46 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Stafford loan. The other three loan programs are available 

to borrowers at all income levels. Loans can be used only 

to meet qualified educational expenses. 

The FFEL program, authorized by the HEA, operates 

through state and private nonprofit guaranty agencies that 

provided loan guarantees on loans made by private lenders 

to eligible students. The SAFRA Act, which was included 

in the Health Care and Education Reconciliation Act of 

2010, stated that no new FFEL loans would be made 

effective July 1, 2010. FFEL program receivables include 

defaulted FFEL loans and acquired FFEL loans. Acquired 

FFEL loans include student loan assets acquired using 

temporary authority provided in the Ensuring Continued 

Access to Student Loans Act of 2008 (ECASLA). ECASLA 

gave the Department temporary authority to purchase 

FFEL loans and participation interests in those loans. 

The Department implemented three activities under this 

authority: loan purchase commitments; purchases of loan 

participation interests; and a put, or forward purchase 

commitment, with an Asset-Backed Commercial Paper 

(ABCP) Conduit. This authority expired after September 

30, 2010; as a result, loan purchase commitments and 

purchases of loan participation interests concluded. 

However, under the terms of the Put Agreement with 

the conduit, ABCP Conduit activity ceased operations in 

January 2014.

The Department also administers other credit programs 

for higher education. These include the Federal Perkins 

Loan program, the Teacher Education Assistance for 

College and Higher Education Grant (TEACH) program, 

the Health Education Assistance Loan (HEAL) program, 

and facilities loan programs that include the Historically 

Black Colleges and Universities (HBCU) Capital 

Financing program, along with low-interest loans to 

institutions of higher education (IHEs) for the building 

and renovating of their facilities. (See Notes 5 and 10)

Grant Programs. The Department has more than 100 

grant programs. The three largest grant programs are 

Title I of the Elementary and Secondary Education Act, 

Federal Pell Grant (Pell Grant), and the Individuals with 

Disabilities Education Act (IDEA) grants. In addition, 

the Department offers other discretionary grants under 

FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS 

ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30, 2019

NOTE 1. Summary of Significant 

Accounting Policies

REPORTING ENTITY AND PROGRAMS

The U.S. Department of Education (the Department), 

a cabinet-level agency of the executive branch of the 

U.S. government, was established by Congress under the 

Department of Education Organization Act (Public Law 96-

88), which became effective on May 4, 1980. The mission 

of the Department is to promote student achievement 

and preparation for global competitiveness by fostering 

educational excellence and ensuring equal access. 

The Department is a component of the U.S. Government. 

For this reason, some of the assets and liabilities reported 

by the Department may be eliminated for Governmentwide reporting because they are offset by assets and 

liabilities of another U.S. Government entity. These 

financial statements should be read with the realization 

that they are for a component of the U.S. Government, a 

sovereign entity. 

The Department is primarily responsible for administering 

federal student loan and grant programs and provides 

technical assistance to loan and grant recipients and 

other state and local partners. The largest portions of the 

Department’s financial activities relate to the execution of 

loan and grant programs which are discussed below.

Federal Student Loan Programs. The Department 

administers direct loan, loan guarantee, and other student 

aid programs to help students and their families finance the 

cost of postsecondary education. These include the William 

D. Ford Federal Direct Loan (Direct Loan) program and 

the Federal Family Education Loan (FFEL) program.

The Direct Loan program, added to the Higher Education 

Act of 1965 (HEA) in 1993 by the Student Loan Reform 

Act of 1993, authorizes the Department to make loans 

through participating schools to eligible undergraduate 

and graduate students and their parents. The Direct Loan 

program offers four types of loans: Stafford, Unsubsidized 

Stafford, Parent Loan for Undergraduate Students (PLUS), 

and Consolidation. Evidence of financial need is required 

for an undergraduate student to receive a subsidized 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 47

 Work-study payments, which will continue even if 

students can no longer work on-site.

 Pell Grants, financial aid, and loans originated for this 

term, which students who have had to leave college 

campuses will not have to pay back. Moreover, none 

of this aid will count against students’ financial aid 

lifetime limits.

 Waiving Satisfactory Academic Progress requirements 

will help to ensure that students do not lose academic 

standing and the ability to receive federal financial 

student aid.

 Tax credits that incentivize employers to help pay for 

student loans.

PROGRAM OFFICES

The Department has three major program offices that 

administer most of its loan and grant programs: 

 Federal Student Aid (FSA) administers financial 

assistance programs for students pursuing 

postsecondary education and makes available federal 

grants, direct loans, and work-study funding to eligible 

undergraduate and graduate students.

 The Office of Elementary and Secondary Education 

(OESE) assists state education agencies (SEAs) and local 

educational agencies (LEAs) to improve the achievement 

of preschool, elementary, and secondary school students, 

helps ensure equal access to services leading to such 

improvement—particularly children with high needs, 

and provides financial assistance to LEAs whose local 

revenues are affected by federal activities.

 The Office of Special Education and Rehabilitative 

Services (OSERS) supports programs that help provide 

early intervention and special education services to 

children and youth with disabilities. OSERS also 

supports programs for the vocational rehabilitation 

of youth and adults with disabilities, including 

preemployment transition services and other transition 

services designed to assist students with disabilities to 

enter postsecondary education and achieve employment.

Other offices that administer programs and provide 

leadership, technical assistance, and financial support to 

state and LEAs and IHEs for reform, strategic investment, 

and innovation in education include: the Office of 

a variety of authorizing legislation awarded using a 

competitive process, and formula grants using formulas 

determined by Congress with no application process. (See 

Note 10)

COVID-19. Congress has passed three coronavirus 

disease 2019 (COVID-19) relief bills: the Coronavirus 

Preparedness and Response Supplemental Appropriations 

Act of 2020: the Families First Coronavirus Response Act: 

and the Coronavirus Aid, Relief, and Economic Security 

(CARES) Act. The CARES Act totaled roughly $2 trillion 

dollars and included $31 billion for educational purposes. 

The Department was tasked with promptly disbursing 

these funds through a variety of grant programs, while 

ensuring the transparency and accountability of every 

dollar spent.

The largest component of this funding established a 

$30.75 billion state stabilization fund for K-12 and higher 

education. This fund is comprised of categories including 

(1) the Elementary and Secondary School Emergency 

Relief Fund, (2) the Higher Education Emergency Relief 

Fund, (3) the Governor’s Emergency Education Relief 

Fund, and (4) funds provided for Minority Serving 

Institutions (MSIs), Historically Black Colleges and 

Universities, and Schools serving low-income students. All 

of the Education Stabilization Fund is being distributed 

to recipients through various grant programs. The 

Department transferred $154 million of the fund to the 

Department of the Interior to be administered by the 

Bureau of Indian Education. (See Notes 3, 10, & 11)

The CARES Act also provides support for student loan 

borrowers primarily by suspending nearly all federal loan 

payments until September 30, interest free. The Department 

extended certain provisions of the student loan deferrals not 

covered by the CARES Act to defaulted guaranteed loans 

held by the Department. The Administration subsequently 

issued a Presidential Memorandum which extended the 

student loan deferrals for an additional three months 

through December 31, 2020. The Department also stopped 

all federal wage garnishments and collection actions for 

borrowers with federally held loans in default. Funding 

for the student debt provisions of the CARES Act and the 

Presidential Memorandum are provided through indefinite 

appropriations. (See Notes 5, 10 and 11) 

Other regulatory flexibilities and incentives provided in the 

CARES Act to help students through COVID-19 include:

 Federal Supplemental Educational Opportunity Grants 

(SEOG) to provide emergency aid to students.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

48 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Federal Credit Reform Act of 1990 (FCRA). The purpose 

of the FCRA is to record the lifetime subsidy cost of 

direct loans and loan guarantees, in present value terms, 

at the time the loan is disbursed (subsidy). Components 

of subsidy costs for loans and guarantees include defaults 

(net of recoveries); contractual payments to third-party 

private loan collectors who receive a set percentage of 

amounts collected; and, as an offset, origination and 

other fees collected. For direct loans, the difference 

between interest rates incurred by the Department on its 

borrowings from the Department of Treasury (Treasury) 

and interest rates charged to particular borrowers is also 

subsidized (or may provide an offset to subsidy if the 

Department’s rate is less). 

Under the FCRA, subsidy cost is estimated using the 

net present value of future cash flows to and from the 

Department. In accordance with the FCRA, credit 

programs either estimate a subsidy cost to the government 

(a “positive” subsidy), breakeven (zero subsidy cost), 

or estimate a negative subsidy cost. Negative subsidy 

occurs when the estimated cost of providing loans to 

borrowers from Treasury borrowing, collection costs, and 

loan forgiveness is less than the value of collections from 

borrowers for interest and fees, in present value terms.

Subsidy cost is an estimate of the present value cost of 

providing direct loans, but excludes the administrative 

costs of issuing and servicing the loans. The Department 

estimates subsidy expense using a set of econometric and 

financial models, as well as cash flow models. 

The Department estimates subsidy costs annually for new 

loans disbursed in the current year; updates to the previous 

cost estimates for outstanding loans disbursed in prior 

years (subsidy re-estimates); and updates to previous cost 

estimates based on new legislation or other government 

actions that change the terms of existing loans (loan 

modifications) which alter the estimated subsidy cost and 

the present value of outstanding loans. Loan modifications 

can also include modification adjustment gains and losses 

to account for the difference between the discount rate 

used to calculate the cost of the modification and the 

interest rate at which the cohort pays or earns interest.

The subsidy costs of direct loan and loan guarantee 

programs are budgeted and tracked by the fiscal year in 

which the loan award is made or the funds committed. 

Such a grouping of loans or guarantees is referred to as a 

“cohort.” A cohort is a grouping of direct loans obligated 

or loan guarantees committed by a program in the same 

year even if disbursements occur in subsequent years.

Career, Technical, and Adult Education (OCTAE); 

Office of Postsecondary Education (OPE); Institute of 

Education Sciences (IES); and Office of English Language 

Acquisition (OELA). In addition, the Office for Civil 

Rights (OCR) works to ensure equal access to education, 

promotes educational excellence throughout the nation, 

and serves student populations facing discrimination 

and the advocates and institutions promoting systemic 

solutions to civil rights issues. (See Note 10)

BA SIS OF ACCOU NT I NG 

AND PRESENTATION

These financial statements were prepared to report the 

financial position, net cost of operations, changes in net 

position, and budgetary resources of the Department, as 

required by the Chief Financial Officers Act of 1990 and 

the Government Management Reform Act of 1994. The 

financial statements were prepared from the books and 

records of the Department, in accordance with Generally 

Accepted Accounting Principles (GAAP) accepted 

in the U.S. for federal entities, issued by the Federal 

Accounting Standards Advisory Board (FASAB), and 

the Office of Management and Budget (OMB) Circular 

A-136, Financial Reporting Requirements, as revised. These 

financial statements are different from the financial reports 

prepared by the Department pursuant to OMB directives 

that are used to monitor and control the use of budgetary 

resources. FSA also issues audited stand-alone financial 

statements which are included in their annual report.

The accounting structure of federal agencies is designed to 

reflect both accrual and budgetary accounting transactions. 

Under the accrual method of accounting, revenues are 

recognized when earned and expenses are recognized when 

a liability is incurred, without regard to receipt or payment 

of cash. Budgetary accounting facilitates compliance with 

legal constraints and controls over the use of federal funds.

Intradepartmental transactions and balances have been 

eliminated from the consolidated financial statements. 

Accounting standards require all reporting entities 

to disclose that accounting standards allow certain 

presentations and disclosures to be modified, if needed, to 

prevent the disclosure of classified information.

ACCOU NT I NG FOR FEDER A L 

CR EDIT PROGR A MS 

The Department’s accounting for its loan and loan 

guarantee programs is based on the requirements of the 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 49

year. Loans awarded are typically disbursed in multiple 

installments over an academic period. As a result, loans 

may be disbursed over multiple fiscal years. Loan awards 

may not be fully disbursed due to students leaving or 

transferring to other schools. The Department’s obligation 

estimate may also not reflect the actual amount of awards 

made. Based on historical averages, the Department expects 

approximately 8.2 percent of the amount obligated for new 

loan awards will not be disbursed.

When a loan is placed in deferment or forbearance, loan 

repayment is temporarily suspended with the length of 

postponement different for each borrower. Interest accrues 

while a loan is in deferment or forbearance. Loans are 

cancelled if a person dies, meets disability requirements, 

or occasionally through the bankruptcy courts. Loans are 

also cancelled through the Public Service Loan Forgiveness 

(PSLF) Program, which forgives the remaining balance 

on a direct loan after 120 qualifying monthly payments 

are made. These payments must be made under a 

qualifying repayment plan while working full-time for a 

qualifying employer. In addition, the Department offers 

the Pay As You Earn (PAYE) program. This student loan 

repayment program is designed to help borrowers who 

struggle to make their normal student loan payments. 

The plan allows payments to be limited to 10 percent of 

discretionary income if qualifications are met. Under the 

PAYE program, if all requirements are met, forgiveness of 

the remaining balance of a student loan is possible after 20 

years of consistent payments.

BUDGETARY RESOURCES

Budgetary resources are amounts available to enter into 

new obligations and to liquidate them. The Department’s 

budgetary resources include unobligated balances of 

resources from prior years and new resources, which 

include appropriations, authority to borrow from Treasury, 

and spending authority from collections.

Borrowing authority is an indefinite budgetary resource 

authorized under the FCRA. This resource, when realized, 

finances the unsubsidized portion of the Direct Loan, 

FFEL, and other loan programs. In addition, borrowing 

authority is requested to cover the cost of the initial loan 

disbursement as well as any related negative subsidy to be 

transferred to Treasury General Fund receipt accounts. 

Treasury prescribes the terms and conditions of borrowing 

authority and lends to the financing account amounts as 

appropriate. Amounts borrowed, but not yet disbursed, are 

included in uninvested funds and earn interest. Treasury 

uses the same weighted average interest rates for both 

In order to account for the change in the net present 

value of the loan portfolio over time, the subsidy cost 

is “amortized” each year. Amortization accounts for the 

differences in interest rates, accruals, and cash flows 

over the life of a cohort, ensuring that cost is reflected 

in subsidy estimates and re-estimates. Amortization of 

subsidy is calculated as the difference between interest 

received from borrowers and Treasury (on uninvested 

funds) and interest paid to Treasury on borrowings. 

The FCRA establishes the use of financing, program, 

and Treasury General Fund receipt accounts for loan 

guarantees committed and direct loans obligated after 

September 30, 1991. 

