Guaranty Agency Financial Report 

(GAFR)

ED Form 2000

Instruction Guide

Revised: June 2011
Federal Student Aid

Guaranty Agency Financial 

Reporting Instruction Guide

Office of Federal Student Aid 

Union Center Plaza, 830 First Street, N.E.

Phone 202.377.3332 • Fax 202.275.3481

E-mail: mailto:FSA_GAR@ed.gov
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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 Page

CERTIFICATION ..................................................................................................................10

DEFINITIONS ........................................................................................................................11

GUARANTY AGENCY FINANCIAL REPORT MONTHLY ..................................................12

Reinsurance, Trigger Figure and Collections.......................................................................13

Financial Processing................................................................................................................16

For Fiscal Month Of Reporting .............................................................................................18

MR – 1 Claims Paid................................................................................................................18

MR 1 Claims Paid - Amount Due To/(From) Guarantor.....................................................20

MR-1-A Defaults - Principal Amount .................................................................................21

MR-1-A Defaults - Other Amounts.....................................................................................21

MR-1-B Exempt/Lender-of-last-resort- Principal Amount .................................................22

MR-1-C Death/Disability - Principal Amount.....................................................................23

MR-1-D Closed School/False Certification - Principal Amount.........................................23

MR-1-E Bankruptcy - Principal Amount.............................................................................24

MR-1-F Unpaid Refunds - Principal Amount ...................................................................25

MR-1-G Discharges.............................................................................................................25

MR-2 Borrower Payment Return (Closed School/False Certification)..................................27

MR-2 Borrower Payment Return – Amount Due To/(FROM) Guarantor ..........................27

MR-2 Borrower Payment Return - Principal Amount.........................................................27

MR-2 Borrower Payment Return - Accrued Interest...........................................................27

MR-2 Borrower Payment Return - Other Charges..............................................................27

MR-3 Status Changes.............................................................................................................28

MR-3 Status Changes - Amount Due To/ (From) Guarantor ..............................................28

MR-3-A Death/Disability - Principal and Interest...............................................................29

MR-3-B Closed School/False Certification - Principal and Interest ...................................29

MR-3-C Bankruptcy - Principal and Interest.......................................................................29

MR-4 TOP Overpayments......................................................................................................30

MR-4 TOP Overpayments - Amount Due To/(From) Guarantor........................................30

MR-4 TOP Overpayments – Principal.................................................................................30

MR-4 TOP Overpayments – Interest Amount.....................................................................31

MR-4 TOP Overpayments – Other Amounts ......................................................................31

MR-5 Repurchases - Current Fiscal Year (CFY)...................................................................31

MR-5 Repurchases - CFY - Amount Due To/(From) Guarantor ........................................33

MR-5 Repurchases - CFY - Principal Amount....................................................................33

MR-5 Repurchases - CFY - Accrued Interest Due ED........................................................34

MR-5 Repurchases - CFY – Other Amounts.......................................................................35

MR-5-A Repurchases - CFY - Defaults...............................................................................35

MR-5-B Repurchases - CFY - Exempt /Lender-Of-Last-Resort.......................................35

MR-5-C Repurchases - CFY – Death/Disability .................................................................36

Table of Contents
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MR-5-D Repurchases - CFY - Closed School/False Certification ........................................36

MR-5-E Repurchases - CFY - Bankruptcy (Chapter 7, 11, 12 and 13)...............................36

MR-6 Repurchases for Reinsurance Claims Paid in Prior Fiscal Year..................................38

MR-6 Repurchases - PFY - Amount Due To/(From) Guarantor.........................................38

MR-7 Partial Refunds - Current Fiscal Year (CFY)...............................................................38

MR-7 Partial Refunds - CFY - Amount Due To/(From) Guarantor....................................39

MR-7-A Partial Refunds - CFY - Defaults..........................................................................39

MR-7-B Partial Refunds - CFY – Exempt/Lender-of-Last-Resort......................................40

MR-7-C Partial Refunds – CFY – Death and Disability .....................................................40

MR-7-D Partial Refunds - CFY - Closed School or False Certification .............................40

MR-7-E Partial Refunds - CFY - Bankruptcy .....................................................................40

MR-8 Partial Refund - Previous Fiscal Year (PFY)...............................................................40

MR-8 Partial Refunds - PFY, Amount Due To/(From) Guarantor......................................41

MR- 9 Overstated Claims.......................................................................................................41

MR-9 Overstated Claims - Amount Due To/(From) Guarantor..........................................41

MR-9-A Overstated Claims - Defaults................................................................................41

MR-9-B Overstated Claims - Exempt/Lender of Last Resort .............................................41

MR-9-C Overstated Claims - Death/Disability....................................................................41

MR-9-D Overstated Claims - Closed School/False Certification........................................42

MR-9-E Overstated Claims - Bankruptcy............................................................................42

MR-10 Rehabilitated Loans....................................................................................................42

MR-10 Rehabilitated Loan Refund - Amount Due To/(From) Guarantor ..........................43

MR-10 Rehabilitated Loans - Principal Amount.................................................................43

MR-10-A Rehabilitated Loans- Principal Amount (GA Retention)...................................43

MR-10-A Rehabilitated Loans - Interest ...........................................................................44

MR-10-A Rehabilitated Loans - Other Charges..................................................................44

MR-11 FFEL Consolidation Refund ......................................................................................45

MR-11 FFEL Consolidation Refund - Amount Due To/(From) Guarantor ........................45

MR-11 FFEL Consolidation Refund - Principal Amount ...................................................45

MR-11 FFEL Consolidation Refund - Interest Amount......................................................45

MR-11 FFEL Consolidation Refund – Other Amount ........................................................45

MR-11-A FFEL Consolidation Payoff – Principal Amount................................................46

MR-11-A FFEL Consolidation Payoff – Interest Amount ..................................................46

MR-11-B FFEL Consolidation GA Retention – Principal Amount ....................................46

MR-11-B FFEL Consolidation GA Retention - Interest Amount .......................................46

MR-11-B FFEL Consolidation GA Retention - Other Amount ..........................................46

MR-12 GA Administrative Wage Garnishment.....................................................................47

MR-12 Administrative Wage Garnishment - Amount Due To/(From) Guarantor..............48

MR-12 Administrative Wage Garnishment – Principal Amount ........................................50

MR-12 Administrative Wage Garnishment – Interest Amount...........................................50

MR-12 Administrative Wage Garnishment – Other Amount..............................................50

MR-12-A Administrative Wage Garnishment –Total Collected - Principal .......................50
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MR-12-A Administrative Wage Garnishment –Total Collected - Interest .........................51

MR-12-A Administrative Wage Garnishment –Total Collected - Other.............................51

MR-12-B Administrative Wage Garnishment – GA Retention – Principal ........................51

MR-12-B Administrative Wage Garnishment – GA Retention - Interest ...........................51

MR-12-B Administrative Wage Garnishment – GA Retention - Other ..............................51

MR-13 Default Collections ....................................................................................................51

MR-13 Default Collections - Amount Due To/(From) Guarantor.......................................52

MR-13 Default Collections – Principal Amount .................................................................54

MR-13 Default Collections – Interest Amount....................................................................54

MR-13 Default Collections – Other Amount.......................................................................54

MR-13-A Default Collections –Total Collected - Principal................................................54

MR-13-A Default Collections –Total Collected - Interest ..................................................54

MR-13-A Default Collections –Total Collected - Other .....................................................54

MR-13-B Default Collections – GA Retention - Principal..................................................55

MR-13-B Default Collections – GA Retention - Interest ....................................................55

MR-13-B Default Collections – GA Retention - Other.......................................................55

MR-14 Bankruptcy Collections..............................................................................................55

MR-14 Bankruptcy Collections - Amount Due To/(From) Guarantor................................56

MR-14 Bankruptcy Collections – Principal Amount...........................................................56

MR-14 Bankruptcy Collections – Interest Amount.............................................................56

MR-14 Bankruptcy Collections – Other Amount................................................................56

MR-15 Default FFEL Consolidated by DL Fee – Amount Due To/(From) Guarantor .........57

MR-16 Total ...........................................................................................................................57

NON-PAYMENT ACTIVITY (Accounting Data)...............................................................58

Treasury Offset Program (TOP) ...........................................................................................58

Principal Amounts Column..................................................................................................59

Interest Amounts Column....................................................................................................59

Other Amounts Column.......................................................................................................59

MR-17 Treasury Offset........................................................................................................59

MR-18 Non-Federal Share Offset........................................................................................59

MR-19 Treasury Offset Reversals.......................................................................................60

Status Changes - Account Balance at Conversion................................................................60

Account Balance at Conversion – Principal Amounts Column...........................................61

Account Balance At Conversion - Interest Amounts Column.............................................61

Account Balance At Conversion - Other Amounts Column................................................61

MR-20 Default/LLR to Death and Disability ......................................................................61

MR-21 Default/LLR to Closed School/False Certification .................................................61

MR-22 Default/LLR to Bankruptcy.....................................................................................62

MR-23 Bankruptcy to Default/LLR.....................................................................................62

Agency Accruals (Accounting Entries) .................................................................................62

Principal Amounts Column..................................................................................................63

Interest Amounts Column....................................................................................................63
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Other Amounts Column.......................................................................................................63

MR-24 Collection Terminations..........................................................................................64

MR-25 Compromises...........................................................................................................64

MR-26 Agency’s Accruals ..................................................................................................64

GUARANTY AGENCY FINANCIAL REPORT MONTHLY/QUARTERLY .........................65

Agency Accruals (Information)..............................................................................................65

Principal Amounts Column..................................................................................................65

Interest Amounts Column....................................................................................................66

Other Amounts Column.......................................................................................................66

MR-27 Default FFELP Loans Consolidated By Direct Loan Program...............................66

MR-28 Subrogated Loans....................................................................................................66

MR-29 Default Loans Transferred Out................................................................................66

MR-30 Default Loans Transferred In ..................................................................................66

MR-31 Other Transactions Affecting Federal Receivable ..................................................66

MR-32 Ending Balance of Defaulted Loans........................................................................67

Delinquency by Debt...............................................................................................................69

MR-33 Not Delinquent ........................................................................................................69

MR-34 (1 – 90 Days)...........................................................................................................70

MR-40 Over 10 Years..........................................................................................................70

