38 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

lenders to eligible students. The Student Aid and Fiscal 

Responsibility Act (SAFRA), which was included in the 

Health Care and Education Reconciliation Act of 2010

(HCERA), 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 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 (ESEA), Federal Pell Grant (Pell Grant), and the 

Individuals with Disabilities Education Act (IDEA) grants. 

In addition, the Department offers other discretionary 

grants under 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)

FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS 

ENDED SEPTEMBER 30, 2019 AND 2018

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 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 

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 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 39

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 Department’s financial statements should be read as 

a component of the U.S. government, a sovereign entity. 

One of the many implications of this is that the liabilities 

cannot be liquidated without legislation providing 

resources and legal authority to do so.

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. 

ACCOUNTING FOR FEDERAL CREDIT PROGRAMS 

The Department’s accounting for its loan and loan 

guarantee programs is based on the requirements of the 

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). 

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 and local educational agencies 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 local educational agencies 

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 local educational activities and institutions 

of higher education for reform, strategic investment, 

and innovation in education include: the Office of 

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)

BASIS OF ACCOUNTING 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 SECTION | NOTES TO THE FINANCIAL STATEMENTS

40 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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 11 and 12)

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 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 7.8 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.

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.

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.

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 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 41

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 and D 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 

current Budget of the United States Government presumes 

all programs continue in accordance with congressional 

budgeting rules. (See Note 11)

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)

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 

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. 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

42 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

CREDIT PROGRAM RECEIVABLES, NET AND 

LIABILITIES FOR LOAN GUARANTEES 

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. 

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)

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)

GUARANTY AGENCIES’ 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, 

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)
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 43

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) 

SUBSIDY DUE TO TREASURY 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 

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)

PROPERTY AND EQUIPMENT, 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 13)

LIABILITIES

Liabilities represent actual and estimated amounts to 

be paid as a result of transactions or events that have 

already occurred.

 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)
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

44 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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 30, 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)

INTER-ENTITY 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 

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)

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)

PERSONNEL COMPENSATION AND 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 

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.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 45

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 as a 

receiving (child) entity with the Department of Health 

and Human Services (HHS). 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 (HHS) from 

which the underlying legislative authority, appropriations, 

and budget apportionments are derived. 

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.

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 

Credit Program Subsidy Expense. Subsidy expense is an 

estimate of the present value cost of providing loans, but 

excludes 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.

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 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

46 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Student Loan Data System (NSLDS®) data, data from the Debt Management and Collection System (DMCS), 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 Department’s modeling methodology 

is essential to the budget process, so that the Department can forecast the costs of various program options when making 

policy decisions. (See Note 5)

NOTE 2. Non-Entity Assets

2019 2018

Intragovernmental With the Public Intragovernmental With the Public

Non-Entity Assets

Fund Balance with Treasury $ 294 $ - $ 310 $ - 

Credit Program Receivables, Net - 607 - 551 

Other Assets

 Guaranty Agencies’ Federal Funds - 1,956 - 2,176 

 Accounts Receivable, Net - 84 - 65 

Total Non-Entity Assets 294 2,647 310 2,792 

Entity Assets 104,690 1,203,065 114,446 1,210,434 

Total Assets $ 104,984 $ 1,205,712 $ 114,756 $ 1,213,226 

(Dollars in Millions)

The Department’s FY 2019 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 (73.9 percent), reported as 

Guaranty Agencies’ Federal Funds, and Federal Perkins Loan program loan receivables (22.9 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)
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 47

NOTE 3. Fund Balance with Treasury 

(Dollars in Millions)

2019 2018

Unobligated Balance

 Available $ 13,578 $ 14,495 

 Unavailable 19,564 24,907 

Obligated Balance, Not Disbursed 127,291 137,680 

Authority Temporarily Precluded from Obligation 1 1 

Borrowing Authority Not Yet Converted to Fund Balance with Treasury (Note 11) (55,845) (62,752)

Other 329 274 

Total Fund Balance with Treasury $ 104,918 $ 114,605 

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 ($19.5 

billion) differs from unapportioned and expired amounts on the SBR ($21.5 billion) due to the Guaranty Agencies’ 

Federal Funds ($2.0 billion).

NOTE 4. Other Assets 

(Dollars in Millions)

2019 2018

Intragovernmental With the Public Intragovernmental With the Public

Guaranty Agencies’ Federal Funds $ - $ 1,956 $ - $ 2,176 

Accounts Receivable, Net 2 251 1 154 

Advances 64 35 150 15 

Property and Equipment, Net - 8 - 29 

Other - 6 - 3 

Total Other Assets $ 66 $ 2,256 $ 151 $ 2,377 

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, 2019, related to criminal restitutions totaled $106.3 million and ($95.2) million, respectively.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

48 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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

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

2018 

Direct Loan Program $ 1,083,735 $ 71,981 $ (40,663) $ 1,115,053 

FFEL Program 95,083 21,116 (23,252) 92,947 

Other Credit Programs for Higher Education 3,108 437 (696) 2,849 

Total Credit Receivables $ 1,181,926 $ 93,534 $ (64,611) $ 1,210,849 

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. What follows is additional 

analysis of the activity, costs and adjustments for each of the loan programs.