 Financing accounts borrow funds from Treasury, 

make direct loan disbursements, collect fees from 

lenders and borrowers, pay claims on guaranteed 

loans, collect principal and interest from borrowers, 

earn interest from Treasury on any uninvested funds, 

and transfer excess subsidy to Treasury General Fund 

receipt accounts. Financing accounts are presented 

separately in the combined statements of budgetary 

resources (SBR) as non-budgetary credit reform 

accounts to allow for a clear distinction from all other 

budgetary accounts. This facilitates reconciliation of 

the SBR to the Budget of the United States Government

(President’s Budget).

 Program accounts receive and obligate appropriations 

to cover the positive subsidy cost of a direct loan 

or loan guarantee when the loan is approved and 

disburses the subsidy cost to the financing account 

when the loan is issued. Program accounts also receive 

appropriations for administrative expenses.

 Treasury General Fund receipt accounts receive 

amounts paid from financing accounts when there 

are negative subsidies for new loan disbursements or 

downward re-estimates of the subsidy cost of existing 

loans. (See Notes 12 and 13) 

The Department records an obligation each year for direct 

loan awards to be made in a fiscal year based on estimates 

of schools’ receipt of aid applications. The Department 

advances funds to schools based on these estimates. 

Promissory notes are signed when schools reach individual 

agreements with borrowers and the schools subsequently 

report each disbursement of advanced funds to the 

Department. A new promissory note is usually not required 

for students in the second or later year of study. Half of all 

loan awards are issued in the fourth quarter of the fiscal 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

50 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

current Budget of the United States Government presumes 

all programs continue in accordance with congressional 

budgeting rules. (See Note 12)

ENTITY AND NON-ENTITY ASSETS

Assets are classified as either entity or non-entity assets. 

Entity assets are those that the Department has authority 

to use for its operations. Non-entity assets are those 

held by the Department but not available for use in its 

operations. Non-entity assets are offset by liabilities to 

third parties and have no impact on net position. The 

Department combines its entity and non-entity assets on 

the balance sheets and discloses its non-entity assets in the 

notes. (See Note 2)

FUND BALANCE WITH TREASURY

Fund Balance with Treasury includes amounts available to 

pay current liabilities and finance authorized purchases, 

as well as funds restricted until future appropriations 

are received. Treasury processes cash receipts and cash 

disbursements for the Department. The Department’s 

records are reconciled with Treasury’s records. (See Note 3)

ACCOUNTS RECEIVABLE

Accounts receivable are amounts due to the Department 

from the public and other federal agencies. Receivables 

from the public result from overpayments to recipients 

of grants and other financial assistance programs, as well 

as disputed costs resulting from audits of educational 

assistance programs. Amounts due from federal agencies 

result from reimbursable agreements entered into by 

the Department with other agencies to provide various 

goods and services. Accounts receivable are reduced to net 

realizable value by an allowance for uncollectible amounts. 

The estimate of an allowance for loss on uncollectible 

accounts is based on the Department’s experience in the 

collection of receivables and an analysis of the outstanding 

balances. (See Note 4)

GUA R A N T Y AGE NCI E S’ 

FEDERAL FUNDS

Guaranty Agencies’ Federal Funds are primarily comprised 

of the federal government’s interest in the program assets 

held by state and nonprofit FFEL program guaranty 

agencies. Section 422A of the HEA required FFEL 

guaranty agencies to establish federal student loan reserve 

funds (federal funds). Federal funds include initial federal 

start-up funds, receipts of federal reinsurance payments, 

the interest charged on borrowed funds and the interest 

earned on uninvested funds. Treasury sets a different fixed 

interest rate to be used for each loan cohort once the 

loans are substantially disbursed. The Department may 

carry forward borrowing authority to future fiscal years 

provided that cohorts are disbursing loans. All borrowings 

from Treasury are effective on October 1st of the current 

fiscal year, regardless of when the Department borrowed 

the funds, except for amounts borrowed to make annual 

interest payments.

Authority to borrow from Treasury provides most of 

the funding for disbursements made under the Direct 

Loan, FFEL, and other loan programs. Subsidy and 

administrative costs of the programs are funded by 

appropriations. Borrowings are repaid using collections 

from borrowers, fees, and interest on uninvested funds.

Unobligated balances represent the cumulative amount 

of budgetary resources that are not obligated and that 

remain available for obligation under law, unless otherwise 

restricted. Resources expiring at the end of the fiscal 

year remain available for five years, but only for upward 

adjustments of prior year obligations, after which they 

are cancelled and may not be used. Resources that have 

not expired at year-end are available for new obligations, 

as well as upward adjustments of prior-year obligations. 

Funds are appropriated on an annual, multiyear, or 

no-year basis. Appropriated funds expire on the last 

day of availability and are no longer available for new 

obligations. Amounts in expired funds are unavailable 

for new obligations but may be used to adjust previously 

established obligations.

Permanent Indefinite Budget Authority. The Direct 

Loan, FFEL, and other loan programs have permanent 

indefinite budget authority through legislation to fund 

subsequent increases to the estimated future costs of the 

loan programs. Parts B, Federal Family Education Loan 

Program, and D, Federal Direct Student Loan, of the 

HEA pertain to the existence, purpose, and availability of 

permanent indefinite budget authority for these programs.

Reauthorization of Legislation. Funds for most 

Department programs are authorized, by statute, to be 

appropriated for a specified number of years, with an 

automatic one-year extension available under Section 422 

of the General Education Provisions Act. Congress may 

continue to appropriate funds after the expiration of the 

statutory authorization period, effectively reauthorizing 

the program through the appropriations process. The 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 51

Guaranteed loans that default are initially turned over to 

guaranty agencies for collection. Defaulted FFEL loans are 

accounted for as assets and reported at their net present 

value, similar to direct loans, although they are legally 

not direct student loans. Credit program receivables, net 

includes defaulted FFEL loans owned by the Department 

and held by the Department or guaranty agencies. In most 

cases, after approximately four years, defaulted guaranteed 

loans not in repayment are turned over by the guaranty 

agencies to the Department for collection.

FFEL program receivables include purchased loans and 

other interests acquired under an expired program. The 

cash flows related to these receivables include collections 

on purchased loans and other activities, including transfers 

of re-estimated subsidy. The cash flows of these authorities 

also include inflows and outflows associated with the 

underlying or purchased loans and other related activities, 

including any positive or negative subsidy transfers. 

Capitalization of interest occurs as a result of various 

initiatives, such as loan consolidations. As a result, interest 

receivable is reduced and loan principal is increased. (See 

Note 5)

PROPERT Y A ND EQU IPM ENT, NET 

AND LEASES

The Department has very limited acquisition costs 

associated with buildings, furniture, and equipment as 

all Department and contractor staff are housed in leased 

buildings. The Department does not own real property 

for the use of its staff. The Department leases office space 

from the General Services Administration (GSA). The 

lease contracts with GSA for privately and publicly owned 

buildings are operating leases.

The Department also leases information technology and 

telecommunications equipment, as part of a contractorowned, contractor-operated services contract. Lease 

payments associated with this equipment have been 

determined to be operating leases and, as such, are 

expensed as incurred. The noncancellable lease term is one 

year, with the Department holding the right to extend the 

lease term by exercising additional one-year options. (See 

Notes 4 and 14)

LIABILITIES

Liabilities represent actual and estimated amounts to 

be paid as a result of transactions or events that have 

already occurred.

insurance premiums, guaranty agency share of collections 

on defaulted loans, investment income, administrative cost 

allowances, and other assets.

The balance in the Federal Fund represents consolidated 

reserve balances of the 23 guaranty agencies based 

on the Guaranty Agency financial reports that each 

agency submits annually to the Department. Although 

the Department and the guaranty agencies operate on 

different fiscal years, all guaranty agencies are subject to 

an annual audit. A year-end valuation adjustment is made 

to adjust the Department’s balances in order to comply 

with federal accounting principles and disclose funds held 

outside of Treasury.

Guaranty Agencies’ Federal Funds are classified as 

non-entity assets with the public and are offset by a 

corresponding liability due to Treasury. The federal funds 

are held by the guaranty agencies but can only be used 

for certain specific purposes listed in the Department’s 

regulations. The federal funds are the property of the 

U.S. and are reflected in the Budget of the United States 

Government. Payments made to the Department from 

guaranty agencies’ federal funds through a statutory recall or 

agency closures represent capital transfers and are returned 

to Treasury’s General Fund. (See Notes 2, 4, and 9)

CR E DIT PROGR A M R EC E I VA BL E S, 

NET A ND LI A BILIT IE S FOR 

LOA N GUA R A NT E E S 

The financial statements reflect the Department’s estimate 

of the long-term subsidy cost of direct and guaranteed 

loans in accordance with the FCRA. Loans and interest 

receivable are valued at their gross amounts less an 

allowance for the present value of amounts not expected 

to be recovered and thus having to be subsidized—called 

an “allowance for subsidy.” The difference between the 

gross amount and the allowance for subsidy is the present 

value of the cash flows to, and from, the Department that 

are expected from receivables over their projected lives. 

Similarly, liabilities for loan guarantees are valued at the 

present value of the cash outflows from the Department 

less the present value of related inflows. The estimated 

present value of net long-term cash outflows of the 

Department for subsidized costs is net of recoveries, 

interest supplements, and offsetting fees.

The liability for loan guarantees presents the net present 

value of all future cash flows from currently insured FFEL 

loans, including claim payments, interest assistance, 

allowance payments, and recoveries from assigned loans. 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

52 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

collections in excess of estimated outlays) for the 

Department’s pre-1992 FFEL and HEAL loans that, when 

collected, will also be transferred to the Treasury General 

Fund. (See Note 8)

ACCOUNTS PAYABLE

Accounts payable include amounts owed by the 

Department for goods and services received from other 

entities, as well as payments not yet processed. Accounts 

payable to the public primarily consists of in-process grant 

and loan disbursements, including an accrued liability 

for schools that have disbursed loans prior to requesting 

funds. (See Note 9)

ACCRUED GRANT LIABILITY

Some grant recipients incur allowable expenditures as 

of the end of an accounting period but have not been 

reimbursed by the Department. The Department accrues 

a liability for these allowable expenditures. The amount 

is estimated using statistical sampling of unliquidated 

balances. (See Note 9)

PER SON NE L COMPENSAT ION A ND 

OTHER EMPLOYEE BENEFITS

Annual, Sick, and Other Leave. The liability for annual 

leave, compensatory time off, and other vested leave is 

accrued when earned and reduced when taken. Each year, 

the accrued annual leave account balance is adjusted to 

reflect current pay rates. Sick leave and other types of 

nonvested leave are expensed as taken. Annual leave earned 

but not taken, within established limits, is funded from 

future financing sources. (See Notes 6 and 9)

Retirement Plans and Other Retirement Benefits.

Employees participate in either the Civil Service 

Retirement System (CSRS), a defined benefit plan, or the 

Federal Employees Retirement System (FERS), a defined 

benefit and contribution plan. For CSRS employees, the 

Department contributes a fixed percentage of pay.

FERS consists of Social Security, a basic annuity plan, 

and the Thrift Savings Plan. The Department and the 

employee contribute to Social Security and the basic 

annuity plan at rates prescribed by law. In addition, the 

Department is required to contribute to the Thrift Savings 

Plan a minimum of 1 percent per year of the basic pay 

of employees covered by this system, match voluntary 

employee contributions up to 3 percent of the employee’s 

basic pay, and match one-half of contributions between 

 Liabilities are classified as covered by budgetary 

resources if budgetary resources are available to pay 

them. Credit program liabilities funded by permanent 

indefinite appropriations are also considered covered by 

budgetary resources. 

 Liabilities are classified as not covered by budgetary 

resources when congressional action is needed before 

they can be paid. Although future appropriations to 

fund these liabilities are likely, it is not certain that 

appropriations will be enacted to fund these liabilities. 

 Liabilities not requiring appropriated budgetary 

resources include those related to deposit funds, 

Subsidy Due to Treasury General Fund for Future 

Liquidating Account Collections (pre-1992 loan 

guarantee programs), and Federal Perkins Loan 

Program balances due to be repaid to the Treasury 

General Fund. (See Note 6) 

DEBT 

The Department borrows from Treasury to provide 

funding for the Direct Loan, FFEL, and other credit 

programs for higher education. The liability to Treasury 

from borrowings represents unpaid principal at yearend. The Department repays the principal based on 

available fund balances. Interest rates are based on the 

corresponding rate for 10-year Treasury securities and are 

set for those borrowings supporting each cohort of loans 

once the loans for that cohort are substantially disbursed. 

Interest is paid to Treasury on September 30th. In 

addition, the Federal Financing Bank (FFB) holds bonds 

issued by a designated bonding authority, on behalf of the 

Department, for the HBCU Capital Financing program. 

The debt for other credit programs for higher education 

includes the liability for full payment of principal and 

accrued interest for the FFB-financed HBCU Capital 

Financing program. (See Note 7) 

SU BSIDY DU E TO T R E A SU RY 

GENERAL FUND

The Department must transfer to the Treasury General 

Fund all excess funding resulting from downward reestimates of credit program loans that are subject to FCRA 

requirements. This excess funding is included in the 

liability for subsidy due to Treasury and will be transferred 

to Treasury in the succeeding fiscal year upon receipt 

of authority from OMB. Subsidy due to Treasury also 

includes future liquidating account collections (estimated 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 53

those related to employee benefits are not included in the 

Department’s financial statements.

NET COST OF OPERATIONS

As required by the GPRA Modernization Act of 2010, the 

Department’s programs have been aligned with the goals 

presented in the Department’s Strategic Plan. 

Net cost consists of gross costs less earned revenue. Major 

components of the Department’s net costs include credit 

program subsidy expense, credit program interest revenue 

and expense, and grant expenses. (See Note 10)

Credit Program Subsidy Expense. Subsidy expense is 

an estimate of the present value cost of providing loans, 

excluding the administrative costs of issuing and servicing 

the loans. In order to estimate subsidy expense, the 

Department must project lifetime cash flows associated 

with loans disbursed in a specific fiscal year (i.e., the loan 

cohort). The Department projects these lifetime cash flows 

using a set of econometric and financial models, as well 

as cash flow models. The Department estimates subsidy 

expenses annually for new loans disbursed in the current 

year; updates the previous cost estimates for outstanding 

loans disbursed in prior years (subsidy re-estimates); and 

updates previous cost estimates based on changes to terms 

of existing loans (loan modifications). Loan modifications 

include actions resulting from new legislation or from 

the exercise of administrative discretion under existing 

law, which directly or indirectly alters the estimated 

subsidy cost of outstanding direct loans (or direct loan 

obligations). (See Notes 5 and 10) 

Credit Program Interest Revenue and Expense. The 

Department recognizes interest revenue from the public 

when interest is accrued on Direct Loan program loans, 

defaulted and acquired FFEL loans, and outstanding 

principal for other loan programs. Interest due from 

borrowers is accrued at least monthly and is satisfied upon 

collection or capitalization into the loan principal. Federal 

interest revenue is recognized on the unused fund balances 

with Treasury in the financing accounts.

