# Presentation: 759164

## Session 66

- ED Forms 2000 for Beginners: Annual Reporting
- Katrina Turner
- Nettie Harding

## Loans In Repayment

**Category****	**** Calculations**
- 	      AR-1 	Loans Guaranteed (Except Federal Consolidation)
- Minus   AR-2	All Loans Cancelled (Except Federal Consolidation)
- Plus     AR-3	Federal Consolidation Loans Guaranteed
- Minus  AR-4 	Federal Consolidation All Loans Cancelled
- Minus  AR-5 	Uninsured Loans
- Plus     AR-6 	Loans Transferred In
- Minus  AR-7 	Loans Transferred Out
- Minus  AR-8 	Default Claims Paid
- Minus  AR-9 	Bankruptcy Claims Paid
- Minus  AR-10 	Death and Disability Claims Paid
- Minus  AR-11 	Closed School/False Certification Claims Paid
- Minus  AR-12 	Loans Paid in Full
- Minus  AR-13 	Federal Stafford and Unsubsidized Stafford Interim Loans
- Minus  AR-14	Total Loans in Deferment Prior to First Payment
-    Equals		Loans in Repayment

## Loans In Repayment (Con’t.)

- 	All amounts are cumulative since the inception of the agency except for line items AR-13 and AR-14 which are amounts as of the end of the current fiscal year.

## Federal Fund Section

- Includes line items:
-  AR-15 through AR- 29
- 	In accordance with 34 CFR 682.419, the Guaranty Agency Federal Fund, is a separate account that contains only funds belonging to the Federal Government.

## AR-15 Beginning Balance (from 9/30/xx)

- AR-15 should be equal to ending balance (AR-26) of the prior year.

## AR-16 Investment Income

- Amount of all investment income recognized in the Federal Fund, including net increases/ decreases in fair value of investments
- Interest activity is reported on AR-16

## AR-17 Reinsurance from ED

- Amount of federal reinsurance from ED
- Net of Refunds
- Overpayments & repurchases for defaults
- Bankruptcies
- Death
- Disability
- Closed Schools or False Certification

## AR-18 Collections of Default Loans- Reinsurance Complement

- Amount of reinsurance complement from default collections
- This amount should equal the twelve months reported fiscal year to date (FYTD) on the monthly GAFR, line items MR-10 through MR-13 for the current FFY.

## AR-19 Federal Default Fee

- Effective for loans guaranteed on or after July 1, 2006.
- The fee is equal to 1 percent of the principal amount of loans guaranteed on or after July 1, 2006

## AR-20 Other Revenue

- Include deferred revenues
- Report itemized entries
- For example:
- Secretary’s Share of default collections (up to 8.5% of collection costs charged the borrower) on default FFEL
- DL Consolidation loans
- OIG interest penalty
- Audit findings
- Usage fees
- These examples are not inclusive

## AR-21 Claims Expensed to Lenders

- Claims expensed during the FFY
- Net of refunds
- Overpayments and repurchases for all FFEL programs loans

## AR-22 Recall of Federal Funds to the Restricted Account

- Amount of the agency’s required share of the reserved fund recall, which was deposit in a restricted account
**No reporting required for this line item**

## AR-23 Transfer to Operating Fund for Default Aversion

- Report net Default Aversion expense recognized for delinquent loans which agencies receive lenders requests for default aversion assistance
- Payment is authorized under the Department’s regulation and guidance for the current FFY
- Amount should  reconcile to line AR-30, Default Aversion Fee Revenue

## AR-24 Transfer to Operating Fund for Account Maintenance Fee

- Report the transfer amount, regardless of the actual transfer, from Federal Fund for AMF for the current FY
- Amount should reconcile to line AR-33, Transfer from Federal Fund for AMF
- FY 07 No Spending Cap
- FY 06
- Spending Cap $220M
- Payment Methodology
- Authority to Transfer Funds Rescinded 7/1/2006

## AR-25 Other Expenses

- Other expenses which are not reported elsewhere, such as:
- provision for loan losses
- SES recognized on collections of defaulted, consolidated,and rehabilitated FFEL loans
- Guarantor retention
- Report itemized entries, such as:
- Prior year accrual, depreciation

## AR-26 Ending Balance

- The ending balance must equal the sum of AR-15 through   AR- 20 minus AR-21 through AR-26 as well as the ending balance on AR-57 (Federal Fund Balance Sheet Section)
**AR-26 must equal AR-57**

## AR-27  Amount Transferred from Federal Fund to Operating Fund for Operating Expenses (Repayable)

- Money borrowed from Federal Fund for operating expenses
**No reporting required for this line item**

## AR- 28 Amount Received from Operating Fund to Repay Advance for Operating Expenses

- Repayment of amounts borrowed from Agency Operating Fund.
**No reporting required for this line item**

## Operating Fund Section

- Includes line items:
- AR- 29 through AR- 42
- 	In accordance to 34 CFR 682.423, the Guaranty Agency Operating Fund is a separate account that contains only funds belonging to the Guaranty Agency

## AR-29 Beginning Balance (from 9/30/xx)

- AR-29 should be equal to ending balance (AR-40) of the prior year.