DIRECT LOAN PROGRAM. 

The federal government makes loans directly to students and parents through participating institutions of higher education 

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 $1,248.1 

billion in gross loan receivables, as of September 30, 2019, $99.7 billion (8.0 percent) in loan principal was in default and 

had been transferred to the Department’s defaulted loan servicer, compared to $84.9 billion (7.3 percent) as of September 

30, 2018.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 49

Direct Loan Program Reconciliation of Allowance for Subsidy 

(Dollars in Millions)

2019 2018

Beginning Balance, Allowance for Subsidy $ 40,663 $ 16,805 

Activity

 Fee Collections 1,693 1,696 

 Loan Cancellations (9,096) (7,521)

 Subsidy Allowance Amortization 30,290 25,918 

 Other Activities (622) (604)

Total Activity 22,265 19,489 

Subsidy Expense for Direct Loans Disbursed in the Current Year by Component

 Interest Rate Differential 11,440 1,614 

 Defaults, Net of Recoveries 1,862 1,106 

 Fees (1,720) (1,747)

 Other Components (14,563) (4,103)

Total of the Above Subsidy Expense Components (2,981) (3,130)

Components of Loan Modifications

Loan Modification Costs - 144 

Modification Adjustment Transfers Gain - (8)

Loan Modifications - 136 

Ending Balance of the Subsidy Cost Allowance Before Re-estimates $ 59,947 $ 33,300 

Components of Subsidy Re-estimates

 Interest Rate Re-estimates (981) (4,573)

 Technical and Default Re-estimates 65,472 11,936 

Net Upward Subsidy Re-estimates 64,491 7,363 

Ending Balance, Allowance for Subsidy $ 124,438 $ 40,663 

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 IDR 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.

Loan cancellations consist of write-offs of loans because the borrower died, became disabled, or declared bankruptcy. The 

interest rate re-estimate 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.

The two major components of the subsidy expense for direct loans disbursed in the current period (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. In FY 2019, the Department began including the prepayment effect on principal and 

interest repayments in the interest rate differential component rather the other component as in previous years.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

50 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Direct Loan Program Subsidy Expense 

(Dollars in Millions)

2019 2018

Subsidy Expense for Direct Loans Disbursed in the Current Year

 Interest Rate Differential $ 11,440 $ 1,614 

 Defaults, Net of Recoveries 1,862 1,106 

 Fees (1,720) (1,747)

 Other (14,563) (4,103)

Total Subsidy Expense for Direct Loans Disbursed in the Current Year (2,981) (3,130)

Loan Modifications - 136 

Net Upward Subsidy Re-estimates 64,491 7,363 

Direct Loan Subsidy Expense $ 61,510 $ 4,369 

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

(Dollars in Millions)

2019 2018

Interest Expense on Treasury Borrowing $ 33,817 $ 32,329 

Total Interest Expense $ 33,817 $ 32,329 

Interest Revenue from the Public $ 59,815 $ 54,157 

Interest Revenue on Uninvested Funds 4,082 3,890 

Administrative Fees 210 200 

Amortization of Subsidy (30,290) (25,918)

Total Revenues $ 33,817 $ 32,329 

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

increased subsidy expense in FY 2019 by $64.5 billion. Re-estimated costs only include cohorts that are 90 percent 

disbursed; cohort years 1994–2018. The re-estimate reflects the assumption updates and other changes described below.

 IDR Model Changes. During FY 2019, the Department enhanced the IDR model by examining the most current 

available IDR application data from NSLDS to supplement information previously used from the Department of 

Treasury’s Office of Tax Analysis, in order to calibrate projected incomes. The Department’s analysis determined a 

downward calibration was warranted, with the Departmental and FSA senior management concurrence. The impact of 

this calibration was the most significant factor in the IDR component of the re-estimate. The IDR update also reflects 

further refinement in the logic for switching borrowers among IDR plans and the appropriate balance to be paid off 

when they do switch. These updates led to a net upward re-estimate of $43.6 billion. 

 Deferment and Forbearance. The Department made enhancements in the methodology for delinquency, to more precisely 

reflect interest accrual and the extension of the payment period than the method previously employed. These enhancements 

resulted in a lower rate of forbearance which led to an upward re-estimate of subsidy as less interest is accrued, capitalized, 

and collected. Deferment rates increased for PLUS loans eligible for in-school deferments. The combined effect of these 

changes, in addition to updated data from NSLDS, was a net upward re-estimate of $18.3 billion.