Federal interest expense is recognized monthly on the 

outstanding borrowing from Treasury (debt) used to 

finance direct loan and loan guarantee programs. Accrued 

interest to Treasury is paid on September 30th. The 

interest rate for federal interest expense is the same as the 

rate used for federal interest revenue.

3 percent and 5 percent of the employee’s basic pay. For 

FERS employees, the Department also contributes the 

employer’s share of Medicare.

Federal Employees’ Compensation Act. The Federal 

Employees’ Compensation Act (FECA) (Pub. L. 103-

3) provides income and medical cost protection to 

covered federal civilian employees injured on the job, to 

employees who have incurred work-related occupational 

diseases, and to beneficiaries of employees whose deaths 

are attributable to job-related injuries or occupational 

diseases. The FECA program is administered by the 

Department of Labor (DOL), which pays valid claims and 

subsequently seeks reimbursement from the Department 

for these paid claims.

The FECA liability consists of two elements. The first 

element, accrued FECA liability, is based on claims paid 

by DOL but not yet reimbursed by the Department. 

The Department reimburses DOL for claims as funds 

are appropriated for this purpose. In general, there is a 

two- to three-year period between payment by DOL and 

reimbursement to DOL by the Department. As a result, 

the Department recognizes an intragovernmental liability, 

not covered by budgetary resources, for the claims paid by 

DOL that will be reimbursed by the Department.

The second element, actuarial FECA liability, is the 

estimated liability for future benefit payments and is 

recorded as a liability with the public, not covered by 

budgetary resources. The actuarial FECA liability includes 

the expected liability for death, disability, medical, and 

miscellaneous costs for approved compensation cases. 

DOL determines the actuarial FECA liability annually, 

as of September 30th, using an actuarial method that 

considers historical benefit payment patterns, wage 

inflation factors, medical inflation factors, and other 

variables. The projected annual benefit payments are 

discounted to present value. (See Notes 6 and 9)

IMPUTED COSTS

Services are received from other federal entities at no cost 

or at a cost less than the full cost to the Department. 

Consistent with accounting standards, certain costs of 

the providing entity that are not fully reimbursed by 

the Department are recognized as imputed cost in the 

Statements of Net Cost and are offset by imputed revenue 

in the Statements of Changes in Net Position. Such 

imputed costs and revenues relate to employee benefits. 

However, unreimbursed costs of services other than 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

54 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

USE OF ESTIMATES

Department management is required to make certain 

estimates while preparing consolidated financial statements 

in conformity with GAAP. These estimates are reflected 

in the assets, liabilities, net cost, and net position of the 

financial statements and may differ from actual results. 

The Department’s estimates are based on management’s 

best knowledge of current events, historical experiences, 

and other assumptions that are believed to be reasonable 

under the circumstances. Significant estimates reported on 

the financial statements include: allocation of Department 

administrative overhead costs; allowance for subsidy and 

subsidy expense for direct, defaulted guaranteed, and 

acquired loans; the liability for loan guarantees; and grant 

liability and advance accruals. (See Notes 4, 5, 9, and 10)

The Department’s estimates for credit programs are 

calculated using a series of assumption models that are 

updated using a statistically valid sample of National 

Student Loan Data System (NSLDS®) data, data from 

the Debt Management and Collection System, and 

economic assumptions provided by OMB. Actual 

results may differ from those assumptions and estimates. 

Differences between actual results and these estimates 

may occur in the valuation of credit program receivables 

and liabilities for loan guarantees under guidelines in 

the FCRA. The Department recognizes the sensitivity 

of credit reform modeling. Slight changes in modeling 

methodology or data used to derive assumptions can 

produce largely varied results. The Department therefore 

continually reviews its model factors and statistical 

modeling techniques to reflect the most accurate 

credit program costs possible in its annual financial 

statements. The Department updates its assumption 

models in accordance with its model update plan, which 

takes into consideration statutory or new program 

requirements, major changes to the model structure or 

methodology, and data updates. This level of granularity 

in the modeling methodology is essential to the 

financial reporting and budgeting processes so that the 

Department can forecast the costs of various program 

options when making policy decisions. (See Note 5)

R ECL A SSIFIC AT IONS 

The following reclassifications were made to the prior 

year financial statements and notes to conform to the 

current year presentation. These changes had no effect 

on total assets, liabilities and net position, net cost of 

operations, or budgetary resources. 

Interest expense equals interest revenue plus administrative 

fees accrued for all credit programs due to subsidy 

amortization. Subsidy amortization is required by the 

FCRA and accounts for the difference between interest 

expense and revenue cash flows. For direct loans, the 

allowance for subsidy is adjusted with the offset to interest 

revenue. For guaranteed loans, the liability for loan 

guarantees is adjusted with the offset to interest expense. 

(See Note 10)

NET POSITION

Net position consists of unexpended appropriations 

and cumulative results of operations. Unexpended 

appropriations include undelivered orders and 

unobligated balances, except for amounts in financing 

accounts, liquidating accounts, and trust funds. 

Cumulative results of operations represent the net 

difference since inception between (1) expenses and (2) 

revenues and financing sources.

ALLOCATION TRANSFERS

The Department is a party to allocation transfers with 

other Federal agencies as both a transferring (parent) entity 

and a receiving (child) entity. Allocation transfers are 

legal delegations by one entity of its authority to obligate 

budget authority and outlay funds to another entity. A 

separate fund account (allocation account) is created in the 

U.S. Treasury as a subset of the parent fund account for 

tracking and reporting purposes. All allocation transfers 

of balances are credited to this account, and subsequent 

obligations and outlays incurred by the child entity are 

charged to this allocation account as they execute the 

delegated activity on behalf of the parent entity. All 

financial activity related to this allocation transfer (e.g., 

budget authority, obligations, outlays) is reported in 

the financial statements of the parent entity from which 

the underlying legislative authority, appropriations, and 

budget apportionments are derived.

The Department is a party to allocation transfers as a 

parent entity to the Department of the Interior and 

receives allocation transfers as a child entity from the 

Department of Health and Human Services. 

TAXES

The Department is a Federal entity and is not subject to 

Federal, state or local taxes. Therefore, no provision for 

income taxes is recorded.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 55

 The FY 2019 Outlays, Net line of Combined Statements of Budgetary Resources was reclassified to present net 

disbursements associated with credit financing accounts on a separate Disbursements, Net line to conform to FY 2020 

changes in OMB Circular A-136.

 Note 13, Reconciliation of Net Cost to Net Outlays, was reclassified to exclude the credit financing account net 

disbursement amount that was reclassified on the Combined Statements of Budgetary Resources to conform to FY 2020 

changes in OMB Circular A-136.

NOTE 2. Non-Entity Assets

2020 2019

Intragovernmental With the Public Intragovernmental With the Public

Non-Entity Assets

Fund Balance with Treasury $ 233 $ - $ 294 $ - 

Credit Program Receivables, Net - 633 - 607 

Other Assets

 Guaranty Agencies’ Federal Funds - 1,943 - 1,956 

 Accounts Receivable, Net - 42 - 84 

Total Non-Entity Assets 233 2,618 294 2,647 

Entity Assets 135,906 1,170,629 104,690 1,203,065 

Total Assets $ 136,139 $ 1,173,247 $ 104,984 $ 1,205,712 

(Dollars in Millions)

The Department’s FY 2020 assets are predominantly entity assets (99.8 percent), leaving a small portion of assets 

remaining as non-entity assets. Non-entity intragovernmental assets primarily consist of balances in deposit and clearing 

accounts. Non-entity assets with the public primarily consist of guaranty agency reserves (74.2 percent), reported as 

Guaranty Agencies’ Federal Funds, and Federal Perkins Loan program loan receivables (24.2 percent), reported as credit 

program receivables, net. Federal Perkins Loan program receivables are a non-entity asset because the assets are held by the 

Department but are not available for use by the Department. The corresponding liabilities for these non-entity assets are 

reflected in various accounts, including intragovernmental accounts payable, Guaranty Agencies’ Federal Funds Due to 

Treasury, and other liabilities (see Note 9).
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

56 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

NOTE 3. Fund Balance with Treasury 

(Dollars in Millions)

2020 2019

COVID-19 Funds All Other Funds Total Total

Unobligated Balance

 Available $ 672 $ 15,774 $ 16,446 $ 13,578 

 Unavailable - 24,236 24,236 19,564 

Obligated Balance, Not Disbursed 18,944 124,403 143,347 127,291 

Authority Temporarily Precluded from Obligation - - - 1 

Borrowing Authority Not Yet Converted to Fund Balance with 

Treasury (Note 11) - (48,230) (48,230) (55,845)

Other - 216 216 329 

Total Fund Balance with Treasury $ 19,616 $ 116,399 $ 136,015 $ 104,918 

Available unobligated balances represent amounts that are apportioned for obligation in the current fiscal year. 

Unavailable unobligated balances represent amounts that are not apportioned for obligation during the current fiscal year 

and expired appropriations no longer available to incur new obligations. Total unavailable unobligated balance ($24.2 

billion) differs from unapportioned and expired amounts on the SBR ($26.1 billion) due to the Guaranty Agencies’ 

Federal Funds ($1.9 billion).

In FY 2020 and FY 2019, $305 and $405 million, respectively, of unused funds from canceled appropriations were 

returned to Treasury. Such balances are excluded from the amount reported as Fund Balance with Treasury in accordance 

with Treasury guidelines (see Note 12).

NOTE 4. Other Assets 

(Dollars in Millions)

2020 2019

Intragovernmental With the Public Intragovernmental With the Public

Guaranty Agencies’ Federal Funds $ - $ 1,943 $ - $ 1,956 

Accounts Receivable, Net 3 234 2 251 

Advances 120 32 64 35 

Property and Equipment, Net - 6 - 8 

Other 1 1 - 6 

Total Other Assets $ 124 $ 2,216 $ 66 $ 2,256 

Included in the accounts receivable with the public are amounts owed as a result of criminal restitution orders that are to 

be collected by the Department of Justice on behalf of the Department of Education. Amounts collected for these criminal 

restitutions are generally returned to the Treasury General Fund. Gross receivables and the allowance for uncollectible 

amounts as of September 30, 2020 related to criminal restitutions totaled $114 million and ($102) million, respectively.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 57

2020

 Acquisition Value Accumulated Depreciation Net 

Balance Beginning of the Year $ 169 $ (161) $ 8 

Dispositions (2) 1 (1)

Depreciation Expense - (1) (1)

Balance At End of Year $ 167 (161) 6 

Property and Equipment 

(Dollars in Millions)

NOTE 5. Credit Programs for Higher Education: Credit Program Receivables, Net and 

Liabilities for Loan Guarantees 

Credit Program Receivables

(Dollars in Millions)

Principal Accrued Interest Allowance for 

Subsidy Net

2020

Direct Loan Program $ 1,224,816 $ 92,132 $ (216,404) $ 1,100,544 

FFEL Program 84,765 24,110 (41,495) 67,380 

Other Credit Programs for Higher Education 3,364 373 (630) 3,107 

Total Credit Program Receivables $ 1,312,945 $ 116,615 $ (258,529) $ 1,171,031 

2019

Direct Loan Program $ 1,164,883 $ 83,262 $ (124,438) $ 1,123,707 

FFEL Program 90,218 22,267 (35,718) 76,767 

Other Credit Programs for Higher Education 3,225 396 (639) 2,982 

Total Credit Program Receivables $ 1,258,326 $ 105,925 $ (160,795) $ 1,203,456 

The federal student loan programs provide students and their families with the funds to help meet postsecondary education 

costs. Funding for these programs is provided through permanent indefinite budget authority. The emergency relief 

measures provided by Congress and the Administration in response to the coronavirus pandemic were recorded as loan 

modifications and are described in each of the programs below. Per OMB guidance, loan modifications were calculated 

using the FY 2020 President’s Budget formulation discount rates. The net loans receivable or the value of assets related to 

direct loans is not the same as expected proceeds from selling the loans.

What follows is additional analysis of the activity, costs, and adjustments for each of the loan programs.

DIR EC T LOA N PROGR A M 

The federal government makes loans directly to students and parents through participating IHEs under the Direct Loan 

program. Direct loans are originated and serviced through contracts with private vendors.

Direct Loan program loan receivables include defaulted and nondefaulted loans owned by the Department. Of the $1,317.0 

billion in gross loan receivables, as of September 30, 2020, $100.3 billion (7.6 percent) in loan principal was in default and 

had been transferred to the Department’s defaulted loan servicer, compared to $99.7 billion (8.0 percent) as of September 

30, 2019.

Changes in property and equipment balances for the current year were as follows:
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

58 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Direct Loan Program Interest Expense and Revenues (See Note 10)

(Dollars in Millions)

2020 2019

Interest Expense on Treasury Borrowing $ 34,705 $ 33,817 

Total Interest Expense $ 34,705 $ 33,817 

Interest Revenue from the Public 28,161 59,815 

Interest Revenue on Uninvested Funds 4,786 4,082 

Administrative Fees 163 210 

Amortization of Subsidy 1,595 (30,290)

Total Revenues $ 34,705 $ 33,817 

The allocation of disbursements for the first three loan types is estimated based on historical trend information.

Student and parent borrowers may prepay existing loans without penalty through a new consolidation loan. Under the FCRA 

and requirements provided by OMB regulations, the retirement of direct loans being consolidated is considered a collection 

of principal and interest. This receipt is offset by the disbursement related to the newly created consolidation loan. Underlying 

direct or guaranteed loans, performing or nonperforming, are paid off in their original cohort; new consolidation loans are 

originated in the cohort in which the new consolidation loan was obligated. Consolidation activity is taken into consideration 

in establishing subsidy rates for defaults and other cash flows. The cost of new consolidations is included in subsidy expense 

for the current-year cohort; the effect of prepayments on existing loans could contribute to re-estimates of prior cohort subsidy 

costs. The net receivables include estimates of future prepayments of existing loans through consolidations; they do not reflect 

subsidy costs associated with anticipated future consolidation loans.

Direct loan consolidations were $30.4 billion during FY 2020 and $39.8 billion during FY 2019. The effect of the early 

payoff of the existing loans—those being consolidated—is recognized in the future projected cash flows associated with 

that cohort.