Bankruptcy Reporting ............................................................................................................70

MR-41 Ending Balance on Bankruptcies ............................................................................70

MR-42 Bankruptcies Transferred Out .................................................................................70

GUARANTY AGENCY FINANCIAL REPORT ANNUAL .....................................................71

Loans in Repayment ...............................................................................................................72

AR- 1 Loans Guaranteed (Except Federal Consolidation) ..................................................72

AR- 2 All Loans Canceled (Except Federal Consolidation)................................................72

AR- 3 Federal Consolidation Loans Guaranteed .................................................................73

AR- 4 Federal Consolidation All Loans Canc1eled .............................................................73

AR- 5 Uninsured Loans.......................................................................................................73

AR- 6 Loans Transferred In.................................................................................................73

AR- 7 Loans Transferred Out ..............................................................................................74

AR- 8 Default Claims Paid ..................................................................................................74

AR- 9 Bankruptcy Claims Paid............................................................................................75

AR-10 Death and Disability Claims Paid ............................................................................75

AR-11 Closed School/False Certification Claims Paid .......................................................76

AR-12 Loans Paid-In-Full ...................................................................................................76

AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans ....................................77
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AR-14 Total Loans in Deferment Prior to First Payment ...................................................77

Financial Report Introduction ...............................................................................................77

Federal Fund............................................................................................................................77

AR-15 Beginning Balance (from AR-26 as of 9/30/XX)....................................................78

AR-16 Investment Income...................................................................................................78

AR-17 Reinsurance from ED...............................................................................................78

AR-18 Collections of Defaulted Loans – Reinsurance Complement ..................................78

AR-19 Insurance Premiums.................................................................................................79

AR-20 Other Revenues........................................................................................................79

AR-21 Claims Expensed to Lenders....................................................................................79

AR-22 Recall of Federal Funds to the Restricted Account..................................................80

AR-23 Transfer to Operating Fund for Default Aversion ...................................................80

AR-24 Transfer to Operating Fund for Account Maintenance Fee .....................................80

AR-25 Other Expenses ........................................................................................................80

AR-26 Ending Balance ........................................................................................................81

AR-27 Amount transferred from Federal Fund to Operating Fund for Operating Expenses 

(Repayable)..........................................................................................................................81

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

..............................................................................................................................................81

Operating Fund .......................................................................................................................81

AR-29 Beginning Balance (from 9/30/XX).........................................................................81

AR-30 Default Aversion Fee Revenue ................................................................................81

AR-31 Loan Processing and Issuance Fee Revenue............................................................82

AR-32 Account Maintenance Fee Revenue Received from ED..........................................82

AR-33 Transfer from Federal Fund for Account Maintenance Fee ....................................82

AR-34 Collections of Defaulted Loans less Reinsurance Complement (GA Collection 

Retention).............................................................................................................................82

AR-35 Investment Income...................................................................................................82

AR-36 Other Revenue (FFEL and Non-FFEL) ...................................................................83

AR-37 Collections of Defaulted Loans (Secretary Equitable Share) ..................................83

AR-38 Operating Expenses..................................................................................................83

AR-39 Other Expenditures (FFEL and Non-FFEL)............................................................83

AR-40 Ending Balance ........................................................................................................84

AR-41 Amount Received from Federal Fund for Operating Expenses (Repayable) .........84

AR-42 Amount Repaid to Federal Fund for Operating Expenses.......................................84

Restricted Account..................................................................................................................84

AR-43 Beginning Balance (from 9/30/XX).........................................................................84

AR-44 Recall of Federal Funds from Federal Fund ............................................................84

AR-45 Investment Income on Restricted Account ..............................................................84

AR-46 Investment Income on Restricted Account Expensed for Default Prevention.........84

AR-47 Ending Balance ........................................................................................................85

Balance Sheet Section (Federal Fund)...................................................................................85
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AR-48 Cash, Cash Equivalents and Investments ................................................................85

AR-49 Restricted Account Cash, Cash Equivalents and Investments.................................85

AR-50 Net Investment in Property, Plant, Equipment and Inventory .................................85

AR-51 Accounts Receivable from the ED...........................................................................85

AR-52 Other Assets.............................................................................................................85

AR-53 Accounts Payable, Accrued Expenses and Other Current Liabilities......................86

AR-54 Accounts Payable to ED ..........................................................................................86

AR-55 Other Liabilities .......................................................................................................86

AR-56 Allowances and Other Non-Cash Charges to Federal Fund ....................................86

AR-57 Federal Fund Balance...............................................................................................86

ATTACHMENT A – Federal Fund Itemized Schedule.........................................................87

ATTACHMENT B – Operating Fund Itemized Schedule .....................................................88

ATTACHMENT C – Balance Sheet Section Itemized Schedule...........................................89

ATTACHMENT D – Guaranty Agency List .........................................................................90
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INTRODUCTION 

Guaranty agencies use the Guaranty Agency Financial Report to request payments from and make 

payments to the Department of Education (ED) under the Federal Family Education Loan (FFEL) 

Program, which is authorized by Title IV, Part B of the Higher Education Act of 1965, as amended 

(HEA). ED also uses this information to monitor the agency‘s financial activities, including activities 

concerning its federal fund and operating fund. Guaranty agencies perform certain activities in 

connection with the following types of loans under the FFEL Program.

 The Robert T. Stafford Student Loan Program (also known as Federal Stafford Loans or 

Subsidized Stafford Loans),

 Federal PLUS Loans,

 Federal Supplemental Loans for Students (Federal SLS) ceased originating new loans 

on July 1, 1994,

 Federal Consolidation Loans, and

 Unsubsidized Stafford Loans for Middle-Income Borrowers (Unsubsidized Stafford 

Loans).

Note: Loans guaranteed under Non-FFEL Programs but administered by the guaranty agency are 

not to be included in this report. An example of a non-FFEL program is a student loan program 

established by State law and operated entirely with State funds for individuals pursuing a particular course 

of study.

Guaranty agencies must maintain detailed records to support each entry on the Guaranty Agency 

Financial Report and be able to reconstruct the entries back to individual loan, borrower or lender levels, 

or to specific guaranty agency level transactions. This includes keeping accurate records of reinsurance 

payments and collections on defaulted loans at the loan and borrower level. All records must be 

available for verification by the Secretary of Education or other authorized representatives of the U.S. 

Government. 

Information on the Guaranty Agency Financial Report must be consistent with and comparable to 

relevant information reported to the National Student Loan Data System (NSLDS) by the guaranty 

agency.

Guaranty agencies are required to maintain all records in the manner and for the period of time set 

forth in the Department‘s regulations. Detail records and reports are to be included in the compliance 

audit requirements in accordance with 34 CFR 682.410(b) as required in the A-133 Audit Guide.

These instructions provide information on how to complete each item on the Guaranty Agency 

Financial Report. However, they do not restate in their entirety the laws, regulations, and policy bulletins 

which may apply to an item on the form. The following material should be consulted when completing 

this report:
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 The Higher Education Reconciliation Act of 2005

 The Higher Education Act of 1965, as amended, and in particular, Title IV, Part B (20 

U.S.C. 1071 et seq.)

 The code of Federal Regulations, Department of Education, 34 CFR Part 682, Federal 

Family Education Loan Program (formerly Guaranteed Student Loan and PLUS 

Programs), and 34 CFR Part 668, Student Assistance General Provisions, and

 Student Financial Assistance Programs bulletins. For a complete listing of FSA bulletins 

go to: http

Note that the FFEL Program has frequent changes in laws, regulations, and policies. A 

guaranty agency is responsible for complying with all current laws, regulations, and policies, 

and for ensuring that any information provided on the Guaranty Agency Monthly/Annual 

Financial Report conforms to them.

CERTIFICATION

Guaranty agency-related financial transactions are now being recorded electronically in the Federal 

Student Aid (FSA) Financial Management System (FMS). By completing the U.S. Department of 

Education Organization Participation Agreement (OPA) you are certifying that your Guaranty Agency 

Financial Report (ED Form 2000) is a legally binding document that will cover two years. By signing and 

returning this form, you will no longer need to mail paper  ̳signature pages‘ after you submit your Form

2000 electronically. A copy of the OPA can be found on the Financial Partners Portal at 

http://fp.ed.gov/fms.html.

Original signature documents should be mailed to: 

Federal Student Aid

Finance Office

Financial Management Division

830 First Street, N.E.

Washington, DC 20202-5455

If you have any questions, please contact us at: FSA_GAR@ed.gov 
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DEFINITIONS

Capitalized interest: The FFEL Program allows a lender to convert interest to principal under 

certain conditions. This report will refer to this conversion and interest as ―interest capitalized by the 

lender.‖ Once the lender capitalizes interest, it is not separately referenced. Instead, the capitalized 

interest and the original loan amount together are referred to as principal.

Guaranty agency claim interest. Interest calculated by the guaranty agency on the loan principal 

while a lender‘s insurance claim is being processed by the guaranty agency and which is eligible for 

reinsurance from ED. It is paid to the lender by the guaranty agency as part of an insurance claim.

Non-reinsured guaranty agency (GA) interest: Interest that is not reinsured by ED. This 

category includes interest that is calculated on the loan principal while a lender‘s insurance claim is being 

processed by the guaranty agency. This interest must be paid to the lender by the guaranty agency but is 

not eligible for reinsurance from ED. However, the Secretary of Education is entitled to an equitable 

share of any of this interest collected from a borrower.

Purchased interest: Interest a guaranty agency pays to a lender at the time an insurance claim is 

paid. It consists of lender interest, guaranty agency claim interest and non-reinsured GA interest, as 

defined above. The guaranty agency must capitalize all purchased interest and treat it as part of the 

principal balance.

Accrued interest. Interest calculated by the guaranty agency (not the lender) on the loan principal 

on a collection account for collection from the borrower after an insurance claim is paid to a lender. 

Principal: Once a claim has been paid to a lender the principal amount of the claim plus the 

purchased interest paid to the lender is referred to as principal.
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GUARANTY AGENCY 

FINANCIAL REPORT 

MONTHLY

Chapter

1

Guaranty agencies report to ED on a monthly basis to request payments for default, 

bankruptcy, death, disability, closed school, false certification, and lender of last-resort-loan 

(default) claims. This report is also used to report unpaid school refunds and teacher loan 

forgiveness discharges. An agency also uses the form to make payments for amounts due ED for 

collections on default and lender-of-last-resort loan (default) claims on which reinsurance was paid,

and for refunding amounts previously paid for reinsurance claims. Reference the Financial 

Management System Guaranty Agency Guide posted at: http://www.fp.ed.gov/fms.html, for 

completing the on-line forms.