 Maturity, Prepayment, and Loan Payoff. The Department further enhanced the forecasting of amount of debt 

distributions and aligned all three sub-components of this assumption to enter repayment cohorts. The loan payoff 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 51

Direct Loan Subsidy Rates—Cohort 2019

 Interest Differential Defaults Fees Other Total

Stafford 20.50% 1.63% -1.06% -12.42% 8.65%

Unsubsidized Stafford 13.85% 1.05% -1.06% -17.06% -3.22%

PLUS 2.73% 0.75% -4.25% -18.27% -19.04%

Consolidation 6.88% 1.40% 0.00% 3.76% 12.04%

Weighted Average Total -11.62% 1.25% -1.16% 11.78% 0.25%

The subsidy rate represents the subsidy expense of the program in relation to the obligations or commitments made during the 

fiscal year and are weighted on gross volume. The subsidy rates shown above, which reflect aggregate positive subsidy in the FY 

2019 cohort, cannot be applied to direct loans disbursed during the current reporting year to yield the subsidy expense, nor 

are these rates applicable to the portfolio as a whole. The Department does not re-estimate student loan cohorts until they are 

at least 90 percent disbursed. As a result, the financial statement re-estimate does not include a re-estimate of the current year 

cohort. The first re-estimate of this cohort will take place upon execution of the FY 2021 President’s Budget.

component was improved as well by using a more precise method to estimate payoff for loans enrolled in graduated 

repayment plans. As mentioned above, the impact on repayment of delinquency was moved to the payoff maturity 

assumption to better reflect interest accrual and the extension of the payment period. These adjustments resulted in longer 

assumed terms, resulting in a longer stream of payments, more interest accrual and less subsidy. The combined effect of 

these changes led to a net downward re-estimate of $26.1 billion.

 Financing Account Interest Adjustment. Beginning in FY 2019, the Department implemented a process to calculate 

and execute a financing account interest adjustment to address differences between net financing account interest 

executed for cohorts each year and amounts earned based on final Treasury interest rates for those cohorts. This resulted 

in a net upward re-estimate of $6.3 billion

 Default. The Department updated the data and made a change in methodology to a weighted fractional logit in order 

to more appropriately reflect the different sizes of the grouped data. The combined effect of these changes led to a net 

downward re-estimate of $1.0 billion. 

 Collections. As a result of analyzing updated DMCS data, collection rate estimates were revised which resulted in a net 

upward re-estimate of $4.2 billion.

 2018 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 re-estimate 

includes a net upward adjustment of $5.8 billion for these prior year changes attributable to the FY 2018 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 $9.7 billion.

 Interactive Effects. The re-estimate includes a net upward re-estimate of $3.2 billion attributed to the interactive effects 

of the assumption changes described above.

*

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

52 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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 reestimates 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 $39.8 billion during FY 2019 and $41.6 billion during FY 2018. Under the FCRA, the 

subsidy costs of new consolidation loans are not reflected until the future fiscal year in which they are disbursed. 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. 

FEDERAL FAMILY EDUCATION LOAN PROGRAM.

FFEL was established in FY 1965, and is a guaranteed loan program. As a result of the SAFRA 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. 

FFEL Guaranteed Loans Outstanding

(Dollars in Billions)

2019

Outstanding Principal of Guaranteed Loans, Face Value $ 141.6 

Amount of Outstanding Principal Guaranteed $ 141.6 

As of September 30, 2019, the total principal value of guaranteed loans outstanding and the amount of that principal which 

is guaranteed is approximately $141.6 billion. 

Additionally, the FFEL program guarantees outstanding interest balances. As of September 30, 2019, the interest balances 

outstanding for guaranteed loans held by lenders was approximately $4.0 billion. 

Direct Loan Program Loan Disbursements by Loan Type

(Dollars in Millions)

2019 2018

Stafford $ 19,984 $ 20,343 

Unsubsidized Stafford 48,142 49,009 

PLUS 22,709 23,117 

Consolidation 39,830 41,625 

Total Disbursements $ 130,664 $ 134,094 

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.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 53

The Department’s total FFEL program guarantees (principal and interest) are approximately $145.6 billion as of September 

30, 2019. 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 Program Loan Receivables 

(Dollars in Millions)

Principal Accrued Interest

Allowance for 

Subsidy

(Present Value)

Net

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 

2018

DEFAULTED FFEL GUARANTEED LOANS

FFEL GSL Program (Pre-1992) $ 3,917 $ 5,836 $ (8,077) $ 1,676 

FFEL GSL Program (Post-1991) 33,849 7,802 (15,186) 26,465 

Total Defaulted FFEL Guaranteed Loans 37,766 13,638 (23,263) 28,141 

ACQUIRED FFEL LOANS

Loan Purchase Commitment 19,277 2,435 (21) 21,691 

Loan Participation Purchase 36,475 4,713 458 41,646 

ABCP Conduit 1,565 330 (426) 1,469 

Total Acquired FFEL Loans 57,317 7,478 11 64,806 

FFEL Program Loan Receivables $ 95,083 $ 21,116 $ (23,252) $ 92,947 

FFEL Program Reconciliation of Liabilities for Loan Guarantees 

(Dollars in Millions)

2019 2018

Beginning Balance, FFEL Financing Account Liability for Loan Guarantees $ 2,591 $ 3,636 

Activity 

 Interest Supplement Payments (1,332) (1,052)

 Claim Payments (5,583) (5,716)

 Fee Collections 1,385 1,550 

 Interest on Subsidy Amortization (1,096) (1,099)

 Other 2,374 6,476 

Total Activity (4,252) 159 

Upward/(Downward) Subsidy Re-estimates 6,866 (1,204)