Direct Loan Program Loan Disbursements by Loan Type

(Dollars in Millions)

2020 2019

Stafford 19,126 $ 19,984 

Unsubsidized Stafford 46,077 48,142 

PLUS 21,735 22,709 

Consolidation 30,427 39,829 

Total Disbursements $ 117,365 $ 130,664 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 59

Direct Loan Program Subsidy Expense 

(Dollars in Millions)

2020 2019

Subsidy Expense for Direct Loans Disbursed in the Current Year

 Interest Rate Differential $ 19,022 $ 11,440 

 Defaults, Net of Recoveries 1,925 1,862 

 Fees (1,676) (1,720)

 Other (14,131) (14,563)

Total Subsidy Expense for Direct Loans Disbursed in the Current Year 5,140 (2,981)

Modifications and Re-estimates

Loan Modifications

 Modification Adjustment Transfer Gain (265) - 

 Modification Adjustment Transfer Loss 347 - 

 Loan Modifications 39,576 - 

 Total Loan Modifications 39,658 - 

Net Upward Subsidy Re-estimates

 Interest Rate Re-estimates (967) (981)

 Technical and Default Re-estimates 57,077 65,472 

 Total Net Upward Subsidy Re-estimates 56,110 64,491 

Total Modifications and Re-estimates 95,768 64,491 

Direct Loan Subsidy Expense $ 100,908 $ 61,510 

Subsidy Expense for Direct Loans Disbursed in the Current Year. The two major components of the total subsidy expense 

for direct loans disbursed in the current year (subsidy transfers) are Interest Rate Differential and Other Components. 

Interest rate differential is attributable to the difference between the borrowers’ interest payments due to the Department 

and the Department’s estimated cost to finance the direct loan on a present value basis. The Other Components of subsidy 

transfers primarily consists of contract collection costs, program review collections, fees, and loan forgiveness.

Loan Modifications. Loan modifications for the Direct Loan program for FY 2020 included the following:

 CARES Act. The CARES Act automatically suspended principal and interest payments and set interest rates to 0 percent 

on federally held student loans starting in March through September 30, 2020. The relief for borrowers resulted in an 

upward modification cost of $24.6 billion, with an additional $459 million for cancelled loans for students that did 

not complete the semester due to a qualifying emergency. There was a net positive $82 million modification adjustment 

transfer associated with this modification, bringing the total to $25.0 billion.

 Presidential Memorandum (“Memorandum on Continued Student Loan Payment Relief During the COVID-19 

Pandemic”). On August 8, 2020, the Administration issued a Presidential Memorandum that continued the temporary 

suspension of payments and the waiver of all interest on federally held student loans through December 31, 2020. 

The relief for borrowers resulted in an upward modification cost of $13.5 billion. There was a net negative $66 million 

modification adjustment transfer associated with this modification, bringing the total to $13.6 billion.

 Total and Permanent Disability. The Department recorded an upward modification for costs associated with the 

regulatory action to provide proactive discharge (unless the borrower elects to reject the discharge) to borrowers for 

whom the Department of Veterans Affairs provides information showing the borrower has a total and permanent 

disability. These discharges resulted in an upward modification cost of $1.0 billion. There was a net negative $98 million 

modification adjustment transfer associated with this modification, bringing the total to $1.1 billion.

Net Upward Subsidy Re-estimates for All Prior Year Loan Cohorts. The Direct Loan program subsidy re-estimate increased 

subsidy expense in FY 2020 by $56.1 billion. Re-estimated costs only include cohorts that are 90 percent disbursed (i.e., cohort 

years 1994–2019). The re-estimate reflects the assumption updates and other changes described below. 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

60 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Direct Loan Subsidy Rates—Cohort 2020

 Interest Differential Defaults Fees Other Total

Stafford 25.47% 2.61% -1.06% -12.99% 14.03%

Unsubsidized Stafford 19.27% 2.28% -1.06% -19.74% 0.75%

PLUS 8.16% 1.46% -4.24% -18.63% -13.25%

Consolidation 14.70% 1.16% 0.00% 4.88% 20.74%

Weighted Average Total 17.01% 1.88% -1.33% -11.66% 5.90%

The subsidy rates disclosed pertain only to the current year’s cohorts. These rates cannot be applied to the direct loans disbursed 

during the current reporting year to yield the subsidy expense. The subsidy expense for new loans reported in the current year 

could result from disbursements of loans from both current year cohorts and prior years cohorts. The subsidy expense reported 

in the current year also includes modifications and re-estimates. 

*

 The Other component reflects costs associated with loan cancelations and the interactive effects of payment plans on the components of subsidy.

In addition to the major assumption updates described below, the re-estimate reflects several other assumption updates, 

including interest rates provided by OMB, loan volume, and contract collection costs. 

 IDR Model Changes (including PSLF). The Department completed a standard IDR data update to reflect the immediate 

prior cycle for defaults, prepayments and Death, Disability, and Bankruptcy (DDB). The DDB update includes 

adjustments for the Total Permanent Disability for Veterans regulation. In addition, an existing borrower income file 

was calibrated using an additional year of IDR application data through 2018. The additional year of borrower income 

data taken from IDR applications has been substantially lower than projected. As such, the Department reduced its 

projections of future borrower income by 35%, increasing costs associated with IDR. The Department also analyzed 

the actual PSLF approval rates and supplementary data. As a result of that analysis, the PSLF approval rate was adjusted 

downward for initial cohorts to better reflect the actual data. Trends indicate that there has been some improvement in 

PSLF approval rates over time as borrowers better understand the application process. PSLF estimates were revised to 

reflect the most recent borrower behavior and adjust the temporal element to ramp up PSLF forgiveness over time. The 

combined effect of these updates led to a net upward re-estimate of $35.5 billion. 

 Repayment Plans. The Department updated the data and made an adjustment to exclude special consolidation of FFEL 

loans in FY 2012 and FY 2013 from the model. These loans are modeled separately and were less likely to enroll in 

income dependent repayment plans than typical consolidation loans. The combined effect of these changes led to a net 

upward re-estimate of $6.5 billion.

 Default. In addition to the adjustments for the CARES Act, the Department updated the data and incorporated actual 

unemployment rates from the Bureau of Labor Statistics through June 2020. The combined effect of these changes led to 

a net upward re-estimate of $1.8 billion.

 2019 Cohort Assumption Changes. The technical re-estimate cannot reflect the impacts of certain assumption changes 

applicable to the current year loan cohort until the following fiscal year per OMB guidance. The current year’s reestimate includes a net upward adjustment of $4.8 billion for these current year assumption changes attributable to the 

FY 2019 cohort.

 Interest on the Re-estimate. Interest on re-estimates is the amount of interest that would have been earned or paid by 

each cohort on the subsidy re-estimate, if the re-estimated subsidy had been included as part of the original subsidy 

estimate. The interest on the re-estimate calculated on the overall subsidy re-estimate resulted in a net upward re-estimate 

of $5.9 billion.

 Interactive Effects. The re-estimate includes a net upward re-estimate of $1.5 billion attributed to the interactive effects 

of the assumption changes described above. Each assumption described above is run independently. The interactive effect 

is a result of combining all assumptions together to calculate the final re-estimate.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 61

Direct Loan Program Reconciliation of Allowance for Subsidy 

(Dollars in Millions)

2020 2019

Beginning Balance of Allowance for Subsidy $ 124,438 $ 40,663 

Total Subsidy Expense for Direct Loans Disbursed in the Current Year 5,140 (2,981)

Adjustments

Loan Modifications 39,658 - 

Fees Received 1,609 1,693 

Loans Written Off (7,833) (9,096)

Subsidy Allowance Amortization (1,595) 30,290 

Other Activities (1,123) (622)

Ending Balance of the Subsidy Cost Allowance Before Re-estimates 160,294 59,947 

Net Upward Subsidy Re-estimates 56,110 64,491 

Ending Balance of Allowance for Subsidy $ 216,404 $ 124,438 

The estimation process used to determine the amount of positive or negative subsidy expense each fiscal year, and 

subsequently the cumulative taxpayer cost of the program (allowance for subsidy), is subject to various external risk factors 

which often show strong interdependence with one another. These risks include uncertainty about changes in the general 

economy, changes in the legislative and regulatory environment, and changing trends in borrower performance with regard 

to contractual cash flows within the loan programs.

Due to the complexity of the Direct Loan program, there is inherent projection risk in the process used for estimating longterm program costs. As stated, some uncertainty stems from potential changes in student loan legislation and regulations 

because these changes may fundamentally alter the cost structure of the program. Operational and policy shifts may also 

affect program costs by causing significant changes in borrower repayment timing. Actual performance may deviate from 

estimated performance, which is not unexpected given the long-term nature of these loans (cash flows may be estimated 

up to 40 years), and the multitude of projection paths and possible outcomes. The high percentage of borrowers in Income 

Driven Plans has made projection of borrower incomes a key input for the estimation process. This uncertainty is directly 

tied to the macroeconomic climate and is another inherent program element that displays the interrelated risks facing the 

Direct Loan program.

Loans written off result from borrowers having died, becoming disabled, or declaring bankruptcy. The interest rate reestimate reflects the cost of finalizing the Treasury borrowing rate to be used for borrowings received to fund the disbursed 

portion of the loan awards obligated. 

FEDERAL FAMILY EDUCATION LOAN PROGRAM.

FFEL was established in FY 1965 and is a guaranteed loan program. As a result of the Student Aid and Fiscal Responsibility 

Act, no new FFEL loans have been made since July 1, 2010. Federal guarantees on FFEL program loans and commitments 

remain in effect for loans made before July 1, 2010, unless they were sold to the Department through an ECASLA authority 

(acquired FFEL loans), consolidated into a direct loan, or otherwise satisfied, discharged, or cancelled.

The subsidy costs of the Department’s student loan programs, especially the Direct Loan program, are highly sensitive 

to changes in actual and forecasted interest rates. The formulas for determining program interest rates are established by 

statute; the existing loan portfolio has a mixture of borrower and lender rate formulas. Interest rate projections are based on 

probabilistic interest rate scenario inputs developed and provided by OMB.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

62 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

FFEL Program Loan Receivables 

(Dollars in Millions)

Principal Accrued Interest

Allowance for 

Subsidy 

(Present Value)

Net

2020

DEFAULTED FFEL GUARANTEED LOANS

FFEL GSL Program (Pre-1992) $ 3,627 $ 5,809 $ (8,249) $ 1,187 

FFEL GSL Program (Post-1991) 33,057 9,121 (22,286) 19,892 

Total Defaulted FFEL Guaranteed Loans 36,684 14,930 (30,535) 21,079 

ACQUIRED FFEL LOANS

Loan Purchase Commitment 16,009 2,797 (4,102) 14,704 

Loan Participation Purchase 30,683 6,005 (6,424) 30,264 

ABCP Conduit 1,389 378 (434) 1,333 

Total Acquired FFEL Loans 48,081 9,180 (10,960) 46,301 

FFEL Program Loan Receivables $ 84,765 $ 24,110 $ (41,495) $ 67,380 

2019

DEFAULTED FFEL GUARANTEED LOANS

FFEL GSL Program (Pre-1992) $ 3,729 $ 5,858 $ (8,776) $ 811 

FFEL GSL Program (Post-1991) 33,780 8,561 (20,113) 22,228 

Total Defaulted FFEL Guaranteed Loans 37,509 14,419 (28,889) 23,039 

ACQUIRED FFEL LOANS

Loan Purchase Commitment 17,536 2,519 (2,531) 17,524 

Loan Participation Purchase 33,696 4,983 (3,843) 34,836 

ABCP Conduit 1,477 346 (455) 1,368 

Total Acquired FFEL Loans 52,709 7,848 (6,829) 53,728 

FFEL Program Loan Receivables $ 90,218 $ 22,267 $ (35,718) $ 76,767 

As of September 30, 2020, the total principal value of guaranteed loans outstanding and the amount of that principal which 

is guaranteed is approximately $128.9 billion. 

Additionally, the FFEL program guarantees outstanding interest balances. As of September 30, 2020, the interest balances 

outstanding for guaranteed loans held by lenders was approximately $4.6 billion. 

The Department’s total FFEL program guarantees (principal and interest) are approximately $133.5 billion as of September 

30, 2020. Of the total guaranteed amount, the Department would expect to pay a smaller amount to the guaranty agencies. 

The guarantee rates range from 75 to 100 percent of the principal and interest balance depending on the type of claim, 

when the loan was made, and the guaranty agency’s claim experience. For purposes of disclosing the Department’s total risk 

exposure for FFEL guarantees, the highest reimbursement rate of 100 percent is assumed.

Defaulted and acquired FFEL loans are accounted for as assets as shown in the following table.

FFEL Guaranteed Loans Outstanding

(Dollars in Billions)

2020

Outstanding Principal of Guaranteed Loans, Face Value $ 128.9 

Amount of Outstanding Principal Guaranteed $ 128.9 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 63

FFEL Program Subsidy Expense 

(Dollars in Millions)

2020 2019

Loan Modification Costs

FFEL Guaranteed Loan Program

 Net Modification Adjustment Transfer (Gain)/Loss $ (9) $ - 

 Loan Modifications 835 - 

 Total FFEL Guaranteed Loan Program Loan Modifications 826 - 

Loan Purchase Commitment

 Net Modification Adjustment Transfer (Gain)/Loss (7) - 

 Loan Modifications 958 - 

 Total Loan Purchase Commitment Loan Modifications 951 - 

Loan Participation Purchase

 Net Modification Adjustment Transfer (Gain)/Loss (10) - 

 Loan Modifications 1,658 - 

 Total Loan Participation Purchase Loan Modifications 1,648 - 

Total Loan Modification Costs 3,425 - 

Upward/(Downward) Subsidy Re-estimates

 FFEL Loan Guarantee Program (3,451) 6,866 

 Loan Purchase Commitment 802 2,144 

 Loan Participation Purchase 1,376 3,644 

Total FFEL Program Subsidy Re-estimates (1,273) 12,654 

FFEL Program Subsidy Expense $ 2,152 $ 12,654 

Loan Modifications. Loan modifications for the FFEL Loan program for FY 2020 included the following:

 CARES Act. The CARES Act automatically suspended principal and interest payments and set interest rates to 0 percent 

on federally held student loans, including loans purchased under ECASLA, starting in March through September 30, 

2020. The relief for borrowers resulted in a net upward modification cost of $1,775 million that included a positive 

modification transfer of $15 million. 

 Presidential Memorandum (“Memorandum on Continued Student Loan Payment Relief During the COVID-19 

Pandemic”). On August 8, 2020, the Administration issued a Presidential Memorandum that continued the temporary 

suspension of payments and the waiver of all interest on federally held student loans through December 31, 2020. The 

relief for borrowers resulted in an upward modification cost of $1,051 million that included a positive modification 

transfer of $9 million.

 Secretary’s Discretion. The Department extended certain provisions of the student loan deferrals not covered by the 

CARES Act to defaulted guaranteed loans held by the Department, resulting in an upward modification cost of $492 

million that included a positive modification adjustment transfer of $4 million.

 Total and Permanent Disability. The Department recorded an upward modification for costs associated with the regulatory 

action to provide proactive discharge (unless the borrower elects to reject the discharge) to borrowers for whom the 

Department of Veterans Affairs provides information showing the borrower has a total and permanent disability. These 

discharges resulted in an upward modification cost of $127 million across the FFEL and ECASLA programs.