Prior to July 1, 2006, guaranty agencies were required to file a claim for reimbursement within 

45 days after the guaranty agency discharged its insurance obligation on the loan, however, effective 

for July 1, 2006 the claim filing time has been reduced to 30 days. In order to provide a mechanism 

for guaranty agencies to comply with the 30-day provision, ED has developed a Supplemental 

Claims Invoicing process. The supplemental claims process will allow a guaranty agency to report 

reinsurance claims on a bi-monthly basis. Procedures for supplemental claims processing are 

posted at the link referenced above. The Supplemental Claims Invoice process has no impact on 

regular monthly GAFR reporting, i.e., all monthly activity, including the Supplemental Claims 

Invoice amounts should be included in the monthly GAFR submission.

The Monthly Report requires summary information only concerning guaranty agency‘s claims, 

collections, and related activity over a monthly period. A guaranty agency can submit only one 

monthly report for any month. Additional submissions for the same monthly period will be 

rejected and the agency will be requested to submit the material in its next monthly submission.

After ED accepts an agency‘s monthly submission, no further corrections or adjustments can 

be made. Errors have to be rectified by submitting the appropriate information in a later 

submission.

When the monthly report is accepted, the guaranty agency can access their statement of account, 

which will reflect the financial activity that has occurred during the month. Any net payment due an 

agency in relation to this processing is electronically transferred to the agency‘s financial institution 

approximately 30 days after ED receives an acceptable report. 
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Unless otherwise specified, report only on activities on loans guaranteed under the FFEL Program 

at the time the loan guarantee was issued and which are eligible for, or on which reinsurance was paid. 

Loans guaranteed under other programs administered by the guaranty agency are not to be included in 

this report. 

Enter all dollar amounts greater than zero to the nearest cent, and include the decimal point. 

Reinsurance, Trigger Figure and Collections

FFEL Program loans that a lender makes to a borrower are insured by a guaranty agency. When a 

lender is unable to collect on a loan, it files an insurance claim with the guaranty agency. Guaranty 

agencies pay lender insurance claims on defaulted loans and insurance claims submitted by exceptional 

performers based on the following chart.

Description Loan Amount/ 

Claim Amount

Reimbursement 

Rate (GA to 

Lender)

Reimbursement 

Amount to 

Lender

Reimbursement 

Rate (ED to 

GA)

Reimbursement 

Amount to GA

Lender Insurance (Loan 1st

Disbursed Before 10/1/93)

$1,000.00 100% $1,000.00 100% $1,000.00

Lender Insurance (Loan 1st

Disbursed On/After 10/1/93 

and Before 10/1/98)

$1,000.00 100% $1,000.00 98% $980.00

Lender Insurance (Loan 1st

Disbursed On/After 10/1/98 

and Before 7/1/06)

$1,000.00 98% $980.00 95% $931.00

Lender Insurance (Loan 1st

Disbursed On/After 7/1/06) 

and Before 10/1/12)

$1,000.00 97% $970.00 95% $921.50

Lender Insurance (Loan 1st

Disbursed on/After 10/1/12)

$1,000.00 95% $950.00 95% $902.50

Lender Insurance for Exempt 

Claims (Loan 1st Disbursed 

Before 7/1/06)

$1,000.00 98% $980.00 95% $931.00

Lender Insurance for Exempt 

Claims (Loan 1st Disbursed 

On/After 7/1/06) $1,000.00 100% $1,000.00 100% $1,000.00

Exceptional Performer (Claim 

Submitted Before 7/1/06) $1,000.00 100% $1,000.00 95% $950.00

Exceptional Performer (Claim 

Submitted On/After 7/1/06) 

and Before 10/1/07

$1,000.00 99% $990.00 95% $940.50

Exceptional Performer 

Designation Eliminated, 

effective 10/1/07

N/A N/A N/A N/A N/A

Note: This chart does not take into consideration ―trigger figures rates,‖ i.e., when claims exceed 5% or 

9% of loans in repayment.

ED reimburses the agency for part of its losses. This report is used to request these 

reimbursements. ED reimburses guaranty agencies on the following types of claims:

 Default

 Exempt and lender-of-last-resort loan (defaults)

 Bankruptcy (Chapters 7, 11, 12 and 13)
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 Death or disability

 Closed school or false certification

 Unpaid refunds

 Discharges (teacher loan forgiveness)

Definitions of each of these claim types are given in the instructions. In general, ED reimburses a 

guaranty agency for 100 percent of its losses of all claim types above except default claims, which are 

subject to reduced reimbursement rates. For purposes of reinsurance, a guaranty agency‘s losses consist 

of loan principal, lender interest and guaranty agency claim interest. Non-reinsured GA interest is not 

eligible for reinsurance, even though the guaranty agency must pay it to lenders.

Default claims on loan guarantees transferred to a guaranty agency under a plan approved by the 

Secretary, regardless of the first disbursement date, are always reimbursed at 100, 90 or 80 percent.

Exempt claims are defined as claims with respect to loans for which it is determined that the 

borrower (or the student on whose behalf a parent has borrowed), without the lender‘s or the 

institution‘s knowledge at the time the loan was made, provided false or erroneous information or took 

actions that caused the borrower or the student to be ineligible for all or a portion of the loan or for 

interest benefits thereon. Exempt claims, on loans disbursed on or after July 1, 2006, are reimbursed for 

100 percent of a guaranty agency‘s reinsured losses. 

Lender-of-last-resort loans are loans made only to students who are otherwise unable to obtain 

loans. A lender-of-last-resort loan (default) claim is one on which the borrower failed to make an 

installment payment when due, as defined in the regulations. These claims are always reimbursed for 100 

percent of their reinsured losses.

ED reimburses a guaranty agency (§682.404) for –

 100, 90 or 80 percent of its losses on default claims when the loan was first disbursed before 

October 1, 1993, 

 98, 88 or 78 percent of its losses on loans first disbursed on or after October 1, 1993 but 

before October 1, 1998, and

 95, 85 or 75 percent of its losses on loans first disbursed on or after October 1, 1998.

Default claims are subject to certain ―trigger figures‖ which results in a reduced reimbursement rate. 

At the beginning of each federal fiscal year, ED calculates the trigger figure for each guaranty agency. 

The trigger figures are equal to 5 percent and 9 percent of the guaranty agency‘s loans in repayment at 

the end of the prior fiscal year.

When default claim losses exceed 5 percent of the loans in repayment it ―triggers‖ ED to reimburse 

the agency for only—

 90 percent of its default claim losses on loans first disbursed before October 1, 1993,

 88 percent of its default claim losses on loans first disbursed on or after October 1, 1993 but 

before October 1, 1998, and

 85 percent of its default claim losses on loans first disbursed on or after October 1, 1998.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 15 of 92

When default claim losses exceed 9 percent of loans in repayment, it ―triggers‖ ED to reimburse 

the agency for only—

 80 percent of an agency‘s default claim losses on loans first disbursed before October 1, 

1993, 

 78 percent of an agency‘s default claim losses on loans first disbursed on or after October 1, 

1993 but before October 1, 1998, and 

 75 percent of an agency‘s default claim losses on loans first disbursed on or after October 1, 

1998.

These reduced rates are generally referred to as ―reduced reimbursement rates.‖ The difference 

between the default claim amount paid to the lender and the ―reduced reimbursement rate‖ is the 

agency‘s ―reinsurance complement.‖

Once a default claim is paid to a lender, the guaranty agency becomes the holder of the loan and 

must seek to collect on the loan from the borrower. Since ED reimburses a guaranty agency on defaults, 

the guaranty agency must return to ED a portion of the amount it collects from the borrower. If ED 

reimbursed the guaranty agency at 98, 95, 90, 88, 85, 80, 78, or 75 percent of the default claim paid to the 

lender, then the agency‘s complement on collections from borrowers would be 2, 5, 10, 12, 15, 20, 22 or 

25 percent.

The guaranty agency is also allowed to retain—

 30 percent of the amount of collections received prior to October 1, 1993, 

 27 percent of the amount of collections received on or after October 1, 1993 and before 

October 1, 1998,

 24 percent of the amount of collections received on or after October 1, 1998 and before 

October 1, 2003, and

 23 percent of the amount of collections received on or after October 1, 2003 and before 

October 1, 2007, and

 16 percent of the amount of collections received on or after October 1, 2007.

The amount of the collections, which a guaranty agency must return to ED, is referred to as the 

―Secretary‘s (of Education) equitable share‖ of collections. The formula for calculating the Federal share 

of collections is [total collected less reinsurance complement less GA retention = Federal share of 

collections].
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 16 of 92

Financial Processing

When ED accepts an agency‘s monthly report, the system generates a statement of account that 

provides financial information related to its monthly submission. This statement is a summary of all 

monthly activity reported since the last statement was generated. Examples of information the statement 

provides are: the amount of money ED owes the agency for reinsurance and other claims; the agency‘s 

standing in relation to a reduction in its reimbursement percentage (the ―trigger figure‖); and the amount 

of money the agency owes ED for collections on defaulted loans.

Reinsurance claim transactions are considered by ED to occur on the date a guaranty agency‘s 

monthly report is paid by electronic funds transfer (EFT) by ED.