## AR-30 Default Aversion Fee Revenue

- Report  Default Aversion Fee (DAF) recognized for delinquent loans which agencies receive lenders requests for default aversion assistance
- Payment is authorized under the Department’s regulation and guidance for the current FFY
- Amount should reconcile to line AR-23, Transfer to Operating Fund for Default Aversion

## AR-31 Loan Processing and Issuance Fee Revenue

- Report loan processing and issuance fee revenue recognized

## AR-32 Account Maintenance Fee

- Report account maintenance fees recognized from the Department

## AR-33 Transfer from Federal Fund for Account Maintenance Fee

- Report account maintenance fees recognized subject to Federal Fund settlement (AR-24, Transfer to Operating fund for Account Maintenance Fee) when amount exceeds ED’s budgetary cap
- Authority to Transfer Funds Rescinded 7/1/2006

## AR-34 Collections of Defaulted Loans Less Reinsurance Complement

- Report collection revenue recognized from payments to GA by defaulted borrowers
- Amount reported should be your agency’s share of collections.  Does not include SES of collections
- Include receipts from rehabilitated loan sales and consolidation of defaulted loans under the FFEL program
- Do not include amounts reported in AR-18

## AR-35 Investment Income

- The amount of all investment income recognized in the Operating Fund including net increase (decrease) in fair value of investments

## AR-36 Other Revenue

- Other revenues that are FFEL and non-FFEL not already reported elsewhere Includes:
- Payments received to consolidate loans under the Direct Loan Program
- Net Secretary’s fee
- Report itemized entries Includes:
- Default aversion
- VFA revenue

## AR-37 Collections of Defaulted Loans

- Formally SES was reported in this line item
- Currently Secretary’s Equitable Share should be reported in AR-20, Other Revenue and AR-25, Other Expense
**No reporting required for this line item**

## AR-38 Operating Expense

- Expenses associated with:
- Application processing
- Loan disbursement
- Enrollment and repayment status management
- Default aversion activities
- Claims processing
- Default collection activities
- School and lender training
- Financial aid awareness

## AR-39 Other Expenditures

- Report FFEL and Non FFEL expenses
- Include amounts used for default prevention activities
- Itemized entries may include:
- Administration costs
- Transfers to federal fund
- OIG audit liabilities
- 48-hour rule

## AR-40 Ending Balance

- The ending balance must equal the sum of AR-29 through AR-36 minus AR-37 through AR-39 equals AR-40

## AR-41 Amount Received from Federal Fund for Operating Expenses

- Money received from Federal Fund for operating expenses.
**No reporting required for this line item**

## AR-42 Amount Repaid to Federal Fund For Operating Expenses

- Money repaid to Federal Fund from Operating Fund
**No reporting required for this line item**

## Restricted Account

**The Restricted Accounts AR-43 through AR-47 are obsolete**

## Balance Sheet (Federal Fund)

- Include line items:
- AR-48 through AR-57
- 	The balances reported in this section should reconcile to amounts reported on the Guarantor’s audited financial statements as of the end of the Federal fiscal year 9/30/xx

## AR-48 Cash, Cash Equivalents and Investments

- Report cash, cash equivalents and investment (regardless of maturity date of investments) balances.
- If applicable, report Voluntary Flexible Agreement (VFA) escrow balance

## AR-49 Restricted Account Cash, Cash Equivalent and Investments

- Amount of Federal Fund Cash deposit on the Restricted Account as of October 1
- Do not report escrow balances
**No reporting required**

## AR-50 Net Investment in Property, Plant, Equipment, and Inventory

- Report balances of property, plant, equipment LESS accumulated depreciation

## AR-51 Accounts Receivable from ED

- Report balances owed to the Federal Fund by ED
- For example:
- Reinsurance and other payments

## AR-52 Other Assets

- Report total balances of other current and non-current asset accounts that were not reported in line items AR-48 through AR-51.
- Report itemized entries Includes:
- Guarantee fee receivable
- Receivable from Operating Fund
- Default aversion fee rebate

## AR-53 Accounts Payable, Accrued Expenses and Other Current Liabilities

- Report liabilities for expenses due, other than ED, including amounts due Operating Fund
- Claim payments payable to lenders, if amount is to be paid within 12 months

## AR-54 Accounts Payable to ED

- Report other liabilities for expenses due ED within the next 12 months

## AR-55 Other Liabilities

- Report other liabilities that are not reported elsewhere Including:
- Outstanding federal advances due to Ed
- Remaining reserve return obligation
- To be paid more than 12 months from current date
- FY 07 Recall Amount must be reported in this line item

## AR-56 Allowances and Other Non-Cash Charges to Federal Fund

- Report the net present value:
- Expected future claims
- Net recoveries
- Amount to be paid on guaranteed loans
*MINUS*
- expected reimbursements of these claims
- Other allowances (such as deferred unearned Federal default fees)

## AR-57 Federal Fund Balance

- The Federal Fund balance on an accrual basis for the fiscal year being reported is calculated:
- ADD AR-48 through AR-52 and subtracting AR-53 through AR-56
- This amount should represent the equity on the audited balance sheet section of the Federal Fund.
**AR-57 must equal AR-26**

## Technical Slide

- We appreciate your feedback and comments.
**	****	**
**	****	**Katrina Turner		Nettie Harding
- 		202.377-3311		202-377-3307
- 		 _Katrina.Turner@ed.gov_
- 		 _Nettie.Harding@ed.gov_
- 		202.275.0913