Net Downward Subsidy Re-estimates. The FFEL subsidy re-estimate decreased subsidy expense in FY 2020 by $1.3 

billion. The net downward re-estimates in these programs were due primarily to interest rates provided by OMB used in the 

calculation of special allowance payments, updated disability discharges, and prepayment rates.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

64 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

FFEL Program Reconciliation of Liabilities for Loan Guarantees 

(Dollars in Millions)

2020 2019

Beginning Balance of Post-1991 FFEL Loan Guarantee Liability $ 5,205 $ 2,591 

Adjustments

 Loan Modifications 826 - 

 Interest Supplements Paid (757) (1,332)

 Claim Payments to Lenders (4,285) (5,583)

 Fees Received 1,215 1,385 

 Interest on Accumulation on the Liability Balance (1,064) (1,096)

 Other Activities 3,195 2,374 

 Net Upward/(Downward) Subsidy Re-estimates (3,451) 6,866 

Ending Balance of Post-1991 FFEL Loan Guarantee Liability 884 5,205 

Pre-1992 FFEL Liquidating Account Liability for Loan Guarantees 1 1 

FFEL Liabilities for Loan Guarantees $ 885 $ 5,206 

Liabilities for Loan Guarantees is included as a component of other liabilities on the balance sheets (see Note 9).

Other activity includes negative special allowance collections, collections on defaulted FFEL loans, guaranty agency 

expenses, and loan cancellations due to death, disability, or bankruptcy.

Allowance for Subsidy Reconciliation for Acquired FFEL Loans 

(Dollars in Millions)

Loan Purchase 

Commitment

Loan 

Participation 

Purchase

ABCP Conduit Total

2020

Beginning Balance of Allowance for Subsidy $ 2,531 $ 3,843 $ 455 $ 6,829 

Adjustments

 Loan Modifications 951 1,648 - 2,599 

 Subsidy Allowance Amortization 3 (89) - (86)

 Loan Written Off (140) (271) (16) (427)

 Other Activities (45) (83) (5) (133)

Ending Balance of Allowance for Subsidy Before Re-estimates $ 3,300 $ 5,048 $ 434 $ 8,782 

Net Upward Subsidy Re-estimates 802 1,376 - 2,178 

Ending Balance of Allowance for Subsidy $ 4,102 $ 6,424 $ 434 $ 10,960 

2019

Beginning Balance of Allowance for Subsidy $ 21 $ (458) $ 426 $ (11)

Adjustments

 Subsidy Allowance Amortization 571 1,027 52 1,650 

 Loan Written Off (165) (308) (18) (491)

 Other Activities (40) (62) (5) (107)

Ending Balance of Allowance for Subsidy Before Re-estimates $ 387 $ 199 $ 455 $ 1,041 

Net Upward Subsidy Re-estimates 2,144 3,644 - 5,788 

Ending Balance of Allowance for Subsidy $ 2,531 $ 3,843 $ 455 $ 6,829 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 65

OTHER CREDIT PROGRAMS FOR HIGHER EDUCATION

Receivables, Net for Other Credit Programs for Higher Education 

(Dollars in Millions)

Principal Accrued Interest

Allowance for 

Subsidy 

(Present Value)

Net

2020

Federal Perkins Loans $ 615 $ 202 $ (184) $ 633 

TEACH Program Loans 764 88 (182) 670 

HEAL Program Loans 396 29 (38) 387 

Facilities Loan Programs 1,589 54 (226) 1,417 

Total $ 3,364 $ 373 $ (630) $ 3,107 

2019

Federal Perkins Loans $ 532 $ 235 $ (160) $ 607 

TEACH Program Loans 764 99 (247) 616 

HEAL Program Loans 396 33 (34) 395 

Facilities Loan Programs 1,533 29 (198) 1,364 

Total $ 3,225 $ 396 $ (639) $ 2,982 

Federal Perkins Loan Program. Loans made through the Federal Perkins Loan program were low-interest federal student 

loans for undergraduate and graduate students with exceptional financial needs. Schools made these Perkins loans to their 

students and are responsible for servicing the loans throughout the repayment term. Borrowers who undertake certain 

public, military, or teaching service employment are eligible to have all or part of their loans cancelled. 

The Perkins Loan program was a revolving loan program where the loan repayments collected from former students were 

utilized to make new loans to current students. The Department provided most of the capital used by schools to make 

these loans to eligible students. Participating schools provided the remaining program funding. In some statutorily defined 

cases, funds were provided by the Department to reimburse schools for loan cancellations. The above schedule includes only 

Perkins loans which were assigned to the Department when schools discontinued their participation in the program. For 

these assigned Perkins loans, collections of principal, interest, and fees, net of amounts paid to cover contract collection costs 

totaled $38 million and $80 million for FY 2020 and FY 2019, respectively.

The Federal Perkins Loan Program Extension Act of 2015 (Extension Act) eliminated the authorization for schools to make 

new Perkins loan disbursements as of September 30, 2017, and ended all Perkins loan disbursements by June 30, 2018. 

Prior to the authority for new Perkins loans ending, collections made by the schools would go back into each school’s 

Perkins fund to be utilized to make more loans. Schools are required to return to the Department the federal share of any 

excess beyond what is needed (excess liquid capital). 

Schools are not required to liquidate and close out their programs now that no new Perkins loans are being made. Schools 

continue to take in collections and are required to return the federal share of the capital that is collected to the Department 

on an annual basis. Schools returned $1,279 million and $10 million to the Department in FY 2020 and FY 2019, 

respectively, for the federal share of collected cash. 

Schools will continue to service outstanding Perkins loans to recover the money they contributed to their Perkins funds for 

as long as it is feasible to do so or until the eventual wind-down of their portfolios. Schools that liquidate and close out their 

programs must transfer any outstanding portfolio to the Department and liquidate any final cash. Most recent data from 

the 2018-2019 reporting year shows a $5.2 billion outstanding principal balance on Perkins loans held by schools, and the 

Department’s equity interest on this portfolio is $4.3 billion.

The amounts collected by the Department annually for defaulted Perkins loans and for the return of the federal share of 

schools’ Perkins capital contributions are returned to the Treasury General Fund (see Note 12).
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

66 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

TEACH Subsidy Rates—Cohort 2020

Interest Differential Defaults Fees Other Total

Subsidy Rates 70.46% 0.35% 0.00% -41.88% 28.93%

HEAL Program. The Department assumed responsibility in FY 2014 for the HEAL program and the authority to 

administer, service, collect, and enforce the program. The HEAL program is structured as required by the FCRA. A 

liquidating account is used to record all cash flows to and from the government resulting from guaranteed HEAL loans 

committed prior to 1992. All loan activity for 1992 and beyond is recorded in corresponding financing accounts. The 

relief for borrowers provided by the Executive Action and the Department’s extension of the CARES Act provisions for loan 

deferrals resulted in upward modification costs of $1 million and $2 million, respectively.

Facilities Loan Programs. The Department also administers the HBCU Capital Financing program. Since 1992, this 

program has given HBCUs access to financing for the repair, renovation, and in exceptional circumstances, the construction 

or acquisition of facilities, equipment, and infrastructure through federally insured bonds. The Department has authorized 

a designated bonding authority to make loans to eligible institutions, charge interest, and collect principal and interest 

payments. In compliance with HEA, as amended, the bonding authority maintains an escrow account to pay the principal 

and interest on bonds for loans in default. 

The total amount of support for HBCU programs, along with any accrued interest and unpaid servicing fees, will be 

capitalized to principal and be reamortized through the original maturity date of June 1, 2037. The Department has 

approximately $1.5 billion in outstanding borrowing from the FFB to support loans made to HBCU institutions and $453 

million obligated to support near term lending as of September 30, 2020.

The CARES Act authorized the Secretary to grant a deferment to HBCU institutions that have loans under the HBCU 

Capital Financing for the duration of the national emergency period. The relief for HBCU institutions provided by the 

CARES Act resulted in an upward modification cost of $32 million.

The Department administers the College Housing and Academic Facilities Loan program, the College Housing Loan program, 

and the Higher Education Facilities Loan program. From 1952 to 1993, these programs provided low-interest financing to 

IHEs for the construction, reconstruction, and renovation of housing, academic, and other educational facilities.

TEACH Grant Program. The Department awards annual grants of up to $4,000 to eligible undergraduate and graduate 

students who agree to serve as full-time mathematics, science, foreign language, bilingual education, special education, 

or reading teachers at high-need schools for four years within eight years of graduation. The maximum lifetime grant for 

students is $16,000 for undergraduate programs and $8,000 for graduate programs. For students failing to fulfill the service 

requirement, the grants are converted to direct unsubsidized Stafford Loans. The relief for borrowers provided by the CARES 

Act and Executive Action loan deferrals resulted in upward modification costs of $11 million and $5 million, respectively. 

The regulatory action to provide Total and Permanent Disability discharges resulted in an upward modification of less than 

$0.1 millions.

*

 The Other component reflects costs associated with loan cancellations and the interactive effects of payment plans on the components of subsidy.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 67

NOTE 6. Liabilities Not Covered by Budgetary Resources 

(Dollars in Millions)

2020 2019

Intragovernmental With the Public Intragovernmental With the Public

Liabilities Not Covered by Budgetary Resources

 Other Liabilities

 Accrued Unfunded Annual Leave $ - $ 47 $ - $ 35 

 FECA Liabilities 2 13 3 11 

Total Liabilities Not Covered by Budgetary Resources 2 60 3 46 

Liabilities Not Requiring Budgetary Resources

 Subsidy Due to Treasury General Fund 1,451 - 1,239 - 

 Federal Perkins Loan Program 619 - 593 - 

 Miscellaneous Receipt, Deposit Funds and Clearing Accounts 36 239 123 303 

Total Liabilities Not Requiring Budgetary Resources 2,106 239 1,955 303 

Total Liabilities Covered by Budgetary Resources 1,255,189 6,859 1,300,035 11,864 

Total Liabilities $ 1,257,297 $ 7,158 $ 1,301,993 $ 12,213 

NOTE 7. Debt

(Dollars in Millions)

Beginning Balance Borrowing Repayments Accrued Interest Ending Balance

2020

Debt to Treasury

 Direct Loan Program $ 1,192,138 $ 116,883 $ (148,922) $ - $ 1,160,099 

 FFEL Program 94,671 10,997 (16,682) - 88,986 

 Other Credit Programs for Higher Education 702 154 (72) - 784 

 Total Debt to Treasury 1,287,511 128,034 (165,676) - 1,249,869 

Debt to the Federal Financing Bank

 Other Credit Programs for Higher Education 1,482 165 (142) 13 1,518 

Total $ 1,288,993 $ 128,199 $ (165,818) $ 13 $ 1,251,387 

2019

Debt to Treasury

 Direct Loan Program $ 1,150,610 $ 137,583 $ (96,055) $ - $ 1,192,138 

 FFEL Program 107,261 - (12,590) - 94,671 

 Other Credit Programs for Higher Education 609 123 (30) - 702 

 Total Debt to Treasury 1,258,480 137,706 (108,675) - 1,287,511 

Debt to the Federal Financing Bank

 Other Credit Programs for Higher Education 1,473 74 (65) - 1,482 

Total $ 1,259,953 $ 137,780 $ (108,740) $ - $ 1,288,993 

The Department borrows from Treasury’s Bureau of the Public Debt and the Federal Financing Bank to fund the 

disbursement of new loans and the payment of credit program outlays and related costs. During FY 2020, debt decreased 

2.9 percent from $1,289.0 billion in the prior year to $1,251.4 billion. The Department makes periodic principal payments 

after considering the cash position and liability for future outflows in each cohort of loans, as mandated by the FCRA.

Approximately 92.7 percent of the Department’s debt, as of September 30, 2020, is attributable to the Direct Loan 

program. The majority of the net borrowing activity (borrowing less repayments) for the year was designated for funding 

new Direct Loan disbursements.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

68 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

NOTE 9. Other Liabilities

(Dollars in Millions)

2020 2019

Intragovernmental With the Public Intragovernmental With the Public

Accounts Payable $ - $ 3,773 $ - $ 3,765 

Accrued Grant Liability - 1,939 - 2,637 

Guaranty Agencies’ Funds Due to Treasury 1,943 - 1,956 - 

Loan Guarantee Liability - 1,123 - 5,436 

Federal Perkins Loan Program 619 - 593 - 

Miscellaneous Receipt, Deposit Funds and Clearing Accounts 36 239 123 303 

Advances from Others and Deferred Credits 2 - 3 8 

Accrued Unfunded Annual Leave - 47 - 35 

FECA Liabilities 2 13 3 11 

Accrued Payroll and Benefits - 23 - 17 

Employer Contributions and Payroll Taxes 8 1 7 1 

Custodial Liabilities 2 - 1 - 

Total Other Liabilities $ 2,612 $ 7,158 $ 2,686 $ 12,213 

NOTE 8. Subsidy Due to Treasury General Fund 

(Dollars in Millions)

2020 2019

Credit Program Downward Subsidy Re-estimates

 Direct Loan Program $ 1,773 $ 2,718 

 FFEL Program 74 6,345 

Total Credit Program Downward Subsidy Re-estimates 1,847 9,063 

Future Liquidating Account Collections

 FFEL Program 1,436 1,239 

 Other Credit Programs for Higher Education 15 -

Total Future Liquidating Account Collections 1,451 1,239 

Total Subsidy Due to Treasury General Fund $ 3,298 $ 10,302 

During FY 2020, TEACH net borrowing of $59 million was used for the advance of new grants and repayments of 

principal made to Treasury. In FY 2020, debt in HBCU increased by $85 million, or 5.7 percent. This total represents the 

aggregate of new bonds administered and repayments made on previously issued bonds.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 69

NOTE 10. Net Cost of Operations

As required by the GPRA Modernization Act of 2010, the Department’s programs have been aligned with the goals 

presented in the Department’s Strategic Plan as shown below. Goals 3 and 4 in the Strategic Plan are considered crosscutting 

goals, and therefore costs and revenues associated with these activities are included in the net cost programs associated 

with Goals 1 and 2. Programs associated with COVID-19 activities are administered by multiple program offices but are 

summarized separately. (See also Note 11)

Program Offices Strategic Goal Net Cost Program

NET COST STATEMENT PROGRAM ALIGNMENT WITH STRATEGIC PLAN

OESE 

OSERS 

Other: 

 OCTAE

 IES

 OELA

 OCR

Goal 1: Support state and local efforts to improve learning outcomes for all P-12 students in every 

community.

Improve learning 

outcomes for all 

P–12 students

FSA 

OSERS 

Other: 

 OCTAE

 IES

 OPE

 OCR

Goal 2: Expand postsecondary education opportunities, improve outcomes to foster economic 

opportunity and promote an informed, thoughtful, and productive citizenry.