An agency‘s ―trigger figure‖ is adjusted for the fiscal year in which the approval date falls. This is not 

necessarily the same fiscal year in which:

 the guaranty agency paid the claim to the lender,

 the guaranty agency reported the transactions to ED, or

 the guaranty agency received the reinsurance payment from ED.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 17 of 92

Trigger figure calculation formula

Loans In Repayment2$683,877,349.00

5% Trigger = Loans In Repayment * 5% $ 34,193,867.45

9% Trigger = Loans in Repayment * 9% $ 61,548,961.41

Amount Requested Fiscal Year to Date (FYTD)3$ 19,826,542.97

Dollars Paid Fiscal Year to Date4$ 19,346,754.82

Rehabilitated Loans Applied - FYTD5$ 1,327,585.47

Rehabilitated Loans Unapplied – Carry Over CFY5

Rehabilitated Loans Applied – PFY6

Refunds Applied – FYTD7$ 32,696.30

Refunds Unapplied – Carry Over CFY8

Refunds Applied – PFY9

Trigger Basis Amount10 $ 17,986,473.05

Percent of Request Paid11 97.58%

Trigger Rate12 2.63%

2 Loans In Repayment [AR-1 (-) AR-2 (+) AR-3 (-) AR-4 (-) AR-5 (+) AR-6 (-) AR-7 (-) AR-8 (-) AR-9 (-) 

AR-10 (-) AR-11 (-) AR-12 (-) AR-13 (-) AR-14]

3 Amount Requested Fiscal Year To Date = FYTD Total MR-1-A, ―Other Amounts.‖

4 Dollars Paid Fiscal Year To Date = FYTD Total MR-1-A, ―Principal Amount‖.

5 Rehabilitated Loans Applied FYTD = FYTD Total MR-10, ―Default Principal Amount‖, until GA hits 5% 

trigger.

5Rehabilitated Loan Unapplied – Carry Over CFY. After GA hits 5% trigger, rehabilitated loans will be 

stored for credit to the next fiscal year.

6Rehabilitated Loan Applied – PFY. This field will be populated when a GA hits the 5% trigger in the prior 

fiscal year and they had an amount in ―Rehabilitated Loan Unapplied – Carry Over CFY.‖

7Refunds Applied FYTD = FYTD Total MR-7-A, Partial Refunds, Defaults, Principal Amount + FYTD 

MR-5-A, Repurchases CFY, Defaults, Principal Amount, if GA has a repurchase agreement.

8Refunds Unapplied = Carry Over CFY. After GA hits 5% trigger, refunds will be stored for credit to the 

next fiscal year.

9Refunds Applied = Carry Over PFY. This field will be populated when a GA hit the 5% trigger in the prior 

fiscal year and they had an amount in ―Refunds Unapplied – Carry Over CFY.‖

10Trigger Basis Amount = Dollars Paid FYTD less Rehabilitated Loans Applied less Refunds Applied.

11Percent of Request Paid = Dollars Paid FYTD/Amount Requested FYTD.

12Trigger Rate = (Trigger Basis Amount/Loans in Repayment)*100.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 18 of 92

Collections, on defaulted loans, are considered submitted to ED on the date the monthly report is 

received by ED. Amounts due the agency are sent to the agency‘s financial institution via electronic 

funds transfer (through ACH) usually within 30 days after the date of receipt of an error-free report. ED 

will process an agency‘s forms in the order they are accepted. This means that an agency‘s June form 

could be processed before its May form if the June form had no errors, but the May form had to be 

resubmitted several times. This could result in reinsurance claims from an earlier form being paid at a 

lower reinsurance rate than some later claims. The guaranty agency‘s loan level records must reflect this 

lower reinsurance rate. 

ED will normally offset the amounts that a guaranty agency owes ED against amounts ED owes the 

agency. In most cases, this will result in the agency receiving an electronic funds transfer for the 

difference. In those cases where the agency still owes ED money after offset, then the agency‘s monthly 

statement will reflect the balance due ED. If a guaranty agency elects to have the balance due ED 

deducted from their next monthly submission, it is possible that the outstanding balance could be offset 

by pending Account Maintenance Fees or Loan Processing and Issuance Fees payments that are 

processed during the reporting period.

An agency must submit payments by sending ED an electronic funds transfer (EFT) via Fedwire.

For additional information or instructions, contact the Guaranty Agency Reporting Team via e-mail 

at FSA_GAR@ed.gov.

Please consult the Guaranty Agency User Guide for accessing the Financial Management System 

(FMS) when completing the GAFR web application. The user guide can be found at this site: 

http://www.fp.ed.gov/fms.html

For Fiscal Month Of Reporting

When entering the federal fiscal month and federal fiscal year of the month through which activity is 

being reported always use numbers to stand for the federal fiscal month and year and enter the date as 

MM/CCYY. An example of the fiscal month and federal fiscal year is as follows: October 2005 = 

01/2006 and September 2006 = 12/2006 

Line items MR-1 through MR-23 contain guaranty agency monthly activity and all activity from prior 

periods being reported at this time. Line items MR-24 through MR-26 contain guaranty agency monthly 

activity only.

MR – 1 Claims Paid

This section is used to request reimbursement for default and other FFEL program claims paid by 

the guaranty agency to lenders for loan principal and interest. The categories of FFEL program claims 

are: default, exempt (include claims where the student has been convicted of, or plead nolo contendere 

or guilty to, a crime involving fraud in obtaining title IV student aid and claims where the borrower is a 

victim of identity theft), lender-of-last-resort, bankruptcy, death, disability, closed school, false 

certification, unpaid refunds and (teacher loan forgiveness) discharges. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 19 of 92

Include the original reimbursement request and any additional reimbursement requests. Additional 

reimbursement requests are used in situations where either the lender or the guaranty agency did not 

receive the full payment, to which they were legally entitled, when the claim was originally processed, by 

the guaranty agency or ED. Also, use this section to request additional reinsurance reimbursement on a 

default claim when the status changes to exempt and the guaranty agency is entitled to 100 percent 

reimbursement...

If the agency receives a borrower payment from the lender after the date of the lender‘s claim 

payment, reduce the reinsurance claim request amount (MR-1-A, Claims Paid) and the lender claim 

amount (MR-1-A, Other Amounts) by the payment amount.

If the agency receives a borrower payment from the lender after the guaranty agency requests 

reimbursement from ED, treat the payment as a refund and report the payment amount in MR-7, Partial 

Refunds-CFY if the reinsurance is paid in the current fiscal year. If the reinsurance is paid in a prior 

fiscal year, report the payment amount in MR-8, Partial Refunds-PFY.

If the agency receives a payment directly from the borrower, after the date of the lenders‘ claim 

payment, treat the payment as a collection and report these amounts in MR-12, GA Administrative 

Wage Garnishment, MR-13, Default Collections, or MR-14, Bankruptcy Collections, as appropriate.

If the guaranty agency paid a default or lender-of-last-resort loan (default) claim to a lender because 

the borrower could not be located, then it can request reimbursement on the loan only if the agency 

certifies that the lender has made a diligent attempt to locate the borrower through the use of reasonable 

skip-tracing techniques, including contact with the school the borrower attended, in accordance with the 

HEA and ED regulations. The guaranty agency must certify that skip-tracing attempts were made at the 

time reimbursement is requested.

This amount reported in MR-1, Claims Paid does not include amounts paid to lenders for other 

items such as late charges, collection costs, and attorney‘s fees. Also excluded is non-reinsured GA 

interest.

The Secretary pays accrued interest on a bankruptcy claim if the guaranty agency was required to hold 

the loan until it was discharged in bankruptcy. A bankruptcy claim paid to a lender prior to July 23, 1992

may meet this condition. A Chapter 7, 11 or 12 bankruptcy claim paid to the lender when the borrower 

filed for discharge on the grounds of undue hardship, and the loan is subsequently discharged, also meets 

this condition. For such a bankruptcy claim, the guaranty agency is entitled to receive interest, which 

accrued (but was held in forbearance) on the discharged loan from the date the guaranty agency paid the 

lender through the earlier of:

 60 days after the date the loan was discharged, or

 the date the agency‘s reinsurance claim is paid by ED.

The lender should repurchase bankruptcy claims paid to lenders prior to July 23, 1992, on which the 

borrower has not filed for a hardship discharge, and the reinsurance amount has been returned to ED.

In the case where the agency submits its claim less than 60 days after the loan was discharged, the agency 

will be unable to calculate the total amount of accrued interest due because it does not know the datethat 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 20 of 92

ED will authorize the reinsurance claim to be paid. Therefore, the agency may calculate the amount of 

interest that accrued through the date the agency files the reinsurance claim and report it in this item. 

After the agency received payment from ED for the claim, the agency may calculate the additional 

interest that has accrued from the date the agency submitted the claim through the earlier of the date ED 

authorized payment of the claim or the 60th day after the loan was discharged. Unless an agency is, 

otherwise, notified by ED, the date ED authorized payment of a claim is the date the agency received the 

payment. The additional interest amount may be claimed in this item. 

If the guaranty agency is holding a bankruptcy claim paid to a lender and the Bankruptcy Court 

proceedings have been concluded without the loan being discharged, then the guaranty agency may not 

file for reinsurance on the loan as a bankruptcy. Instead, the loan goes back into repayment, with any 

interest that accrued during the bankruptcy proceedings being capitalized. The loan must either be 

repurchased by a lender or collected on by the guaranty agency in accordance with program regulations. 

If the loan later goes into default, the guaranty agency may file a default reinsurance claim with ED at 

that time.

For a loan on which a bankruptcy claim is paid to a lender on or after July 23, 1992 and the guaranty 

agency was not required to hold the claim, the guaranty agency can file for reinsurance at once. The 

guaranty agency is not entitled to interest that accrues on such a bankruptcy claim between the time the 

guaranty agency paid the lender and ED pays the agency.

MR 1 Claims Paid - Amount Due To/ (From) Guarantor

This amount is the total reimbursement the guaranty agency is requesting from ED (original and 

additional requests) for all types of claims (i.e., default, exempt, lender-of-last-resort, death, disability, 

closed school, false certification, bankruptcy, unpaid refunds and teacher loan forgiveness 

discharges). This is a system-calculated field that does not allow guaranty agency input. 

Example: The guaranty agency payment to the lender is $9,800, based on the lenders‘ 

requested amount of $10,000 on a default loan (not exempt or LLR) first disbursed on or after 

10/1/98 and before 7/1/06 (i.e., 95% reinsurance reimbursement rate); a $2,000 death/disability 

claim request from the lender; and a $100 borrower payment from the lender after the lender‘s 

default claim was paid but prior to guaranty agency‘s request for reinsurance. The guaranty 

agency‘s reporting would be as follows:
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 21 of 92

ITEM

NO.

CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

OTHER

AMOUNTS

MR-1 Claims Paid $11,210.00

MR-1-A Defaults – Net $9,210.00 $9,800.00

M MR-1-B Ex Exempt/Lender-of-last-resort $ 0.00

MR-1-C Death/Disability $2,000.00

MR-1-D Closed School/False Certification $ 0.00

MR-1-E Bankruptcy $ 0.00

MR-1-F Unpaid Refunds $ 0.00

MR-1-G Discharges $ 0.00

MR-1-A Defaults - Principal Amount

Enter amounts for default claims (original and additional requests) for this reporting period. A 

default claim is one on which the borrower and endorser, if any, or joint borrowers on a PLUS or 

Consolidation loan, failed to make an installment payment when due, or to meet other terms of the 

promissory note, if the Secretary or guaranty agency finds it reasonable to conclude that the 

borrower or endorser, if any, no longer intend to honor the obligation to repay—

 for loans delinquent before 10/7/98, provided that this failure persists for (1) 180 days for a 

loan payable in monthly installments; or (2) 240 days for a loan payable in less frequent 

installments

 for loans delinquent on/after 10/7/98, provided that this failure persists for (1) 270 days for 

a loan payable in monthly installments; or (2) 330 days for a loan payable in less frequent 

installments.

Also, include in this line item any request for reinsurance for loans that default after transfer 

from an insolvent agency under a plan approved by the Secretary. 

The total reimbursement request amount from ED is calculated by multiplying amounts paid to 

lenders, for default claims, by the appropriate reinsurance reimbursement rate (based on date of the 

loans first disbursement) and taking into consideration whether or not the agency has hit either their 

5% or 9% trigger.

MR-1-A Defaults - Other Amounts

This line item is the total amount of original and additional payments made by the guaranty 

agency to lenders for default claims. The amount should include principal and interest paid to 

lenders, and guaranty agency claim interest, for default claims. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 22 of 92

Example: 

The guaranty agency payment to the lender is $9,800, based on the lender requested amount of 

$10,000 on a default (not exempt or LLR) loan first disbursed on or after 10/1/98 and before 

7/1/06 (i.e., .95% reinsurance reimbursement rate). The guaranty agency‘s reporting would be as 

follows:

ITEM

NO.

CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

OTHER

AMOUNTS

MR-1 Claims Paid $9,310.00

MR-1-A Defaults – Net $9,310.00 $9,800.00

Example of Exceptional Performer Reporting: The guaranty agency receives an insurance 

claim on/after July 1, 2006, on a default (not exempt or LLR) from an exceptional performer 

entity for $1,000.00. The guaranty agency payment to the lender is $990.00 (1,000 * 99%). The 

guaranty agency‘s reinsurance claim to ED is $940.50 ($990 * 95%) (i.e., .95% reinsurance 

reimbursement rate). The guaranty agency‘s reporting would be as follows:

ITEM

NO.

CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

OTHER

AMOUNTS

MR-1 Claims Paid $940.50

MR-1-A Defaults – Net $940.50 $990.00

MR-1-B Exempt/Lender-of-last-resort- Principal Amount

Enter amounts for exempt and lender-of-last-resort (default) claims (original and additional 

requests) for this reporting period. 

Exempt claims are filed in situations where the lender determines that the borrower or the 

student on whose behalf a parent has borrowed, without the lender or school‘s knowledge at the 

time the loan was made, provided false or erroneous information or took actions that caused the 

student or borrower to be ineligible for all or a portion of a loan. Also include claims where the 

student has been convicted of, or plead nolo contendere to, a crime involving fraud in obtaining title 

IV student aid and cases where the borrower is a victim of identity theft. Exempt claims are exempt 

from the agency‘s reinsurance trigger calculation, are insured at 100 percent and are reimbursed at 

100 percent for loan disbursements made on/after July 1, 2006.

Lender-of-last-resort loans are loans made only to students who are otherwise unable to obtain 

loans. A lender-of-last-resort (default) claim is one on which the borrower and endorser, if any, 

failed to make an installment payment when due, or to meet other terms of the promissory note. 

Lender -of-last-resort loans are always reimbursed at 100%.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 23 of 92

Example: The lender‘s request to the guarantor is $1,000 on an exempt claim that was first 

disbursed on or after 7/1/06, and a lender-of-last-resort claim for $5,000. The amount reported 

in MR-1-B would be $1,000plus $5,000. The guaranty agency‘s reporting on would be as follows:

MR-1-C Death/Disability - Principal Amount

Enter amounts for death and total disability claims (original and additional requests) for this 

reporting period. A death claim is one on which the loan is discharged due to the borrower‘s death. 

This includes a Federal PLUS loan for a death claim paid to a lender when a student, on whose 

behalf a parent received the Federal PLUS loan, dies. A disability claim is one on which the loan is 

conditionally discharged due to the total and permanent disability of the borrower. 

If a death or disability claim is filed after a default claim was paid to the lender, and the 

reinsurance claim was paid at less than 100 percent of principal and interest, then the complement of 

the reinsurance may be requested using MR-3, Status Change. If a death or disability claim is filed 

after a default or lender-of-last-resort loan (default) claim was paid at 100 percent, even though no 

further reinsurance is due the agency, this change in status is reported in the Non-Payment Activity 

section, MR-20, Default/Lender of Last Resort to Death or Disability.

MR-1-D Closed School/False Certification - Principal Amount

 Enter amounts for closed school or false certification claims (original and additional requests) for 

this reporting period. A closed school claim is one on which a claim is paid to a lender because the 

student was unable to complete the program in which the student was enrolled due to the closure of 

the institution. A false certification claim is one on which a claim is paid to a lender because the 

student‘s eligibility to borrow under the FFEL Program was falsely certified by an eligible institution 

of higher education.

If the borrower files a closed school and/or a false certification claim, after a default claim was 

paid to the lender, and the reinsurance claim was paid at less than 100 percent of principal and 

ITEM

NO. CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

INTEREST 

AMOUNT

OTHER

AMOUNTS

MR-1 Claims Paid 6,000.00

MR-1-A Defaults – Net 0.00 

 MR-1- B Exempt/Lender-of-last-resort 6,000.00

MR-1-C Death/Disability $0.00

MR-1-D Closed School/False Certification $ 0.00

MR-1-E Bankruptcy $ 0.00

MR-1-F Unpaid Refunds $ 0.00

MR-1-G Discharges $ 0.00
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 24 of 92

interest, the complement of the reinsurance may be requested using line MR-3, Status Change. If the 

borrower files a closed school or false certification claim after a default or lender-of-last-resort loan 

(default) claim was paid to the lender and the reinsurance claim was paid at 100 percent, even though 

no further reinsurance is due the agency, this change in status to closed school or false certification 

must be reported in the Non-Payment Activity section, MR-21, Default/Lender of Last Resort to 

Closed School/False Certification.

MR-1-E Bankruptcy - Principal Amount

Enter amounts for Chapter 7, 11, 12 and 13 claims (original and additional requests) for this 

reporting period. 

Chapter 7, and 11 bankruptcy claims are paid to a lender if:

 the borrower has been in repayment status over 7 years from the date on which the 

bankruptcy petition is filed for cases commencing before October 8, 1998, or 

 the borrower begins an action to receive a discharge on the grounds of undue hardship. 

Chapter 12 and 13 bankruptcy claims are claims paid to a lender when a borrower files for relief 

under those chapters of the U.S. Bankruptcy Code.

If the borrower files for bankruptcy after a default claim was paid to the lender, and the 

reinsurance claim was paid for less than 100 percent of principal and interest, then the complement 

of the reinsurance may be requested using line MR-3, Status Change. If the borrower files for 

bankruptcy after a default or lender-of-last-resort loan (default) claim was paid to the lender and the 

reinsurance claim was paid at 100 percent, even though no further reinsurance is due the agency, this 

change in status to bankruptcy must be reported in the Non-Payment Activity section, MR-22, 

Default/Lender of Last Resort to Bankruptcy.

During the course of the bankruptcy proceedings, the agency must report and return to ED, any 

amounts received at the direction of the Bankruptcy Court in MR-14, Bankruptcy Collections. Once 

bankruptcy proceedings are concluded and the loan is discharged, the agency must report and return 

to ED any amounts received at the direction of the Bankruptcy Court in MR-14, Bankruptcy 

Collections.

If the loan is not discharged, it must either be repurchased by a lender or collected on by the 

guaranty agency in accordance with program regulations. The loan reverts to an ―in repayment‖ 

status at the lender. If the borrower does not repay the loan after the repurchase, then the loan 

could go into default. The guaranty agency could pay a default claim on it and file a default 

reinsurance claim using MR-1. This assumes all applicable lender and guaranty agency policies 

concerning defaulted loans were followed.

In addition to arranging the lender‘s repurchase of the loan, the agency must refund to ED any 

bankruptcy reinsurance payment it received and report it on MR-5, Repurchases - CFY (current 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 25 of 92

fiscal year) or MR-6, Repurchases - PFY (prior fiscal year). Also, report the account balance at 

conversion (from bankruptcy to default) in MR-23, Bankruptcy to Default/Lender-of-last-resort, if 

the loan was originally purchased as a default and collections resume due to dismissal of the 

bankruptcy proceedings.

MR-1-F Unpaid Refunds - Principal Amount

Enter amounts for unpaid (school) refunds (original and additional requests) for this reporting

period. An unpaid refund, in the case of an open or closed school, is a discharge of a former or 

current borrower‘s (and any endorser‘s) obligation to repay that portion of a FFEL loan (disbursed 

on or after January 1, 1986) equal to the refund that should have been made by the school. Include 

in this amount any accrued interest and other charges associated with the unpaid refund, which are 

also discharged. 

In accordance with the unpaid refund provisions, calculate the amount paid to lenders for these 

refunds. Add to this figure the amount of the reinsurance complement requested by the agency on 

loans it holds for which the borrower qualifies for an unpaid refund.

Also, see MR-31, Other Transactions Affecting Federal Receivable, to report the federal 

receivable portion of unpaid refund discharges on guaranty agency held loans.

MR-1-G Discharges 

This line item will be used to request reimbursement due to teacher loan forgiveness discharges 

and partial discharges of consolidation loans.

Teacher loan forgiveness is a discharge of a borrower‘s obligation to repay up to $5,000 or up to 

$17,500 of their outstanding student loan balances. Forgiveness is available to a borrower who has 

no outstanding loan balance under the FFEL Program or the Direct Loan Program on October 1, 

1998 or has no outstanding loan balance on the date he or she obtains a loan after October 1, 1998. 