Ending Balance, FFEL Financing Account Liability for Loan Guarantees 5,205 2,591 

FFEL Liquidating Account Liability for Loan Guarantees 1 1 

FFEL Liabilities for Loan Guarantees $ 5,206 $ 2,592 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

54 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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

2019 

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

Activity

 Subsidy Allowance Amortization 571 1,027 52 1,650 

 Loan Cancellations (165) (308) (18) (491)

 Direct Asset Activities (40) (62) (5) (107)

Total Activity 366 657 29 1,052 

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

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

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

2018 

Beginning Balance, Allowance for Subsidy $ (1,656) $ (2,072) $ 400 $ (3,328)

Activity

 Subsidy Allowance Amortization 550 903 48 1,501 

 Loan Cancellations (168) (314) (16) (498)

 Direct Asset Activities (44) (68) (6) (118)

Total Activity 338 521 26 885 

Ending Balance of the Subsidy Cost Allowance Before Re-estimates $ (1,318) $ (1,551) $ 426 $ (2,443)

Net Upward Subsidy Re-estimates 1,339 1,093 - 2,432 

Ending Balance, Allowance for Subsidy $ 21 $ (458) $ 426 $ (11)

FFEL Program Subsidy Expense 

(Dollars in Millions)

2019 2018

Upward/(Downward) Subsidy Re-estimates

FFEL Loan Guarantee Program $ 6,866 $ (1,204)

Loan Purchase Commitment 2,144 1,339

Loan Participation Purchase 3,644 1,093

FFEL Program Subsidy Expense $ 12,654 $ 1,228

The FFEL subsidy re-estimate increased subsidy expense in FY 2019 by $12.7 billion. The net upward re-estimates in these 

programs were due primarily to interest rates provided by OMB and updated collection and prepayment rates.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 55

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

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 

2018 

Federal Perkins Loans $ 474 $ 297 $ (220) $ 551 

TEACH Program Loans 746 91 (253) 584 

HEAL Program Loans 397 32 (69) 360 

Facilities Loan Programs 1,491 17 (154) 1,354 

Total $ 3,108 $ 437 $ (696) $ 2,849 

Federal Perkins Loan Program. The Federal Perkins Loan program provides low-interest loans to eligible postsecondary 

school students. In some statutorily defined cases, funds are provided to reimburse schools for loan cancellations. For 

defaulted loans assigned to the Department, collections of principal, interest, and fees, net of amounts paid by the 

Department to cover contract collection costs, are transferred to Treasury annually. 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.

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 program is operated as a loan program 

under the FCRA for budget and accounting purposes since grants can be converted to direct loans.

TEACH Subsidy Rates—Cohort 2019

Interest Differential Defaults Fees Other Total

Subsidy Rates 71.18% 0.25% 0.00% -43.06% 28.37%

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.

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

56 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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 $360 

million obligated to support near term lending as of September 30, 2019.

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 institutions of higher education for the construction, reconstruction, and renovation of housing, academic, and 

other educational facilities.

NOTE 6. Liabilities Not Covered by Budgetary Resources 

(Dollars in Millions)

2019 2018

Intragovernmental With the Public Intragovernmental With the Public

Liabilities Not Covered by Budgetary Resources

 Other Liabilities

 Accrued Unfunded Annual Leave $ - $ 35 $ - $ 37 

 FECA Liabilities 3 11 3 15 

Total Liabilities Not Covered by Budgetary Resources 3 46 3 52 

Liabilities Not Requiring Budgetary Resources

 Subsidy Due to Treasury General Fund 1,239 - 2,037 - 

 Federal Perkins Loan Program 593 - 538 - 

 Miscellaneous Receipt, Deposit Funds and Clearing Accounts 123 303 34 317 

Total Liabilities Not Requiring Budgetary Resources 1,955 303 2,609 317 

Total Liabilities Covered by Budgetary Resources 1,300,035 11,864 1,267,654 8,541 

Total Liabilities $ 1,301,993 $ 12,213 $ 1,270,266 $ 8,910 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 57

NOTE 7. Debt

(Dollars in Millions)

Beginning Balance Borrowing Repayments Ending Balance

2019

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 2,094 197 (95) 2,196 

Total $ 1,259,965 $ 137,780 $ (108,740) $ 1,289,005 

2018

Direct Loan Program $ 1,061,559 $ 155,257 $ (66,206) $ 1,150,610 

FFEL Program 116,290 227 (9,256) 107,261 

Other Credit Programs for Higher Education 2,222 336 (464) 2,094 

Total $ 1,180,071 $ 155,820 $ (75,926) $ 1,259,965 

The Department borrows from Treasury to fund the disbursement of new loans and the payment of credit program outlays 

and related costs. During FY 2019, debt increased 2.3 percent from $1,260.0 billion in the prior year to $1,289.0 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 92.5 percent of the Department’s debt, as of September 30, 2019, 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.