Expand 

postsecondary 

opportunities, improve 

outcomes to foster 

economic opportunity, 

and promote 

productive citizenry

All Offices Goal 3: the quality, accessibility, and use of education data through better management, increased 

privacy protections, and transparency.

Crosscutting Goal

All Offices Goal 4: Reform the effectiveness, efficiency, and accountability of the Department. Crosscutting Goal
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

70 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Gross Costs and Earned Revenue by Program 

(Dollars in Millions)

2020

FSA OESE OSERS COVID-19 Other Total

IMPROVE LEARNING OUTCOMES FOR ALL P–12 STUDENTS

Gross Cost

 Grants $ - $ 22,544 $ 12,801 $ 1,839 $ 2,145 $ 39,329 

 Other - 67 - - 749 816 

Earned Revenue - - - - (129) (129)

Net Program Costs - 22,611 12,801 1,839 2,765 40,016 

EXPAND POSTSECONDARY OPPORTUNITIES, IMPROVE OUTCOMES TO FOSTER ECONOMIC OPPORTUNITY, AND PROMOTE 

PRODUCTIVE CITIZENRY

Direct Loan Program

 Gross Cost

 Credit Program Interest Expense 34,705 - - - - 34,705 

 Subsidy Expense 62,348 - - 38,825 - 101,173 

 Administrative Expenses 1,425 - - - - 1,425 

 Earned Revenue

 Subsidy Expense (2) - - (263) - (265)

 Interest & Administrative Fees (33,110) - - - - (33,110)

 Subsidy Amortization (1,595) - - - - (1,595)

Net Cost of Direct Loan Program 63,771 - - 38,562 - 102,333 

FFEL Program

 Gross Cost

 Credit Program Interest Expense 4,021 - - - - 4,021 

 Subsidy Expense (1,145) - - 3,325 - 2,180 

 Subsidy Amortization (Guaranteed Loans) (1,064) - - - - (1,064)

 Guaranty Agencies 126 - - - - 126 

 Administrative Expenses 156 - - - - 156 

 Earned Revenue

 Subsidy Expense (1) - - (27) - (28)

 Interest & Administrative Fees (2,871) - - - - (2,871)

 Subsidy Amortization (Acquired FFEL Loans) (86) - - - - (86)

 Guaranty Agencies (123) - - - - (123)

Net Cost of FFEL Program (987) - - 3,298 - 2,311 

Other Credit Programs for Higher Education

 Gross Cost

 Credit Program Interest Expense 23 - - - 59 82 

 Subsidy Expense 9 - - 51 - 60 

 Administrative Expenses 2 - - - - 2 

 Earned Revenue

 Subsidy Expense - - - (2) - (2)

 Interest & Administrative Fees (26) - - - (52) (78)

 Subsidy Amortization 1 - - - (5) (4)

 Other (1,281) - - - (3) (1,284)

Net Cost of Other Credit Programs for Higher 

Education (1,272) - - 49 (1) (1,224)

Non-Credit Programs

 Gross Cost

 Grants 28,113 25 3,494 9,420 4,304 45,356 

 Other 348 - 3 10 270 631 

Earned Revenue - - - - (5) (5)

Net Cost of Non-Credit Programs 28,461 25 3,497 9,430 4,569 45,982 

Net Program Costs 89,973 25 3,497 51,339 4,568 149,402 

Total Program Gross Costs 129,067 22,636 16,298 53,470 7,527 228,998 

Total Program Earned Revenues (39,094) - - (292) (194) (39,580)

Net Cost of Operations $ 89,973 $ 22,636 $ 16,298 $ 53,178 $ 7,333 $ 189,418 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 71

Gross Costs and Earned Revenue by Program 

(Dollars in Millions)

2019

FSA OESE OSERS Other Total

IMPROVE LEARNING OUTCOMES FOR ALL P–12 STUDENTS

Gross Cost

 Grants $ - $ 22,873 $ 12,630 $ 2,369 $ 37,872 

 Other - 74 2 784 860 

Earned Revenue - (5) - (37) (42)

Net Program Costs - 22,942 12,632 3,116 38,690 

EXPAND POSTSECONDARY OPPORTUNITIES, IMPROVE OUTCOMES TO FOSTER ECONOMIC OPPORTUNITY, AND PROMOTE 

PRODUCTIVE CITIZENRY

Direct Loan Program

 Gross Cost

 Credit Program Interest Expense 33,817 - - - 33,817 

 Subsidy Expense 61,510 - - - 61,510 

 Administrative Expenses 1,369 - - - 1,369 

 Earned Revenue

 Subsidy Expense - - - - - 

 Interest & Administrative Fees (64,107) - - - (64,107)

 Subsidy Amortization 30,290 - - - 30,290 

Net Cost of Direct Loan Program 62,879 - - - 62,879 

FFEL Program

 Gross Cost

 Credit Program Interest Expense 3,838 - - - 3,838 

 Subsidy Expense 12,654 - - - 12,654 

 Subsidy Amortization (Guaranteed Loans) (1,096) - - - (1,096)

 Guaranty Agencies 212 - - - 212 

 Administrative Expenses 151 - - - 151 

 Earned Revenue

 Subsidy Expense - - - - - 

 Interest & Administrative Fees (4,392) - - - (4,392)

 Subsidy Amortization (Acquired FFEL Loans) 1,650 - - - 1,650 

 Guaranty Agencies (128) - - - (128)

Net Cost of FFEL Program 12,889 - - - 12,889 

Other Credit Programs for Higher Education

 Gross Cost

 Credit Program Interest Expense 22 - - 37 59 

 Subsidy Expense (4) - - 48 44 

 Administrative Expenses 2 - - 16 18 

 Earned Revenue

 Subsidy Expense

 Interest & Administrative Fees (50) - - (49) (99)

 Subsidy Amortization 28 - - 12 40 

 Other (111) - - (1) (112)

Net Cost of Other Credit Programs for Higher Education (113) - - 63 (50)

Non-Credit Programs

 Gross Cost

 Grants 32,208 24 3,559 4,092 39,883 

 Other 182 - 3 263 448 

Earned Revenue - - (1) (9) (10)

Net Cost of Non-Credit Programs 32,390 24 3,561 4,346 40,321 

Net Program Costs 108,045 24 3,561 4,409 116,039 

Total Gross Costs 144,865 22,971 16,194 7,609 191,639 

Total Earned Revenues (36,820) (5) (1) (84) (36,910)

Net Cost of Operations $ 108,045 $ 22,966 $ 16,193 $ 7,525 $ 154,729 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

72 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Gross Interest 

Expense

Subsidy 

Amortization

Net Interest 

Expense

Gross Interest and Administrative 

Fee Revenue

Subsidy 

Amortization

Net Revenue

Intragovernmental With the Public Intragovernmental With the Public With the Public

2020

Direct Loan Program $ 34,705 $ - $ 34,705 $ 4,786 $ 28,324 $ 1,595 $ 34,705 

FFEL Program 4,021 (1,064) 2,957 1,435 1,436 86 2,957 

Other Credit Programs for 

Higher Education 82 - 82 14 64 4 82 

Total $ 38,808 $ (1,064) $ 37,744 $ 6,235 $ 29,824 $ 1,685 $ 37,744 

2019

Direct Loan Program $ 33,817 $ - $ 33,817 $ 4,082 $ 60,025 $ (30,290) $ 33,817 

FFEL Program 3,838 (1,096) 2,742 905 3,487 (1,650) 2,742 

Other Credit Programs for 

Higher Education 59 - 59 11 88 (40) 59 

Total $ 37,714 $ (1,096) $ 36,618 $ 4,998 $ 63,600 $ (31,980) $ 36,618 

Credit Program Interest Expense and Revenues 

(Dollars in Millions)

Interest expense equals interest revenue plus administrative fees accrued for all credit programs due to subsidy amortization. 

Subsidy amortization is required by the FCRA and accounts for the difference between interest expense and revenue cash 

flows. For direct loans, the allowance for subsidy is adjusted with the offset to interest revenue. For guaranteed loans, the 

liability for loan guarantees is adjusted with the offset to interest expense.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 73

2020 2019

IMPROVE LEARNING OUTCOMES FOR ALL P–12 STUDENTS

CARES Act $ 1,839 $ - 

Education for the Disadvantaged 15,750 16,318 

Special Education—IDEA Grants 12,801 12,630 

School Improvement Programs 4,755 4,477 

Impact Aid 1,466 1,420 

Innovation and Improvement 907 945 

English Language Acquisition 676 749 

Career, Technical, and Adult Education 383 480 

Hurricane Education Recovery 253 345 

Institute of Education Sciences 179 195 

Other 320 313 

 Subtotal 39,329 37,872 

EXPAND POSTSECONDARY OPPORTUNITIES, IMPROVE OUTCOMES TO FOSTER ECONOMIC OPPORTUNITY, AND PROMOTE 

PRODUCTIVE CITIZENRY

 CARES Act $ 9,420 $ - 

 Student Financial Assistance

 Pell Grants 25,882 30,530 

 Federal Work-Study Program 1,203 1,030 

 Federal Supplemental Educational Opportunity Grants 1,028 648 

 Rehabilitation Services 3,133 3,210 

 Higher Education 2,738 2,528 

 Career, Technical, and Adult Education 1,284 1,282 

 Special Education—IDEA Grants 118 124 

 Hurricane Education Recovery 25 24 

 Institute of Education Sciences 42 45 

 Other 483 462 

 Subtotal 45,356 39,883 

Total Grant Costs $ 84,685 $ 77,755 

Grant Expenses by Appropriation

(Dollars in Millions)

The Department has more than 100 grant programs. Descriptions of CARES Act funded grant programs are provided in 

Note 11. Descriptions of non-CARES Act major grant program areas are as follows: 

STUDENT FINANCIAL ASSISTANCE

 Pell Grants—provides need-based grants to students to promote access to postsecondary education. Grant amounts are 

dependent on: the student’s expected family contribution; the cost of attendance (as determined by the institution); the 

student’s enrollment status (full-time or part-time); and whether the student attends for a full academic year or less. Pell 

grants are the single largest source of grant aid for postsecondary education.

 Federal Work-Study Program—provides funds by formula to enable eligible institutions to offer employment to 

students based on financial needs. The program is available to full-time or part-time students and encourages community 

service work. The work is often related to the student’s course of study. This program is administered by the schools 

that participate in the Federal Work-Study program. Hourly earnings under this program must be at least the Federal 

minimum wage. Federal funding, in most cases, pays 75 percent of a student’s hourly wage, with the remaining 25 

percent paid by the employer.

 Federal Supplemental Educational Opportunity Grants—provides funds by formula to enable eligible institutions to 

offer grants to students based on need. Federal grants distributed under this program are administered directly by the 

financial aid office at each participating school.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

74 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Career, Technical, and Adult Education—includes 

programs that are related to adult education and literacy, 

career and technical education, community colleges and 

correctional education.

Impact Aid—provides funds to LEAs to replace the lost 

local revenue that would otherwise be available to educate 

federal connected children. (The property on which the 

children live and their parents work is exempt from local 

property taxes, limiting a central source of revenue used by 

most communities to finance education.)

Innovation and Improvement—includes programs that 

support nontraditional programs that improve student 

achievement and attainment; supports the development of 

educational television and digital media programs targeted 

at preschool and early elementary school children and their 

families to promote early learning and school readiness, 

with a particular interest in reaching low-income children; 

and supports LEAs and their partners in implementing, 

evaluating, and refining tools and approaches for developing 

the non-cognitive skills of middle-grades students in order 

to increase student success. 

English Language Acquisition—provides funds primarily 

by formula to states to improve services for English learners. 

Also provides discretionary funds to support national 

activities, including professional development to increase 

the supply of high-quality teachers of English learners and a 

national clearinghouse on English language acquisition. 

Hurricane Education Recovery—provides onetime emergency-relief grants, funded by supplemental 

appropriations acts enacted in response to specific events, 

to support schools and students directly affected by natural 

disasters. Assists students displaced or disrupted by such 

disasters as well as eligible agencies and institutions that 

require funding to cover unexpected expenses and return to 

normal operations. 

Institute of Education Sciences—provides funding to: 

support research, development, and dissemination activities 

that provide parents, teachers, and schools with evidencebased information on effective educational practices; support 

statistical data collection activities conducted by the National 

Center for Education Statistics; support the ongoing National 

Assessment of Educational Progress and the National 

Assessment Governing Board; support research to build 

the evidence base on improving special education and early 

intervention services and outcomes for infants, toddlers, and 

children with disabilities; and support studies, evaluations, and 

assessments related to IDEA.

Education for the Disadvantaged—primarily consists 

of grants that provide financial assistance through SEAs to 

LEAs and public schools with high numbers or percentages 

of poor children to help ensure that all children meet 

challenging state academic content and student academic 

achievement standards. Also provides funds to states to 

support educational services to children of migratory 

farmworkers and fishers, and to neglected or delinquent 

children and youth in State-run institutions, attending 

community day programs, and correctional facilities.

Special Education—consists primarily of IDEA Grants 

that provide funds by formula to states to assist them in 

providing a free appropriate public education in the least 

restrictive environment for children with disabilities ages 3 

through 21 and assists states in providing early intervention 

services for infants and toddlers birth through age two and 

their families. Also provides discretionary grants to IHEs 

and other nonprofit organizations to support research, 

demonstrations, technical assistance and dissemination, 

technology, personnel development and parent-training, 

and information centers. 

School Improvement Programs—provides funds to SEAs 

to make competitive subgrants to LEAs that demonstrate 

the greatest need for the funds and the strongest 

commitment to use the funds to provide adequate resources 

in order to substantially raise the achievement of students in 

their lowest-performing schools.

Rehabilitation Services—provides funds to states and 

other agencies to support vocational rehabilitation and 

other services to individuals with disabilities to maximize 

their employment, independence, and integration into the 

community and the competitive labor market.