The Secretary pays the guaranty agency a percentage of the discharge that is equal to the complement 

of the reinsurance percentage paid on the loan. The payment may also include interest that accrues 

on the discharged amount during the period from the date the guaranty agency received payment 

from the Secretary to the date on which the guaranty agency determines that the borrower is eligible 

for the teacher loan forgiveness.

A partial discharge of a Consolidation loan occurs when a loan was obtained jointly by a married 

couple if one of the borrowers dies or becomes totally and permanently disabled. The amount of 

the Consolidation loan that is discharged is equal to the portion of the outstanding balance of the 

Consolidation loan, as of the date the borrower died or became totally and permanently disabled, 

attributable to any of that borrower's loans that would have been eligible for discharge.

In accordance with the teacher loan forgiveness provisions and the partial discharge of 

Consolidation loans provisions, calculate the amount paid to lenders for discharges. Add to this 

figure the amount of the reinsurance complement requested by the agency on loans it holds for 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 26 of 92

which the borrower qualifies for teacher loan forgiveness discharge or partial discharge of a 

Consolidation loan.

Enter amounts for teacher loan forgiveness discharges and partial discharges of Consolidation 

loans, (original and additional requests) for this reporting period. 

Example: A guaranty agency pays lenders for three teacher loan forgiveness discharges:

Borrower Amount

#1 $ 5,000,00

#2 3,000.00

#3 5,000.00

Subtotal 13,000.00

In addition, the guaranty agency has two requests for teacher loan forgiveness discharges 

on loans they hold: 

Borrower Amount

Reinsurance 

Reimbursement

GA 

Complement

#4 $ 1,000,00 1000 - (1000*98%) $20.00

#5 $ 500.00 500 - (500*95%) $25.00

Subtotal $45.00

The amount entered in MR-1-G, Discharges, Principal Amount is $13,045.00.

ITEM

NO. CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

INTEREST 

AMOUNT

OTHER

AMOUNTS

MR-1 Claims Paid $30, 525.00

MR-1-A Defaults – Net $9,500.00 $10,000.00

 MR-1-B Exempt/Lender-of-last-resort $5,980.00

MR-1-C Death/Disability $2,000.00

MR-1-D Closed School/False Certification $ 0.00

MR-1-E Bankruptcy $ 0.00

MR-1-F Unpaid Refunds $ 0.00

MR-1-G Discharges $13,045.00

Also, see MR-31, Other Transactions Affecting Federal Receivable, to report the federal 

receivable portion of teacher loan forgiveness discharges and partial discharges of Consolidation 

loans, on guaranty agency held loans.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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MR-2 Borrower Payment Return (Closed School/False Certification)

This category is used to refund collections, including wage garnishment collections, to a guaranty 

agency, which were received on a closed school or false certification claim and returned to the borrower 

after reinsurance was paid. These collections must be returned by the guaranty agency to the borrower. 

Also, include amounts for collections received by the lender, and returned to the borrower by the 

guaranty agency after claim payment. This policy applies only to a loan, disbursed in whole or in part, on 

or after January 1, 1986. This is a supplemental request for reinsurance, directly related to borrower 

payments and not a line item for initial reporting of closed school/false certification reinsurance requests.

This situation is most likely to occur on accounts that were originally paid as defaults where the 

borrower made payments to the guaranty agency, and subsequently there was a change in status to closed 

school or false certification. Under this situation, if the original default claim was reported in MR-1, 

Claims Paid, and was paid at less than 100 percent and the agency reported it in MR-3, Status Change, 

for supplemental insurance, the reporting in this Section would be at the 100 percent reimbursement 

rate.

On closed school or false certification claims, all collections received by the lender and returned to 

the borrower by the agency before reinsurance was paid are reported in MR-1, Claims Paid.

The borrower is entitled to a full refund of these collections and ED must refund the entire 

collection amount to the guaranty agency. Collections refer to collection of: principal, purchased interest 

(lender interest, guaranty agency claim interest and non-reinsured GA interest), accrued interest, and any 

collection charges permitted by law, regulation, or the borrower‘s promissory note.

MR-2 Borrower Payment Return – Amount Due To/ (FROM) Guarantor

MR-2, Borrower Payment Return - Amount Due To/ (From) Guarantor is the sum of amounts 

reported in MR-2, Principal Amount, Interest Amount, and Other Amounts. This is a systemcalculated field that does not allow guaranty agency input. 

MR-2 Borrower Payment Return - Principal Amount

Enter amount of collections that were applied to the portion of each borrower‘s account that 

represents principal and purchased interest. Do not include amounts paid for other charges such as 

collection costs, late charges and attorney‘s fees. 

MR-2 Borrower Payment Return - Accrued Interest

Enter amount of collections that were applied to the portion of each borrower‘s account that 

represents accrued interest.

MR-2 Borrower Payment Return - Other Charges

Enter amount of collections that were applied to the portion of the borrower‘s account that 

represents other charges. Include collection costs, late charges and attorney‘s fees.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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MR-3 Status Changes 

This category is used for reporting on default claims originally paid at a reduced reinsurance rate but 

which are now eligible for full reimbursement because the borrowers‘ claim status has changed. Though 

a guaranty agency may be paid at a reduced reinsurance rate on a default claim, the agency is entitled to 

receive reimbursement for 100 percent of principal, lender interest, and guaranty agency claim interest on 

the following types of claims:

 Death or disability;

 Closed school, and false certification, and 

 Bankruptcy

If a guaranty agency pays a default claim for which it receives less than 100 percent reinsurance, and 

the status of the borrower claim changes to one of those listed above, the guaranty agency can recoup 

the rest of its losses from ED by requesting supplemental reinsurance on the line items below.

Reinsurance default claims paid at 100 percent, and lender-of-last-resort loan (default) claims are not 

eligible for supplemental reinsurance if the borrower‘s claim status changes because there is no loss for 

the agency to recoup. To request additional reinsurance on a default claim when the status changes to 

exempt (for loans disbursed on or after July 1, 2006), report the additional amount in MR-1-B, 

Exempt/Lender of Last Resort.

Although this category is used to request the additional portion due the guaranty agency, the account 

balance at conversion must also be reported in MR-20 through MR-23. ED uses this information for 

accounting and other reporting purposes.

MR-3 Status Changes - Amount Due To/ (From) Guarantor

MR-3, Status Changes, Amount Due To/(From) Guarantor, is the total amount of the unpaid 

principal and interest portion of the default claim that the guaranty agency paid to the lender that was 

not reimbursed by ED and is still outstanding at the time this supplemental request is submitted to 

ED. This total amount is the sum of amounts reported in MR-3-A, Unpaid Principal and Unpaid 

Interest through MR-3-C. This is a system-calculated field that does not allow guaranty agency input. 

Example: 

Borrower 

Status 

Changes 

Default To 

Original Claims 

Paid to Lender 

Principal 

Amount

Original Claims 

Paid to Lender 

Interest Amount

ED 

Payment to 

GA 

Principal 

Amt.

ED Payment 

to GA 

Interest 

Amt.

Additional 

Amount due 

GA -

Principal

Additional 

Amount due 

GA -

Interest

Borrower #1 D/D $4,000 @ 95% $1,000 @ 95% $3,800.00 $950.00 $200.00 $50.00

Borrower #2 CS/FS $900 @ 98% $100 @ 98% $882.00 $98.00 $18.00 $2.00

Borrower #3 Bankruptcy $1,000 @ 95% $500 @ 95% $950.00 $475.00 $50.00 $25.00

5,900.00 1,600.00 $5,632.00 $1,523.00 $268.00 $77.00
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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Reporting on GAFR

ITEM

NO. CATEGORY

AMOUNT DUE

TO/(FROM)

GUARANTOR

PRINCIPAL

AMOUNT

INTEREST 

AMOUNT

OTHER

AMOUNTS

MR-3 Status Changes $345.00

 MR-3-A Death/Disability $200.00 $50.00

 MR-3-B Closed School/False Certification $18.00 $2.00

 MR-3-C Bankruptcy $50.00 $25.00

MR-3-A Death/Disability - Principal and Interest

In the appropriate column (principal amount or interest amount) enter the amount for default 

claims for which supplemental reinsurance is being requested due to a change in status of the default 

claim to a death or disability claim. Enter the unpaid principal and interest portions of death and 

disability claims that the guaranty agency paid to the lender that were not reimbursed by ED and are 

still outstanding at the time this supplemental reinsurance request is submitted. 

Example: The guaranty agency files a default reinsurance claim for $1000 for a loan first 

disbursed on or after October 1, 1993 but before October 1, 1998. The reinsurance request is 

for the amount of the claim paid to the lender that is the ―loss‖ the agency incurred. The 

guaranty agency is paid 98 percent of this request or $980. The agency has not reached the 

trigger for default reinsurance payments for the current fiscal year and is eligible for 98 percent 

reinsurance on its losses, for a total of $980. The borrower becomes totally and permanently 

disabled the following year. The guaranty agency may now use this Category to request payment 

of the $20 (2 percent not paid in reinsurance).

Also, report the account balance at conversion (from default to death and disability) in MR-20, 

Default/Lender of Last Resort to Death and Disability.

MR-3-B Closed School/False Certification - Principal and Interest

In the appropriate column (principal amount or interest amount) enter the amount of default 

claims for which supplemental reinsurance is being requested due to a change in status of the default 

claim to a closed school or false certification claim (include supplemental requests for claims where 

the borrower is a victim of identity theft). Enter the unpaid principal and interest portions of closed 

school or false certification claims that the guaranty agency paid to the lender that were not 

reimbursed by ED and are still outstanding at the time this supplemental reinsurance request is 

submitted. 

Also, report the account balance at conversion (from default to closed school/false certification) 

in MR-21, Default/Lender of Last Resort to Closed School/False Certification.

MR-3-C Bankruptcy - Principal and Interest

In the appropriate column (principal amount or interest amount) enter the amount for default 

claims for which supplemental reinsurance is being requested due to change in status of the default 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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claim to a bankruptcy claim. Enter the unpaid principal and interest portions of bankruptcy claims 

that the guaranty agency paid to the lender that were not reimbursed by ED and are still outstanding 

at the time this supplemental reinsurance request is submitted.