The Department also borrows from Treasury for activity in the other credit programs for higher education. During FY 

2019, TEACH net borrowing of $63.3 million was used for the advance of new grants and repayments of principal made to 

Treasury. In FY 2019, debt in HBCU increased by $40.2 million, or 2.8 percent. This total represents the aggregate of new 

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

58 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

NOTE 9. Other Liabilities

(Dollars in Millions)

2019 2018

Intragovernmental With the Public Intragovernmental With the Public

Accounts Payable $ - $ 3,765 $ 1 $ 3,792 

Accrued Grant Liability - 2,637 - 1,914 

Guaranty Agencies’ Funds Due to Treasury 1,956 - 2,176 - 

Loan Guarantee Liability - 5,436 - 2,814 

Federal Perkins Loan Program 593 - 538 - 

Miscellaneous Receipt, Deposit Funds and Clearing Accounts 123 303 34 317 

Advances from Others and Deferred Credits 3 8 7 4 

Accrued Unfunded Annual Leave - 35 - 37 

FECA Liabilities 3 11 3 15 

Accrued Payroll and Benefits - 17 - 16 

Employer Contributions and Payroll Taxes 7 1 5 1 

Custodial Liabilities 1 - 1 - 

Total Other Liabilities $ 2,686 $ 12,213 $ 2,765 $ 8,910 

NOTE 8. Subsidy Due to Treasury General Fund 

(Dollars in Millions)

2019 2018

Credit Program Downward Subsidy Re-estimates

 Direct Loan Program $ 2,718 $ 2,484 

 FFEL Program 6,345 3,015 

Total Credit Program Downward Subsidy Re-estimates 9,063 5,499 

Future Liquidating Account Collections

 FFEL Program 1,239 1,856 

 Other Credit Programs for Higher Education - 181 

Total Future Liquidating Account Collections 1,239 2,037 

Total Subsidy Due to Treasury General Fund $ 10,302 $ 7,536 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 59

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.

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: Strengthen 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

60 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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

 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

 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

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

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

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

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 61

Gross Costs and Earned Revenue by Program 

(Dollars in Millions)

2018

FSA OESE OSERS Other Total

IMPROVE LEARNING OUTCOMES FOR ALL P–12 STUDENTS

Gross Cost

 Grants $ - $ 20,856 $ 13,073 $ 2,526 $ 36,455 

 Other - 58 1 763 822 

Earned Revenue - - - (82) (82)

Net Program Costs - 20,914 13,074 3,207 37,195 

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

PRODUCTIVE CITIZENRY

Direct Loan Program

 Gross Cost

 Credit Program Interest Expense 32,329 - - - 32,329 

 Subsidy Expense 4,369 - - - 4,369 

 Administrative Expenses 1,267 - - - 1,267 

 Earned Revenue

 Interest & Administrative Fees (58,247) - - - (58,247)

 Subsidy Amortization 25,918 - - - 25,918 

Net Cost of Direct Loan Program 5,636 - - - 5,636 

FFEL Program

 Gross Cost

 Credit Program Interest Expense 4,233 - - - 4,233 

 Subsidy Expense 1,228 - - - 1,228 

 Subsidy Amortization (Guaranteed Loans) (1,099) - - - (1,099)

 Guaranty Agencies 96 - - - 96 

 Administrative Expenses 141 - - - 141 

 Earned Revenue

 Interest & Administrative Fees (4,635) - - - (4,635)

 Subsidy Amortization (Acquired FFEL Loans) 1,501 - - - 1,501 

 Guaranty Agencies (202) - - - (202)

Net Cost of FFEL Program 1,263 - - - 1,263 

Other Credit Programs for Higher Education

 Gross Cost

 Credit Program Interest Expense 19 - - 54 73 

 Subsidy Expense 56 - - 168 224 

 Administrative Expenses 1 - - - 1 

 Earned Revenue

 Interest & Administrative Fees (48) - - (60) (108)

 Subsidy Amortization 29 - - 6 35 

 Other (540) - - (8) (548)

Net Cost of Other Credit Programs for Higher Education (483) - - 160 (323)

Non-Credit Programs

 Gross Cost

 Grants 28,456 1 3,476 3,438 35,371 

 Other 136 - 2 255 393 

Earned Revenue - - - (10) (10)

Net Cost of Non-Credit Programs 28,592 1 3,478 3,683 35,754 

Net Program Costs 35,008 1 3,478 3,843 42,330 

Total Gross Costs 71,232 20,915 16,552 7,204 115,903 

Total Earned Revenues (36,224) - - (154) (36,378)

Net Cost of Operations $ 35,008 $ 20,915 $ 16,552 $ 7,050 $ 79,525 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

62 FY 2019 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

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 

2018

Direct Loan Program $ 32,329 $ - $ 32,329 $ 3,890 $ 54,357 $ (25,918) $ 32,329 

FFEL Program 4,233 (1,099) 3,134 1,032 3,603 (1,501) 3,134 

Other Credit Programs for 

Higher Education 73 - 73 23 85 (35) 73 

Total $ 36,635 $ (1,099) $ 35,536 $ 4,945 $ 58,045 $ (27,454) $ 35,536 

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 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 63

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.