Higher Education—includes Institutional Service 

grants designed to improve academic quality, institutional 

management and fiscal stability, and strengthen physical 

plants and endowments of IHEs, with an emphasis on 

institutions that enroll large proportions of minority and 

financially disadvantaged students. Also includes Student 

Service grant programs supporting low-income, firstgeneration students and individuals with disabilities as 

they progress through the academic pipeline from middle 

school to graduate school, in addition to programs focused 

on college readiness, campus-based childcare, and graduate 

fellowships. Also includes International and Foreign 

Language Education grant and fellowship programs that 

strengthen foreign language instruction, area/international 

studies teaching and research, professional development 

for educators, and curriculum development at the K-12, 

graduate, and postsecondary levels.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 75

NOTE 11. COVID-19 Activity 

(Dollars in Millions)

FY 2020

Appropriation Appropriation 

Transfer Obligated Unobligated Outlays Transfers to 

General Fund

Net Costs 

(See Note 10)

CARES Act

 Education Stabilization Fund

 Elementary and Secondary School 

Emergency Relief Fund $ 13,229 $ - $ 13,229 $ - $ 1,552 $ - $ 1,552 

 Higher Education Emergency Relief 

Fund

 Higher Education Funds to Students 6,279 - 6,188 91 5,382 - 5,396 

 Higher Education Funds to 

Institutions 6,279 - 6,127 152 3,320 - 3,387 

 MSIs 

 Minority Serving Institutions 270 - 265 5 66 - 66 

 Historically Black Colleges & 

Universities 577 - 577 - 161 - 161 

 Tribally Controlled Colleges and 

Universities 50 - 50 - 17 - 17 

 Strengthening Institutions 

Program 149 - 141 8 43 - 43 

 Fund for the Improvement of 

Postsecondary Education 349 - 145 204 64 - 65 

 Governor’s Emergency Education 

Relief Fund 2,953 - 2,905 48 535 - 536 

 Outlying Areas 154 - 154 - 21 - 21 

 Bureau of Indian Education 154 (154) - - - - - 

 Discretionary Grants 307 - 307 - - - - 

 Total Education Stabilization Fund 30,750 (154) 30,088 508 11,161 - 11,244 

 Safe Schools & Citizenship Education 100 - - 100 - - - 

 Gallaudet University 7 - 7 - 2 - 2 

 Howard University 13 - 13 - 13 - 13 

 HBCU Loan Deferment 62 - 32 30 32 - 32 

 Student Aid Administration 40 - 17 23 9 - 9 

 Program Administration 8 - 4 4 - - - 

 Inspector General 7 - - 7 - - - 

 Total CARES Act Direct Appropriations 30,987 (154) 30,161 672 11,217 - 11,300 

 Student Loan Deferrals

 Direct Loan Program 25,246 - 25,246 - 25,246 236 25,010 

 FFEL Program 1,770 - 1,770 - 1,770 15 1,755 

 TEACH Program 11 - 11 - 11 - 11 

 Total CARES Act Student Loan 

Deferrals 27,027 - 27,027 - 27,027 251 26,776 

 Total CARES Act 58,014 (154) 57,188 672 38,244 251 38,076 

Secretary's Discretion Student Loan 

Deferrals

 FFEL Program 496 - 496 - 496 4 492 

 HEAL Program 2 - 2 - 2 - 2 

 Total Secretary's Discretion Student 

Loan Deferrals 498 - 498 - 498 4 494 

Presidential Memorandum Student Loan 

Deferrals

 Direct Loan Program 13,579 - 13,579 - 13,579 27 13,552 

 FFEL Program 1,059 - 1,059 - 1,059 9 1,050 

 HEAL Program 1 - 1 - 1 - 1 

 TEACH Program 5 - 5 - 5 - 5 

 Total Presidential Memorandum 

Student Loan Deferrals 14,644 - 14,644 - 14,644 36 14,608 

Total COVID-19 Activity $ 73,156 $ (154) $ 72,330 $ 672 $ 53,386 $ 291 $ 53,178 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

76 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

The CARES Act provided direct appropriations to the 

Department to fund a variety of programs administered 

primarily through grant programs, as described below. 

Obligated and unobligated CARES Act funds remaining 

to be disbursed total $19.6 billion (see Note 3). Indirect 

appropriations were provided to fund loan modifications 

resulting from student loan deferrals authorized under 

the CARES Act and extended by the Administration’s 

Presidential Memorandum. The Department also extended 

the provisions of the student loan deferrals to guaranteed 

loans not covered by the CARES Act. (See Note 5)

Elementary and Secondary School Emergency Relief 

(ESSER) Fund—$13,229 million provided for SEAs and 

LEAs to support continued learning for K-12 students 

whose education has been disrupted by COVID-19. 

Education leaders have the flexibility to use ESSER funds 

for immediate needs, such as tools and resources for 

distance education, ensuring student health and safety, 

and developing and implementing plans. Local leaders are 

empowered with the flexibility to determine how to use 

their ESSER funds, as long as they are used in ways that 

comply with applicable federal education laws. ESSER 

funds have important safeguards in place to ensure that 

this funding goes to help students continue learning. SEAs 

must allocate 90 percent of their ESSER funds to LEAs, 

including public charter schools, in proportion to the 

amount of FY 2019 funds the LEA received under Title 

I, Part A of the Elementary and Secondary Education 

Act. Up to 10 percent of the SEA’s award may be retained 

for the state agency to use to address needs related to 

responding to COVID-19. After one year, SEAs must 

return any funds that have not been awarded, and the 

Secretary will reallocate those funds to the states.

Higher Education Emergency Relief (HEER) Fund—

$13,953 million provided for IHEs to address needs 

directly related to COVID-19, including transitioning 

courses to distance education and granting aid to 

students for educational costs such as food, housing, 

course materials, health care, and child care. The fund is 

distributed through the following grant programs. 

 Higher Education Funds to Students—$6,279 

million provided institutions to provide emergency 

financial aid grants to students whose lives have 

been disrupted, many of whom are facing financial 

challenges and struggling to make ends meet. 

Institutions have the responsibility of determining 

how grants will be distributed to students, how the 

amount of each student grant is calculated, and the 

development of any instructions or directions that are 

provided to students about the grant. 

 Higher Education Funds to Institutions—$6,279 

million provided to higher education institutions. 

Institutions can use up to one-half of the total funds 

to cover any costs associated with significant changes 

to the delivery of instruction due to COVID-19. 

Institutions are encouraged to use the funds to expand 

remote learning programs, build IT capacity to support 

such programs, and train faculty and staff to operate 

effectively in a remote learning environment. They are 

also encouraged to use the funds to expand support 

for students with the most significant financial needs 

arising from the COVID-19 pandemic, including 

eligible expenses under a student’s cost of attendance, 

such as course materials, technology, health care, 

childcare, food, and housing.

 Minority Serving Institutions (MSIs)—$270 million 

provided to MSIs to defray institutional expenses, 

which may include lost revenue, reimbursement for 

expenses already incurred, technology costs associated 

with the transition to distance education, faculty and 

staff training, and payroll. MSIs include institutions 

that are eligible to participate in the following 

programs: Predominantly Black Institutions, Alaska 

Native and Native Hawaiian-Serving Institutions, 

Asian American and Native American Pacific IslanderServing Institutions, Native American-Serving 

Nontribal Institutions, Developing Hispanic-Serving 

Institutions Program, and Promoting Postbaccalaureate 

Opportunities for Hispanic Americans. MCIs are 

encouraged to use as much of these funds as possible 

to provide students eligible for financial aid with grants 

for any component of the student’s cost of attendance, 

including tuition, course materials, and technology.

 Historically Black Colleges & Universities 

(HBCUs)—$577 million provided to HBCUs to 

defray institutional expenses, which may include lost 

revenue, reimbursement for expenses already incurred, 

technology costs associated with the transition to 

distance education, faculty and staff training, and 

payroll. HBCUs are also encouraged to use as much 

of these funds as possible to provide students eligible 

for financial aid with grants for any component of the 

student’s cost of attendance, including tuition, course 

materials, and technology.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 77

to enable governors to decide how best to meet the needs 

of students, schools (including charter schools and nonpublic schools), postsecondary institutions, and other 

education-related organizations. 

Outlying Areas, Bureau of Indian Education, and 

Discretionary Grants—$615 million provided for 

outlying areas and states with the highest COVID-19 

burdens. These funds are distributed through the following 

grant programs.

 Outlying Areas—$154 million provided for the 

outlying areas of the United States, specifically: the 

U.S. Virgin Islands, Guam, the Commonwealth of 

the Northern Mariana Islands, and American Samoa. 

Money made available from these grants will be used 

in response to COVID-19 and will be calculated via 

formula. Each Outlying Area received two block grants 

from the Education Stabilization Fund—one to the 

Governor’s offices and one to the SEA.

 Bureau of Indian Education—$154 million for 

programs operated by the Bureau of Indian Education 

(BIE), in consultation with the Secretary of Interior. 

The Department transferred these funds to BIE.

 Discretionary Grants—$307.5 million provided to 

states to use to create adaptable, innovative learning 

opportunities for K-12 and postsecondary learners in 

response to the COVID-19 national emergency. 

 Rethink K-12 Education Models Grants—$180 

million aimed at opening new, innovative ways for 

students to access K-12 education with an emphasis 

on meeting students’ needs during the COVID-19 

national emergency.

 Reimagining Workforce Preparation 

Grants—$127 million to expand short-term 

postsecondary programs and work-based learning 

programs in order to get Americans back to work 

and help small businesses return to being our 

country’s engines for economic growth. 

In addition to the Education Stabilization Fund, the 

CARES Act also included funding for the following.

Safe Schools & Citizenship Education—$100 million 

additional funding for this program to prevent, prepare for, 

and respond to COVID-19, including disinfecting affected 

schools, and assisting in counseling and distance learning.

 Tribally Controlled Colleges and Universities 

(TCCUs)—$50 million provided to TCCUs to 

defray institutional expenses, which may include lost 

revenue, reimbursement for expenses already incurred, 

technology costs associated with the transition to 

distance education, faculty and staff training, and 

payroll. TCCUs are also encouraged to use as much 

of these funds as possible to provide students eligible 

for financial aid with grants for any component of the 

student’s cost of attendance, including tuition, course 

materials, and technology. 

 Strengthening Institutions Program—$149 million 

provided to institutions that are not participating 

in the MSI programs but have at least 50 percent of 

their degree students receiving need-based assistance 

under Title IV of the Higher Education Act or have 

a substantial number of enrolled students receiving 

Pell Grants, and have low educational and general 

expenditures. These funds can be used to defray 

institutional expenses, which may include lost 

revenue, reimbursement for expenses already incurred, 

technology costs associated with the transition to 

distance education, faculty and staff training, and 

payroll. These institutions are encouraged to use as 

much of these funds as possible to provide students 

eligible for financial aid with grants for any component 

of the student’s cost of attendance, including tuition, 

course materials, and technology. 

 Fund for the Improvement of Postsecondary 

Education (FIPSE)—$349 million provided for this 

grant program which supports projects to encourage 

innovative reform and expand education opportunities 

to underrepresented groups. Institutions can use these 

additional FIPSE funds to defray institutional expenses, 

which may include lost revenue, reimbursement for 

expenses already incurred, technology costs associated 

with the transition to distance education, faculty 

and staff training, and payroll. Institutions are also 

encouraged to use as much of these funds as possible 

to provide students eligible for financial aid with grants 

for any component of the student’s cost of attendance, 

including tuition, course materials, and technology.

Governor’s Emergency Education Relief (GEER) 

Fund—$2,953 million provided to state governors 

to ensure education continues for students of all ages 

impacted by the COVID-19 national emergency. The 

GEER Fund is a flexible emergency block grant designed 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

78 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Student Aid Administration—$40 million provided to 

fund the additional costs of administering the CARES Act

provisions affecting student financial aid programs.

Program Administration—$8 million provided to the 

Department to fund costs of administrating the CARES Act.

Inspector General—The CARES Act appropriated $7 

million for salaries and expenses necessary for Office 

of Inspector General oversight and audit of CARES Act

programs, grants, and projects.

Gallaudet University—$7 million to help address 

challenges associated with COVID-19.

Howard University—$13 million to help address 

challenges associated with COVID-19.

HBCU Loan Deferment—$62 million provided to 

fund the deferment of loan repayments for HBCUs that 

were provided low-cost capital financing for campus 

maintenance and construction projects. During the 

period of the deferment, the Department is required to 

pay the required principal and interest due. At the end 

of the deferment, the HBCU is required to repay the 

Department for payments made on its behalf.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 79

Unused Borrowing Authority 

(Dollars in Millions)

2020 2019

Beginning Balance, Unused Borrowing Authority $ 55,845 $ 62,752 

Current Year Borrowing Authority 135,589 148,493 

Funds Drawn from Treasury (128,200) (137,880)

Borrowing Authority Withdrawn (15,004) (17,520)

Ending Balance, Unused Borrowing Authority $ 48,230 $ 55,845 

The Department is given authority to draw funds from Treasury to finance the Direct Loan, FFEL, and other loan programs. 

Unused borrowing authority is a budgetary resource and is available to support obligations for these programs. The 

Department periodically reviews its borrowing authority balances in relation to its obligations, resulting in the withdrawal of 

unused amounts.

Undelivered Orders

(Dollars in Millions)

2020 2019

Intragovernmental With the Public Intragovernmental With the Public

Unpaid $ 180 $ 138,621 $ 215 $ 121,561 

Paid 121 503 64 563 

Undelivered Orders $ 301 $ 139,124 $ 279 $ 122,124 

Net Adjustments to Unobligated Balances Brought Forward

(Dollars in Millions)

2020 2019

Budgetary

Non-Budgetary 

Credit Reform 

Financing Accounts

Budgetary

Non-Budgetary 

Credit Reform 

Financing Accounts

Prior Year Unobligated Balance, End of Year (Total) $ 16,774 $ 18,324 $ 17,850 $ 23,728 

Recoveries of Prior Year Unpaid Obligations 1,426 18,220 1,158 24,841 

Borrowing Authority Withdrawn - (15,004) - (17,520)

Actual Repayments of Debt, Prior-Year Balances - (12,720) - (16,261)

Actual Capital Transfers to the Treasury General Fund (265) - (328) - 

Canceled Authority (305) - (405) - 

Downward Adjustments of Prior-Year Paid Delivered Orders 128 301 6 342 

Other Differences (2) (2) (50) (103)

Unobligated Balance from Prior Year Budget Authority (Net) $ 17,756 $ 9,119 $ 18,231 $ 15,027 

NOTE 12. Statements of Budgetary Resources

The SBR compares budgetary resources with the status of those resources. As of September 30, 2020, budgetary resources 

were $473.2 billion and net agency outlays were $161.5 billion. As of September 30, 2019, budgetary resources were $358.2 

billion and net agency outlays were $144.5 billion.

During the years ended September 30, 2020 and September 30, 2019, certain adjustments were made to the balance of 

unobligated budgetary resources available as of October 1, 2019 and October 1, 2018. These adjustments included, among 

other things, recoveries of prior year unpaid obligations that result from downward adjustments of undelivered orders that 

were obligated in a prior fiscal year.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

80 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Distributed Offsetting Receipts

(Dollars in Millions)

2020 2019

Negative Subsidies and Downward Re-estimates of Subsidies:

 Direct Loan Program $ 5,382 $ 9,906 

 FFEL Program 6,865 2,099 

 HEAL Program - 34 

 TEACH Program 36 1 

 Facilities Loan Programs 48 5 

 Total Negative Subsidies and Downward Re-estimates 12,331 12,045 

Repayment of Perkins Loans and Capital Contributions 1,317 90 

Other (38) 138 

Distributed Offsetting Receipts $ 13,610 $ 12,273 

The majority of the distributed offsetting receipts line item on the SBR represents amounts paid from the Direct Loan 

program and FFEL program financing accounts to Treasury General Fund receipt accounts for downward current fiscal year 

executed subsidy re-estimates and negative subsidies.

