laws and regulations.

     5.   SERVICES NOT EXCLUSIVE.  The Administrator's services hereunder are
not deemed to be exclusive, and the Administrator is free to render
administrative or other services to other funds or clients so long as the
Administrator's services under this Agreement are not impaired thereby.

     6.   COMPENSATION.  For the services provided and expenses assumed by the
Administrator under this Agreement, the Fund will pay the Administrator a fee,
accrued daily and paid monthly, at the annualized rate of 0.25% of the Fund's
average weekly managed assets (which, for the purposes of determining such fee,
shall mean the average weekly value of the total assets of the Fund, minus the
sum of the accrued liabilities of the Fund other than the aggregate amount of
any borrowings undertaken by the Fund).

     7.   LIMITATION OF LIABILITY OF THE ADMINISTRATOR.  The Administrator will
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund or its shareholders in connection with the performance of
its duties under this Agreement, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its duties under this Agreement.

     8.   LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE FUND.
Pursuant to the provisions of Article V, Section 5.5 of the Declaration of
Trust as amended or restated as of the date hereof, this Agreement is entered
into by the Board not individually, but as trustees under such Declaration of
Trust and the obligations of the Fund hereunder are not binding upon any such
trustees or Shareholders of the Fund, but bind only the trust estate.

     9.   DURATION AND TERMINATION.  This Agreement will become effective upon
the date hereabove written and shall continue in effect thereafter until
terminated without penalty by the Administrator or the Fund upon 30 days'
written notice to the other and shall automatically terminate in the event of
its assignment as that term is defined in the 1940 Act.

     10.  AMENDMENT OF THIS AGREEMENT.   No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.

     11.  GOVERNING LAW.  This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts and the 1940 Act. To the extent
that the applicable laws of the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
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     12.  MISCELLANEOUS.  The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.  If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.


                                  
Attest:                              VAN KAMPEN AMERICAN CAPITAL
                                     SENIOR FLOATING RATE FUND


  /s/ Weston B. Wetherell            By:     /s/ Edward C.Wood, III
----------------------------               -------------------------------------
Weston B. Wetherell                     Edward C. Wood, III, Vice President and
Assistant Secretary                     Chief Financial Officer


Attest:                              VAN KAMPEN AMERICAN CAPITAL, INC.


  /s/ Weston B. Wetherell            By:   /s/ William R. Molinari
----------------------------              --------------------------------------
Weston B. Wetherell                     William R. Molinari, President
Assistant Secretary