2019 2018

IMPROVE LEARNING OUTCOMES FOR ALL P–12 STUDENTS

Education for the Disadvantaged $ 16,318 $ 15,243 

Special Education—Individuals With Disabilities Education Act (IDEA) Grants 12,630 13,073 

School Improvement Programs 4,477 3,614 

Impact Aid 1,420 1,466 

Innovation and Improvement 945 1,201 

English Language Acquisition 749 693 

Career, Technical, and Adult Education 480 445 

Hurricane Education Recovery 345 232 

Institute of Education Sciences 195 187 

Other 313 301 

 Subtotal 37,872 36,455 

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

PRODUCTIVE CITIZENRY

 Student Financial Assistance

 Pell Grants 30,530 26,672 

 Federal Work-Study Program 1,030 1,015 

 Federal Supplemental Educational Opportunity Grants 648 769 

 Rehabilitation Services 3,210 3,130 

 Higher Education 2,528 2,027 

 Career, Technical, and Adult Education 1,282 1,135 

 Special Education—Individuals With Disabilities Education Act (IDEA) Grants 124 120 

 Hurricane Education Recovery 24 1 

 Institute of Education Sciences 45 43 

 Other 462 459 

 Subtotal 39,883 35,371 

Total Grant Costs $ 77,755 $ 71,826 

Grant Expenses by Appropriation

(Dollars in Millions)

The Department has more than 100 grant programs. Descriptions of the 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 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

64 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

development for educators, and curriculum development at 

the K-12, graduate, and postsecondary levels.

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 local educational agencies 

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 local educational agencies 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 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 NCES; 

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 Title I grants that provide financial assistance through 

state educational agencies to local educational agencies 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 institutions of higher education 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 state 

educational agencies to make competitive subgrants to local 

educational agencies 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 institutions of higher education, 

with an emphasis on institutions that enroll large proportions 

of minority and financially disadvantaged students. Also 

includes Student Service grant programs supporting lowincome, first-generation 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 child 

care, 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 
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 65

NOTE 11. Statements of Budgetary Resources

The SBR compares budgetary resources with the status of those resources. As of September 30, 2019, budgetary resources were 

$358.2 billion and net agency outlays were $144.5 billion. As of September 30, 2018, budgetary resources were $358.5 billion 

and net agency outlays were $146.8 billion.

Unused Borrowing Authority 

(Dollars in Millions)

2019 2018

Beginning Balance, Unused Borrowing Authority $ 62,752 $ 58,701 

Current Year Borrowing Authority 148,493 167,897 

Funds Drawn from Treasury (137,880) (155,820)

Borrowing Authority Withdrawn (17,520) (8,026)

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

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)

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.

2019 2018

Intragovernmental With the Public Intragovernmental With the Public

Unpaid $ 215 $ 121,561 $ 159 $ 132,716 

Paid 64 563 238 120 

Undelivered Orders $ 279 $ 122,124 $ 397 $ 132,836 

Net Adjustments to Unobligated Balances Brought Forward

(Dollars in Millions)

2019

Budgetary

Non-Budgetary Credit 

Reform Financing 

Accounts

Prior Year Unobligated Balance, End of Year (Total) $ 17,850 $ 23,728 

Recoveries of Prior Year Unpaid Obligations 1,158 24,841 

Borrowing Authority Withdrawn - (17,520)

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

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

Canceled Authority (405) - 

Downward Adjustments of Prior Year Paid Delivered Orders 6 342 

Other Differences (50) (103)

Unobligated Balance from Prior Year Budget Authority (Net) $ 18,231 $ 15,027 
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

66 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

Distributed Offsetting Receipts

(Dollars in Millions)

2019 2018

Negative Subsidies and Downward Re-estimates of Subsidies:

 Direct Loan Program $ 9,906 $ 26,539 

 FFEL Program 2,099 236 

 Facilities Loan Programs 5 9 

 TEACH Program 1 - 

 HEAL Program 34 8 

 Total Negative Subsidies and Downward Re-estimates 12,045 26,792 

Other 228 578 

Distributed Offsetting Receipts $ 12,273 $ 27,370 

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 $ 358,504 $ 316,926 $ 27,370 $ 146,810 

 Expired Funds (2,016) (835) - - 

 FFEL Guaranty Agency Amounts Included in the 

President’s Budget 7,257 7,257 - - 

 Distributed Offsetting Receipts - - - 27,370 

 Other (155) (3) - - 

Budget of the United States Government1 $ 363,590 $ 323,345 $ 27,370 $ 174,180 

1

 Amounts obtained from the Appendix, Budget of the United States Government, FY 2020.