If a borrower files for bankruptcy after a default claim was paid to the lender, and the 

reinsurance claim was paid at less than 100 percent of principal and interest, the guaranty agency may 

claim reimbursement for the complement of the reinsurance in this category.

Also, report the account balance at conversion (from default to bankruptcy) in MR-22, 

Default/Lender of Last Resort to Bankruptcy.

During the course of the bankruptcy proceedings, the agency must return and report to ED any 

amounts received at the direction of the Bankruptcy Court on line MR-14, Bankruptcy Collections. 

Do not net them from the amount reported here. Once bankruptcy proceedings are concluded and:

 a repayment plan is established the agency must report and return to ED any amounts 

received at the direction of the Bankruptcy Court on line MR-14, Bankruptcy Collections;

 the loan is not discharged, it must either be repurchased by a lender or collected on by the 

guaranty agency in accordance with program regulations, and the agency must refund to ED 

any additional bankruptcy reinsurance payment it received and report it on either MR-7, 

Partial Refund – CFY or MR-8, Partial Refund – PFY, as appropriate. 

Also, report the account balance at conversion (from bankruptcy to default) in MR-23 

Bankruptcy to Default/Lender of Last Resort.

MR-4 TOP Overpayments 

The Treasury Offset Program (TOP) category reports activity on accounts after offsets have 

occurred. Overpayment refunds are made to borrowers by the guaranty agency when the offset amount 

exceeds the balance (principal and interest) due on the borrower‘s account. 

MR-4 TOP Overpayments - Amount Due To/ (From) Guarantor

MR-4, TOP Overpayments - Amount Due To/ (From) Guarantor is that portion of the offset 

that is in excess of the balance due on the defaulted borrower‘s account that was refunded to the 

borrower. This amount is the sum of amounts reported in MR-4, Principal Amount, Interest 

Amount and fees (reported in the Other Amounts column) and will be automatically calculated. 

This is a system-calculated field that does not allow guaranty agency input. 

MR-4 TOP Overpayments – Principal

Enter amount refunded for this TOP offset activity that was applied to the portion of each 

borrower‘s account that represents principal and purchased interest. If the amount of the TOP 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 31 of 92

offset results in the borrower overpaying the amount due on the borrower‘s account, and then

report that portion of the overpayment, which cannot be correctly charged to any category in this 

item.

Do not include amounts for other costs such as collection costs, late charges and attorney‘s fees 

because they cannot be collected through the TOP offset process.

MR-4 TOP Overpayments – Interest Amount

Enter amount refunded for this TOP offset activity that is applied to the portion of each 

borrower‘s account that represents accrued interest.

MR-4 TOP Overpayments – Other Amounts

Enter amount refunded for this TOP offset activity that is applied to the portion of each 

borrower‘s account that represents the TOP processing fee.

MR-5 Repurchases - Current Fiscal Year (CFY)

This category is used to refund to ED (―repurchases‖) the amount paid a guaranty agency on a 

reinsurance claim because the reinsurance claim was not valid. In conjunction with this, the insurance 

claim the guaranty agency paid the lender may not be valid, and the lender may be required to refund the 

amount of the insurance claim to the guaranty agency.

Examples: A borrower moves to study in a foreign country, but the borrower‘s request 

for an in-school deferment is misplaced. The lender cannot contact the borrower and 

believes the loan should be in repayment. The lender files a default claim. The guaranty 

agency pays the claim and receives reinsurance from ED. The agency finally locates the 

borrower and determines the borrower should not have been placed in default. The 

guaranty agency arranges for the lender to repurchase the loan. The agency then provides a 

full refund of the default reinsurance claim to ED.

The guaranty agency files a reinsurance claim for bankruptcy with ED and is paid. The guaranty 

agency then receives a notice from the Bankruptcy Court informing the agency that bankruptcy 

proceedings have been concluded and that the loan was not discharged. The guaranty agency 

must arrange for the lender to repurchase the loan and provide a full refund of the bankruptcy 

reinsurance claim to ED. The lender must place the borrower back in repayment although the 

borrower could subsequently default on the loan. 

A guaranty agency must file a refund if it determines that it made an invalid reinsurance claim. An 

agency must also file a refund on any bankruptcy claim where the bankruptcy proceedings were 

concluded and the Bankruptcy Court does not discharge the loan. For example a refund would be 

required if the borrower does not comply with the requirements of the Wage Earner Plan and the 

Bankruptcy Court dismisses the case.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 32 of 92

A guaranty agency must file a full refund of reinsurance to ED within 45 days of:

 receiving a notice from the Bankruptcy Court informing the agency that bankruptcy 

proceedings have been concluded and that a loan on which ED paid a bankruptcy 

reinsurance claim was not discharged, or

 In all other cases, unless otherwise directed, the date that the agency discovers that a full 

refund of reinsurance is due to ED.

Full refunds of default claims are refunds to ED for the full amount of the default reinsurance. 

Refunds are reduced by borrower payments forwarded to ED. If a default reinsurance claim was paid to 

the guaranty agency at a reduced reinsurance rate, the refund to ED must be made at that rate. Amount 

remitted = (outstanding principal * reinsurance reimbursement rate). The effect of a full refund of a 

default claim on a guaranty agency‘s ―trigger figure‖ depends upon whether the agency has a repurchase 

agreement with ED:

If a guaranty agency has a repurchase agreement:

 ED reduces the total of default claims paid which are subject to the reinsurance trigger 

by the amount of the refund. This rule applies if the refund is for a reinsurance default 

claim paid during the current federal fiscal year. Once the guaranty agency has exceeded 

its trigger for the current federal fiscal year, subsequent full refunds do not affect the 

trigger calculation. Instead, the refund amount is credited against default claims paid to 

the guaranty agency in the following federal fiscal year.

 Full refunds of a reinsurance default claim paid during a previous federal fiscal year do 

not affect any trigger calculations.

 If a full refund of a default claim is made more than 30 days after the guaranty agency 

received the reinsurance payment, the agency must pay ED interest on the repurchased 

loan. The interest rate is the rate specified on the borrower‘s promissory note. Report 

the unpaid interest from the date of the reinsurance payment until the date the refund is 

reported to ED.

 A repurchase agreement covers default claims. It does not apply to exempted, 

bankruptcy, death and disability, closed school, false certification, or lender-of-last-resort 

loan claims because these claims do not affect a guaranty agency‘s trigger figure.

If a guaranty agency does not have a repurchase agreement:

 A full refund has no effect on the agency‘s reinsurance trigger calculation. 

 A guaranty agency is not required to pay interest on full refunds.

Repurchases have two sections. The columns are the same for each section. Each section has five line 

items and the items are the same for each section. The purpose of the two sections is to enable ED to
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 33 of 92

properly process current and prior fiscal year refunds of guaranty agencies, which have repurchase 

agreements with ED, and for ED‘s accounting procedures. Repurchase agreements provide for different 

treatment of reinsurance claims paid in a current fiscal year and in prior fiscal years.

For the items in this section enter the information requested in each column, for the claims included 

in the reporting period, using the following definitions.

MR-5 Repurchases - CFY - Amount Due To/ (From) Guarantor

MR-5, Repurchases - CFY - Amount Due To/ (From) Guarantor, is the total dollar amount of 

current fiscal year repurchased claims for the reporting period for which the guaranty agency is 

making a full refund of reinsurance. This amount is the sum of MR-5-A through MR-5-E, Principal 

Amount, Interest Amount, and Other Amounts, as applicable. This is a system-calculated field that 

does not allow guaranty agency input. 

MR-5 Repurchases - CFY - Principal Amount

Enter the outstanding principal amount net of any complement for each type of claim for:

 principal, 

 lender interest,

 guaranty agency claim interest,

 collection cost for closed school or false certification claims,

 allowable outstanding collection costs on rehabilitated loans that subsequently 

default,

 for closed school or false certification claims the amount of collections the agency 

returned to the borrower at the time the claim was paid to the lender, and

 accrued interest on a bankruptcy claim if the guaranty agency was required to hold 

the loan until it was discharged in bankruptcy. 

The Secretary pays accrued interest on a bankruptcy claim if the guaranty agency was required 

to hold the loan until it was discharged in bankruptcy. A bankruptcy claim paid to a lender prior 

to July 23, 1992 may meet this condition. A Chapter 7 or 11 bankruptcy claim paid to the lender 

when the borrower filed for discharge on the grounds of undue hardship, and the loan is 

subsequently discharged, also meets this condition. For such a bankruptcy claim, the guaranty 

agency is entitled to receive interest that accrued (but was held in forbearance) on the discharged 

loan from the date the guaranty agency paid the lender through the earlier of:

 60 days after the date the loan was discharged, or

 the date the agency‘s reinsurance claim is authorized to be paid by ED
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 34 of 92

The lender must repurchase claims paid to lenders prior to July 23, 1992, on which the 

borrower has not filed for a hardship discharge, and reinsurance must be returned to ED. In the 

case where the agency submits its claim less than 60 days after the loan was discharged, the 

agency will be unable to calculate the total amount of accrued interest due because it does not 

know the date that ED will authorize the reinsurance claim to be paid. Therefore, the agency 

may calculate the amount of interest that accrued through the date the agency files the 

reinsurance claim and report it in this column. After the agency receives payment from ED for 

the claim, the agency may calculate the additional interest that has accrued from the date the 

agency submitted the claim through the earlier of the date that ED authorized payment of the 

claim or the 60th day after the loan was discharged. Unless ED notifies the agency, the date ED 

authorizes payment of a claim is the date the agency receives the payment. 

If the guaranty agency is holding a bankruptcy claim paid to a lender and the Bankruptcy 

Court proceedings have been concluded without the loan being discharged, then the guaranty 

agency may not file a claim on the loan as a bankruptcy. Instead, the loan goes back into 

repayment, with any interest that accrued during the bankruptcy proceedings being capitalized. 

The loan must either be repurchased by a lender or collected by the guaranty agency in 

accordance with program regulations. 

If the loan later goes into default, the guaranty agency may file a default reinsurance claim 

with ED at that time. 

For a loan on which a bankruptcy claim is paid to a lender on or after July 23, 1992, and the 

guaranty agency was not required to hold the claim, the guaranty agency can file for 

reimbursement at once. As with a reimbursement of a death or disability claim, the guaranty 

agency is not entitled to any interest, which accrues on such a bankruptcy claim between the time 

the guaranty agency paid the lender and the time ED pays the agency.