Reconciliation of SBR to Budget of the United States Government

(Dollars in Millions)

Budgetary 

Resources

New Obligations 

and Upward 

Adjustments 

(Total)

Distributed Offsetting 

Receipts Net Outlays

Combined Statements of Budgetary Resources $ 358,215 $ 323,117 $ 12,273 $ 104,363 

 Expired Funds (1,859) (551) - - 

 FFEL Guaranty Agency Amounts Included in the 

President’s Budget 7,342 7,341 - - 

 Distributed Offsetting Receipts - - - 12,273 

 Other (2) - 1 4 

Budget of the United States Government1 $ 363,696 $ 329,907 $ 12,274 $ 116,640 

1

 Amounts obtained from the Appendix, Budget of the United States Government, FY 2021.

The FY 2022 Budget of the United States Government (President’s Budget), which presents the actual amounts for the 

year ended September 30, 2020, has not been published as of the issue date of these financial statements. The FY 2022 

President’s Budget is scheduled for release in February 2021 and will be made available on OMB’s website. The table above 

reconciles the FY 2019 SBR to the FY 2021 President’s Budget (FY 2019 actual amounts) for budgetary resources, new 

obligations and upward adjustments, distributed offsetting receipts, and net outlays.

Reconciling differences exist because the President’s Budget excludes expired funds. Additionally, the President’s Budget 

includes a public enterprise fund that reflects the gross obligations by the FFEL program for the estimated activity of the 

consolidated federal fund of the guaranty agencies. Ownership by the federal government is independent of the actual 

control of the assets. Since the actual operation of the federal fund is independent from the Department’s direct control, 

budgetary resources and new obligations and upward adjustments are estimated and disclosed in the President’s Budget 

to approximate the gross activities of the combined federal fund. Amounts reported on the SBR for the federal fund are 

compiled by combining all guaranty agencies’ annual reports to determine a net valuation amount for the federal fund.

Undelivered orders represent the amount of goods and/or services ordered which have not been actually or constructively 

received. Paid amounts include any orders which may have been prepaid or advanced but for which delivery or performance 

has not yet occurred.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 81

NOTE 13. Reconciliation of Net Cost to Net Outlays

(Dollars in Millions)

2020 2019

IntragovernmentalWith the 

Public Total Intragovernmental

With the 

Public Total

Net Cost of Operations $ 33,158 $ 156,260 $ 189,418 $ 33,374 $ 121,355 $ 154,729 

Components of Net Operating Cost Not Part of the Net 

Budgetary Outlays

Excess of Accrual-Basis Expenses Over Budget 

Outlays

Current-Year Subsidy Expense - (52,571) (52,571) - (67,225) (67,225)

Loan Modification Adjustment Transfer Gains/

(Losses), Net - (54) (54) - 1 1

Federal Employee Retirement Benefit Costs Paid by 

OPM and Imputed to Agency (30) - (30) (37) - (37)

Other Liabilities 64 600 664 (142) (632) (774)

Excess of Accrual-Basis Revenue Over Budget 

Receipts

Accounts Receivable 1 (43) (42) 1 16 17 

Offset to Non-Entity Accrued Collections - (42) (42) - 17 17 

Total Components of Net Operating Cost Not Part of 

the Net Budgetary Outlays 35 (52,110) (52,075) (178) (67,823) (68,001)

Components of the Net Budgetary Outlays Not Part of 

Net Operating Costs

Current-Year Budget Subsidy Costs - 67,225 67,225 - 17,954 17,954 

Other Loan Activities, Net - (150) (150) - 31 31 

Other Assets 57 (16) 41 (87) (222) (309)

Financing Sources Transferred In from Custodial 

Statement Collections (12) - (12) (15) - (15)

Total Components of the Net Budgetary Outlays Not 

Part of Net Operating Costs 45 67,059 67,104 (102) 17,763 17,661 

Other Reconciling Differences

Increase/(Decrease) in Deposit Funds - (32) (32) - (26) (26)

Total Other Reconciling Differences - (32) (32) - (26) (26)

Net Outlays (Calculated Total) $ 33,238 $ 171,177 $ 204,415 $ 33,094 $ 71,269 $ 104,363 

Related Amounts on the Statement of Budgetary 

Resources

Outlays, Net (Discretionary and Mandatory) 218,025 116,636 

Distributed Offsetting Receipts (13,610) (12,273)

Agency Outlays, Net (Discretionary and Mandatory) $ 204,415 $ 104,363 

This reconciliation explains the relationship between the Department’s net cost of operations and its net outlays. Reconciling 

items result from transactions which did not result in a current period outlay but did result in a current period cost, and current 

period outlays that did not result in a current period cost. 

Disbursements for new FCRA loans and collections of principal and interest on existing FCRA loans are recorded in nonbudgetary credit reform financing accounts. These disbursements and collections are reported on the Statement of Budgetary 

Resources as disbursements, net, and not as agency outlays, net. Since these disbursements and collections affect neither net 

cost of operations nor agency outlays, net, they are excluded from this reconciliation as are any increases or decreases in the 

FCRA loan receivable balances. 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

82 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

GUARANTY AGENCIES

The Department may assist guaranty agencies experiencing 

financial difficulties. The Department has not done so 

in fiscal years 2020 or 2019 and does not expect to in 

future years. No provision has been made in the financial 

statements for potential liabilities.

LITIGATION AND OTHER CLAIMS

The Department is involved in various lawsuits incidental 

to its operations. In the opinion of management, the 

ultimate resolution of pending litigation will not have a 

material impact on the Department’s financial position. 

As appropriate, the Department would seek recovery from 

Treasury’s Judgment Fund for any loss in litigation that 

may occur. The Judgment Fund is a permanent, indefinite 

appropriation available to pay judgments against the 

government, if appropriated funds cannot be used. 

The cost of loan forgiveness related to borrower defense 

claims reflected in the accompanying financial statements 

is limited to loans originated through September 30, 

2020. The final disposition of claims filed and those yet 

to be filed from loans originated before September 30, 

2020, is not expected to have a material impact on these 

financial statements.

OT H ER M AT T ER S 

Some portion of the current-year financial assistance 

expenses (grants) may include funded recipient 

expenditures that are subsequently disallowed through 

program review or audit processes. In the opinion of 

management, the ultimate disposition of these matters 

will not have a material effect on the Department’s 

financial position.

The Department leases from the General Services 

Administration all or a portion of 13 privately owned and 

12 publicly owned buildings in 20 cities. The table above 

presents the estimated future minimum lease payments for 

these privately and publicly owned buildings.

Future Minimum Lease Payments

(Dollars in Millions)

2020 2019

2021 $ 72 2020 $ 73 

2022 75 2021 78 

2023 77 2022 81 

2024 74 2023 83 

2025 75 2024 86 

After 2025 77 After 2024 87 

Total $ 450 Total $ 488

The two major reconciling differences, both associated with 

the Department’s FCRA loan programs, are for current-year 

subsidy accrual costs and current-year budget subsidy costs.

 Current-year subsidy accrual costs are the portion 

of the current-year loan subsidy re-estimates not 

impacting the current year outlays.

 Current-year budget subsidy costs are current year 

indirect appropriations provided to fund subsidy costs 

accrued in the prior year. This includes the portion 

of the current year’s executed President’s budget reestimates not included in this year’s net cost 

subsidy expense. 

NOTE 14. Commitments and Contingencies

The Department discloses contingencies where any of 

the conditions for liability recognition are not met and 

there is at least a reasonable possibility that a loss or an 

additional loss may have been incurred in accordance 

with FASAB Standard No. 5, Accounting for Liabilities of 

the Federal Government. The following commitments are 

amounts for contractual arrangements that may require 

future financial obligations.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 83

NOTE 15. Reclassification of Balance Sheet, 

Statement of Net Cost, and Statement of 

Operations and Changes in Net Position for 

FR Compilation Process

To prepare the Financial Report of the U.S. Government 

(FR), Treasury requires agencies to submit an adjusted 

trial balance, which is a listing of accounts that appear in 

the financial statements. Treasury uses the trial balance 

information reported in the Governmentwide Treasury 

Account Symbol Adjusted Trial Balance System to develop 

a Reclassified Balance Sheet, Reclassified Statement of 

Net Cost, and a Reclassified Statement of Operations and 

Changes in Net Position for each agency, all of which show 

how agency amounts are related to particular FR statement 

line items. Treasury eliminates all intragovernmental 

balances from the reclassified statements and aggregates lines 

with the same title to develop the FR statements. 

The three schedules in this note show the Department’s 

financial statements and the Department’s reclassified 

statements prior to elimination of intragovernmental 

balances and prior to aggregation of repeated FR line items. 

The term “Non-Federal” is used in this note to refer to 

Federal government amounts that result from transactions 

with non-Federal entities. These include transactions with 

individuals, businesses, non-profit entities, and state, local, 

and foreign governments.

A copy of the September 30, 2019 FR can be found on 

Treasury’s website and a copy of the September 30, 2020 FR 

will be posted to this site as soon as it is released.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

84 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Reclassification of Balance Sheet to Line Items Used for the Government-wide Balance Sheet

as of September 30, 2020

(Dollars in Millions)

 FY 2020 Department Balance Sheet Line Items Used to Prepare FY 2020 Government-wide

 Balance Sheet

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

ASSETS ASSETS

Intragovernmental: Intragovernmental:

 Fund Balance with Treasury $ 136,015 $ 136,015 Fund Balance with Treasury

 Other Intragovernmental Assets 124 3 Accounts Receivable

 121 Other Advances and Repayments

Total Intragovernmental 136,139 136,139 Total Intragovernmental Assets

Public: Non-Federal:

 Credit Program Receivables, Net

 Direct Loan Program 1,100,544 1,100,544 Direct Loan and Loan Guarantees, Net

 FFEL Program 67,380 67,380 Direct Loan and Loan Guarantees, Net

 Other Credit Programs for Higher Education 3,107 3,107 Direct Loan and Loan Guarantees, Net

 Other Assets 2,216 1,943 Cash and Other Monetary Assets

 6 General Property, Plant, and Equipment, Net

 234 Accounts Receivable, Net

 33 Other Assets

Total Public 1,173,247 1,173,247 Total Non-Federal Assets

Total Assets $ 1,309,386 $ 1,309,386 Total Assets

LIABILITIES LIABILITIES

Intragovernmental: Intragovernmental:

 Debt

 Direct Loan Program $ 1,160,099 $ 1,160,099 Debt Associated with Loans

 FFEL Program 88,986 88,986 Debt Associated with Loans

 Other Credit Programs for Higher Education 2,302 2,302 Debt Associated with Loans

 Subsidy Due to Treasury General Fund 3,298 3,298 Other Liabilities

 Other Intragovernmental Liabilities 2,612 9 Accounts Payable

 2,603 Other Liabilities

Total Intragovernmental 1,257,297 1,257,297 Total Intragovernmental Liabilities

Public:

 Other Liabilities 7,158 1,123 Loan Guarantee Liabilities

 3,773 Accounts Payable

 61 Federal Employee and Veteran Benefits

 2,201 Other Liabilities

Total Public 7,158 7,158 Total Non-Federal Liabilities

Total Liabilities $ 1,264,455 $ 1,264,455 Total Liabilities

NET POSITION NET POSITION

 Unexpended Appropriations $ 99,314 $ 99,314 Unexpended Appropriations - Funds Other Than Those 

from Dedicated Collections

 Cumulative Results of Operations (54,383) (54,383) Cumulative Results of Operations - Funds Other Than 

Those from Dedicated Collections 

Total Net Position $ 44,931 $ 44,931 Total Net Position

Total Liabilities & Net Position $ 1,309,386 $ 1,309,386 Total Liabilities & Net Position
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 85

Reclassification of Statement of Net Cost to Line Items Used for the Government-wide Statement

of Net Cost for the Year Ending September 30, 2020

(Dollars in Millions)

FY 2020 Department Statement of Net Cost Line Items Used to Prepare FY 2020 Government-wide 

Statement of Net Cost

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

Total Gross Cost $ 228,998 $ 189,605 Non-Federal Gross Cost

 124 Benefit Program Costs

 30 Imputed Costs

 410 Buy/Sell Cost

 38,808 Borrowing and Other Interest Expense

 7 Borrowing losses

 14 Other Expenses (Without Reciprocals)

 Total Program Gross Cost $ 228,998 $ 228,998 Department Total Gross Cost

Total Earned Revenue $ (39,580) $ (33,345) Non-Federal Earned Revenue

 (6,235) Borrowing and Other Interest Revenue (Exchange)

 Total Earned Revenue (39,580) (39,580) Department Total Earned Revenue

 Net Cost of Operations $ 189,418 $ 189,418 Net Cost of Operations

Reclassification of Statement of Changes in Net Position to Line Items Used for the

Government-wide Statement of Operations and Changes in Net Position for the Year

Ending September 30, 2020 

(Dollars in Millions)

FY 2020 Department Statement of Changes in Net Position Line Items Used to Prepare FY 2020 Government-wide 

Statement of Operations and Changes in Net Position

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

Unexpended Appropriations

 Beginning Balance $ 72,757 $ 72,757 Net Position, Beginning of Period

 Appropriations Received 245,237 244,366 

Appropriations Received as Adjusted (Rescissions and 

Other Adjustments)

 Other Adjustments (Rescissions, etc.) (871)

 Appropriations Transferred (154) (154)

Non-Expenditure Transfers-out of Unexpended 

Appropriations and Financing Sources

 Appropriations Used (217,655) (217,655) Appropriations Used

 Unexpended Appropriations, Ending Balance $ 99,314 $ 99,314 

Cumulative Results of Operations

 Beginning Balance $ (76,267) $ (76,267) Net Position, Beginning of Period

 Appropriations Used 217,655 217,655 Appropriations Expended

 Nonexchange Revenue 11 11 

Collections Transferred Into a TAS Other Than the 

General Fund of the U.S. Government

 Imputed Financing from Costs Absorbed by Others 30 30 Imputed Financing Sources

 Negative Subsidy Transfers, Downward Subsidy 

 Re-estimates, and Other (6,394) (14,364)

Non-Entity Collections Transferred to the General Fund 

of the U.S. Government

 7,252 

Accrual for Non-Entity Amounts to be Collected and 

Transferred to the General Fund of the U.S. Government

 6 Other Taxes and Receipts

 711 Other Budgetary Financing Sources

 1 Other Non-Budgetary Financing Sources

 Net Cost of Operations (189,418) (189,418) Net Cost of Operations

 Cumulative Results of Operations, 

 Ending Balance $ (54,383) $ (54,383)

 Net Position $ 44,931 $ 44,931 Net Position, End of Period