The FY 2021 Budget of the United States Government (President’s Budget), which presents the actual amounts for the 

year ended September 30, 2019, has not been published as of the issue date of these financial statements. The FY 2021 

President’s Budget is scheduled for release in February 2020 and will be made available on OMB’s website. The table above 

reconciles the FY 2018 SBR to the FY 2020 President’s Budget (FY 2018 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.
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 67

NOTE 12. Reconciliation of Net Cost to Net Outlays

(Dollars in Millions)

2019

IntragovernmentalWith the

Public Total

Net Cost of Operations $ 33,374 $ 121,355 $ 154,729 

Components of Net Operating Cost Not Part of the Budgetary Outlays

Subsidy Expense - (74,208) (74,208)

Increase/(Decrease) in Assets (87) 10 (77)

(Increase)/Decrease in Liabilities (81) (611) (692)

Federal Employee Retirement Benefit Costs Paid by OPM and Imputed to Agency (37) - (37)

Total Components of Net Operating Cost Not Part of the Budgetary Outlays (205) (74,809) (75,014)

Components of the Budgetary Outlays Not Part of Net Operating Costs

Loan Disbursement/(Collection) Activities, Net - 52,734 52,734 

Loan Subsidy Transfers 12,045 - 12,045 

Receipts To Be Returned to Treasury - (4) (4)

Increase/(Decrease) in Deposit Funds - (25) (25)

Total Components of the Net Budgetary Outlays Not Part of Net Operating Costs 12,045 52,705 64,750 

Net Outlays (Calculated Total) $ 45,214 $ 99,251 $ 144,465 

Related Amounts on the Statement of Budgetary Resources

Outlays, Net (Discretionary and Mandatory) $ 156,738 

Distributed Offsetting Receipts (12,273)

Agency Outlays, Net (Discretionary and Mandatory) $ 144,465 

The Department implemented SFFAS 53, Budget and Accrual Reconciliation, in FY 2019 requiring this reconciliation to explain 

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. Comparison with the prior year is not required in the initial year of implementation.

Subsidy expense included in net cost of operations primarily represents subsidy re-estimates that are recognized without 

a concurrent cash disbursement. For credit programs, most loan disbursement and collection activities, other than those 

related to loan administrative costs, increase or decrease loan asset and liability balances and therefore do not affect net 

cost of operations. Loan subsidy transfers are amounts paid from the Department’s financing accounts to Treasury receipt 

accounts when there are negative subsidies for new loan disbursements or downward re-estimates of the subsidy cost of 

existing loans
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

68 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

approximately 256 thousand loans were made totaling 

$630.5 million at 1,079 institutions, making an average of 

$2,461 per loan. The Department’s equity interest, as of 

the end of Academic Year 2016-2017 (June 30, 2017), was 

approximately $5.8 billion.

Federal Perkins Loan program borrowers who meet 

statutory eligibility requirements—such as those who 

provide service as teachers in low-income areas or as Peace 

Corps or AmeriCorps VISTA volunteers, as well as those 

who serve in the military, law enforcement, nursing, or 

family services—may receive partial loan forgiveness for 

each year of qualifying service.

The Federal Perkins Loan program was scheduled to 

officially end on September 30, 2015. However, the 

program was extended through September 30, 2017 by 

the Federal Perkins Loan Program Extension Act of 2015

(Extension Act). The Extension Act eliminated the Perkins 

Loan grandfathering provisions that the Department had 

put in place, and establishes new eligibility requirements 

for undergraduate and graduate students to receive Perkins 

Loans. As of September 30, 2017, schools are no longer 

authorized to make new Perkins Loans.

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. 

The cost of loan forgiveness related to borrower defense 

claims reflected in the accompanying financial statements is 

limited to loans originated through September 30, 2019. The 

final disposition of claims filed and those yet to be filed from 

loans originated before September 30, 2019, is not expected 

to have a material impact on these financial statements. 

OTHER MATTERS 

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 15 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.

GUARANTY AGENCIES

The Department may assist guaranty agencies experiencing 

financial difficulties. The Department has not done so 

in fiscal years 2019 or 2018 and does not expect to in 

future years. No provision has been made in the financial 

statements for potential liabilities.

FEDERAL PERKINS LOAN PROGRAM

The Federal Perkins Loan program provided financial 

assistance to eligible postsecondary school students. In 

FY 2019, the Department reported for Academic Year 

2017-2018 that it provided funding of 83.0 percent 

of the capital used to make loans to eligible students 

through participating schools at 5 percent interest. The 

schools provided the remaining 17.0 percent of program 

funding. For the academic year that ended June 30, 2018, 

NOTE 13. 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.

Future Minimum Lease Payments

(Dollars in Millions)

2019 2018

2020 $ 73 2019 $ 73

2021 78 2020 73

2022 81 2021 77

2023 83 2022 81

2024 86 2023 82

After 2024 87 After 2023 83

Total $ 488 Total $ 469
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 69

NOTE 14. 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 (GTAS) 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 2018 FR can be found on Treasury’s website and a copy of the 2019 FR will be posted to this site as soon as it 

is released.
FINANCIAL SECTION | NOTES TO THE FINANCIAL STATEMENTS

70 FY 2019 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, 2019

(Dollars in Millions)

 FY 2019 Department Balance Sheet Line Items Used to Prepare FY 2019 Government-wide

 Balance Sheet

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

ASSETS ASSETS

Intragovernmental: Federal:

 Fund Balance with Treasury $ 104,918 $ 104,918 Fund Balance with Treasury

 Other Intragovernmental Assets 66 64 Advances to Others and Prepayments

 2 Accounts Receivable

Total Intragovernmental 104,984 104,984 Total Federal Assets

Public: Non-Federal:

 Credit Program Receivables, Net

 Direct Loan Program 1,123,707 1,123,707 Loans Receivable, Net

 FFEL Program 76,767 76,767 Loans Receivable, Net

 Other Credit Programs for Higher Education 2,982 2,982 Loans Receivable, Net

 Other Assets 2,256 41 Other Assets

 1,956 Cash and Other Monetary Assets

 8 Property, Plant, and Equipment, Net

 251 Accounts and Taxes Receivable, Net

Total Public 1,205,712 1,205,712 Total Non-Federal Assets

Total Assets $ 1,310,696 $ 1,310,696 Total Assets

LIABILITIES LIABILITIES

Intragovernmental: Federal:

 Debt

 Direct Loan Program $ 1,192,138 $ 1,192,138 Loans Payable

 FFEL Program 94,671 94,671 Loans Payable

 Other Credit Programs for Higher Education 2,196 2,183 Loans Payable

 13 Interest Payable - Loans and Not Otherwise Classified

Subsidy Due to Treasury General Fund 10,302 10,302 Liability to the General Fund of the U.S. Government

Other Intragovernmental Liabilities 2,686 2,639 Liability to the General Fund of the U.S. Government

 3 Advances from Others and Deferred Credits

 7 Benefit Program Contributions Payable

 37 Other Liabilities (Without Reciprocals)

Total Intragovernmental 1,301,993 1,301,993 Total Federal Liabilities

Public: Non-federal:

 Other Liabilities 12,213 3,000 Other Liabilities

 5,436 Loan Guarantee Liabilities

 3,765 Accounts Payable

 12 Federal Employee and Veteran Benefits Payable

Total Public 12,213 12,213 Total Non-Federal Liabilities

Total Liabilities $ 1,314,206 $ 1,314,206 Total Liabilities

NET POSITION NET POSITION

 Unexpended Appropriations $ 72,757 $ 72,756 Net Position - Funds Other Than Dedicated Collections

 1 Net Position - Funds from Dedicated Collections

 Cumulative Results of Operations (76,267) (76,269) Net Position - Funds Other Than Dedicated Collections

 2 Net Position - Funds from Dedicated Collections

Total Net Position $ (3,510) $ (3,510) Total Net Position

Total Liabilities & Net Position $ 1,310,696 $ 1,310,696 Total Liabilities & Net Position
NOTES TO THE FINANCIAL STATEMENTS | FINANCIAL SECTION

FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 71

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

of Net Cost for the Year Ending September 30, 2019

(Dollars in Millions)

FY 2019 Department Statement of Net Cost Line Items Used to Prepare FY 2019 Government-wide 

Statement of Net Cost

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

Total Program Gross Cost $ 191,639 $ 153,260 Non-Federal Gross Cost

 108 Benefit Program Costs

 37 Imputed Costs

 508 Buy/Sell Cost

 37,714 Borrowing and Other Interest Expense

 12 Other Expenses (Without Reciprocals)

 Total Program Gross Cost $ 191,639 $ 191,639 Department Total Gross Cost

Total Earned Revenue $ (36,910) $ (31,905) Non-Federal Earned Revenue

 (7) Buy/Sell Revenue (Exchange)

 (4,998) Borrowing and Other Interest Revenue (Exchange)

 Total Earned Revenue (36,910) (36,910) Department Total Earned Revenue

 Net Cost of Operations $ 154,729 $ 154,729 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, 2019 

(Dollars in Millions)

FY 2019 Department Statement of Changes in Net Position Line Items Used to Prepare FY 2019 Government-wide 

Statement of Operations and Changes in Net Position

Financial Statement Line Amounts Amounts Reclassified Financial Statement Line

Unexpended Appropriations 

 Beginning Balance $ 72,166 $ 72,116 Net Position, Beginning of Period (Net of GTAS Adjustment)

 Appropriations Received 122,058 118,101 

Appropriations Received as Adjusted (Rescissions and 

Other Adjustments)

 Other Adjustments (Rescissions, etc.) (4,007)

 Appropriations Used (117,460) (117,460) Appropriations Used

 Unexpended Appropriations, Ending Balance $ 72,757 $ 72,757 

Cumulative Results of Operations

 Beginning Balance $ (23,360) $ (23,360) Net Position, Beginning of Period

 Appropriations Used 117,460 117,460 Appropriations Expended

 Nonexchange Revenue 15 15 

Collections Transferred Into a TAS Other Than the 

General Fund of the U.S. Government - Nonexchange

 Imputed Financing from Costs Absorbed by Others 37 37 Imputed Financing Sources

 Negative Subsidy Transfers, Downward Subsidy 

 Re-estimates, and Other (15,690) (12,506)

Non-Entity Collections Transferred to the General Fund 

of the U.S. Government

 (3,586)

Accrual for Non-Entity Amounts to be Collected and 

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

 6 Other Taxes and Receipts

 396 Other Budgetary Financing Sources

 Net Cost of Operations (154,729) (154,729) Net Cost of Operations

 Cumulative Results of Operations, 

 Ending Balance $ (76,267) $ (76,267)

 Net Position $ (3,510) $ (3,510) Net Position, End of Period