This amount does not include amounts paid to lenders for other items such as late charges, 

collection cost, and attorney‘s fees. It also excludes non-reinsurance GA interest. If the nonreinsured GA Interest amount has been capitalized the agency must reduce this amount and 

report it in the Other Amounts column. For closed school or false certification claims, 

outstanding principal includes any collection costs paid by ED.

MR-5 Repurchases - CFY - Accrued Interest Due ED

Enter the amount of outstanding accrued interest due ED on default claims calculated at the rate 

specified on each defaulted borrower‘s promissory note. This applies only if:

 it is a default claim

 the guaranty agency has a repurchase agreement with ED, and

 the refund is made over 30 days after the reinsurance payment.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 35 of 92

The unpaid interest due ED is calculated from the date the original reinsurance reimbursement 

payment was received until the date the refund is reported to ED. Interest need not be paid on a 

default claim which is refunded within 30 days of the date reinsurance was paid. If no interest is due 

on any of the default claims being refunded, enter a zero. If the agency does not have a repurchase 

agreement with ED enter zero.

The total refund due ED for this line item is the:

 outstanding principal net of any complement plus,

 outstanding accrued interest due ED 

MR-5 Repurchases - CFY – Other Amounts

Enter the amount of outstanding non-reinsured GA interest which is the outstanding amount as 

calculated by the guaranty agency on the loan principal while a lender‘s insurance claim is being 

processed by the guaranty agency, but which was not eligible for reinsurance from ED.

Though this interest must be paid to the lender by the guaranty agency as part of an insurance 

claim, it is not subject to reinsurance by ED. However, the Secretary of Education is entitled to an 

equitable share of any of this interest collected from a borrower. 

If non-reinsured GA interest is capitalized in the outstanding principal net of any complement, 

the agency must reduce the outstanding principal by the original amount of non-reinsured GA 

interest. Reduce the amount reported in the Principal Amount and report the original amount of 

non-reinsured GA interest in the Other Amounts column.

MR-5-A Repurchases - CFY - Defaults

Enter the amount related to default claims being refunded in full for which reinsurance was 

paid during the current fiscal year for this reporting period. A default claim is one on which the 

borrower and endorser, if any, or joint borrowers on a PLUS or Consolidation loan, failed to 

make an installment payment when due, or failed to meet other terms of the promissory note, if 

the Secretary or guaranty agency finds it reasonable to conclude that the borrower or endorser, if 

any, no longer intends to honor the obligation to repay, provided that failure persists: 

For loans delinquent before 10/7/98 

--180 days for a loan payable in monthly installments and 

--240 days for a loan payable in less frequent installments; 

For loans delinquent on/after 10/7/98,

--270 days for a loan payable in monthly installments or

--330 days for a loan payable in less frequent installments. 

MR-5-B Repurchases - CFY - Exempt /Lender-Of-Last-Resort

Enter the amount related to exempt and lender-of-last-resort claims being refunded for 

which reinsurance was paid during the current fiscal year for this reporting period. An exempt 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 36 of 92

claim is one on which the borrower defaulted after the lender determined that the borrower or 

student failed to establish eligibility for the loan. Also include claims where the student has been 

convicted of, or plead nolo contendere to, a crime involving fraud in obtaining title IV student 

aid or in cases where the borrower is a victim of identity theft. Exempt claims on loans first 

disbursed before July 1, 2006 were subject to reduced reimbursement and the reinsurance 

complement should be reduced from amounts reported here. Lender-of-last-resort loans are 

loans made only to students who are otherwise unable to obtain loans. A lender-of-last-resort 

loan (default) claim is one on which the borrower and endorser, if any, failed to make an 

installment payment when due, or to meet other terms of the promissory note. 

This is only a general description of exempted and lender-of-last-resort claims. Refer to 

appropriate regulations and policy bulletins for specifics.

MR-5-C Repurchases - CFY – Death/Disability

Enter the amount related to death and total disability claims being refunded in full for which a 

claim was paid during the current fiscal year for this reporting period. A death claim is one on 

which the balance of the loan is canceled due to the borrower‘s death. This includes a Federal 

PLUS loan death claim paid to a lender when a student, on whose behalf a parent received the 

Federal PLUS loan, dies. A disability claim is one on which the balance of the loan is 

conditionally discharged due to the total and permanent disability of the borrower.

MR-5-D Repurchases - CFY - Closed School/False Certification

 Enter the amount related to closed school or false certification claims being refunded in full 

for which reinsurance was paid during the current fiscal year for this reporting period. A closed 

school claim is one on which a claim is paid to a lender because the student was unable to 

complete the program in which the student was enrolled due to the closure of the institution. A 

false certification claim is one on which a claim is paid to a lender because the student‘s eligibility 

to borrow under the FFEL Program was falsely certified by an eligible institution of higher 

education.

MR-5-E Repurchases - CFY - Bankruptcy (Chapter 7, 11, 12 and 13) 

Enter the amount related to Chapter 7, 11, 12 and 13 bankruptcy claims being refunded in 

full for which reinsurance was paid during the current fiscal year for this reporting period. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 37 of 92

Chapter 7 and 11 bankruptcy claims are paid to a lender if:

 The borrower has been in repayment status for over 7 years from the date on 

which the bankruptcy petition is filed for cases commencing before October 8, 

1998, or

 The borrower begins an action to receive a discharge on the grounds of undue 

hardship.

Chapter 12 or 13 bankruptcy claims are claims paid to lender when a borrower files for 

relief under those chapters of the U.S. Bankruptcy Code. During the course of the 

bankruptcy proceedings, the agency must report and return to ED, any amounts paid at the 

direction of the Bankruptcy Court. These amounts are not refunds. 

If the bankruptcy proceedings are concluded and the loan is discharged, then the agency 

must report and return to ED, any amounts paid at the direction of the Bankruptcy Court. 

These amounts are not refunds.

If the bankruptcy proceedings are concluded and the loan is not discharged, then the 

agency must refund in full the outstanding amount of the reinsurance bankruptcy payment it 

received from ED. The guaranty agency also must arrange for a lender to repurchase the 

loan. The loan reverts to an ―in repayment‖ status at the lender. If the borrower does not 

repay the loan after repurchase, then the loan could go into default. The guaranty agency 

could pay a default claim on it and file a default reinsurance claim. This assumes all 

applicable lender and agency policies concerning defaulted loans were followed.

If the borrower defaulted prior to filing bankruptcy and:

 the reinsurance claim was paid at only 98, 95, 90, 88, 85, 80, 78 or 75 percent of 

principal and interest and the complement of the reinsurance was paid under 

MR-3 C, Status Changes, when the borrower filed bankruptcy, and 

 the bankruptcy proceedings are concluded and the loan is not discharged, or 

 the borrower filed for bankruptcy after a default or lender-of-last-resort loan 

(default) claim was paid to the lender,

then the agency must refund to ED any additional bankruptcy reinsurance payment it 

received in MR-5 and MR-6. The guaranty agency would continue to hold the loan and 

attempt to collect on it like any other default claim.

The agency must report and return to ED any amounts paid at the direction of 

Bankruptcy Court. These amounts should be reported in MR-14, Bankruptcy 

Collections because they are not refunds.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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MR-6 Repurchases for Reinsurance Claims Paid in Prior Fiscal Year 

In MR-6-A through MR-6-E enter the information for repurchases of reinsurance claims paid in all 

previous fiscal years in this section. This includes any refund of reinsurance where the claim was not paid 

in the current fiscal year. Use the instructions for the line items with this same title from the Repurchases 

- Current Fiscal Year category, taking into account that this category covers only reinsurance paid in 

previous fiscal years.

MR-6 Repurchases - PFY - Amount Due To/ (From) Guarantor

MR-6, Repurchases - PFY - Amount Due To/(From) Guarantor is the total dollar amount of 

prior fiscal year repurchased claims for the reporting period for which the guaranty agency is making 

a full refund of reinsurance. This amount is the sum of MR-6-A through MR-6-E, Principal 

Amount, Interest Amount and Other Amounts, as applicable. This is a system-calculated field that 

does not allow guaranty agency input.

MR-7 Partial Refunds - Current Fiscal Year (CFY) 

This category is used to refund part of a reinsurance claim paid by ED when a lender refunded part 

of the insurance claim paid by the guaranty agency. Borrower payments received by the lender and 

forwarded to the guaranty agency are not subject to collection retention and should be reported here. 

Borrower payments received by the guaranty agency after the default claim has been paid to the holder 

are treated as a collection and should not be reported in this line item.

If the agency receives a claim overpayment from a lender after an insurance claim was paid, but prior 

to reinsurance being requested, treat the payment as a refund and reduce the reinsurance claim amount 

(MR-1) by the amount refunded. 

The guaranty agency must reimburse ED for the entire amount of lenders partial refund and report 

this payment as an overpayment refund on all except a default claim. On a default claim, the guaranty 

agency can reduce the refund by any complement if reinsurance was originally paid at a reduced rate. 

The effect of a partial refund of a default claim on a guaranty agency‘s ―trigger figure‖ depends upon 

whether the agency has a repurchase agreement with ED:

 If a guaranty agency has a repurchase agreement ED will reduce the total of default 

claims paid which are subject to the reinsurance trigger by the amount of the partial 

refund. This rule applies if the refund is for a reinsurance default claim paid during the 

current fiscal year. Once the guaranty agency has exceeded its trigger for the current 

fiscal year, subsequent partial refunds do not affect the trigger calculation. Instead, the 

partial refund amount is credited against default claims paid to the guaranty agency in the 

following federal fiscal year. A partial refund of a reinsurance default claim paid during a 

previous Federal fiscal year does not affect any trigger calculations. A repurchase 

agreement only covers default claims. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 39 of 92

 If a guaranty agency does not have a repurchase agreement, a partial refund affects the 

agency‘s reinsurance trigger calculation up to the time the agency exceeds the trigger. 

The trigger is affected only for partial refunds when the reinsurance claim was paid 

during the current fiscal year.

Example

Principal Interest Other

Amount of Default Claim Paid to 

Lender

$1,000.00 

GA Reimbursement Rate 95%

Borrower Payment Received $100.00 $50.00 $25.00 $25.00

GAFR Reporting

______________________________ _________ ______________ ______________________

If borrower payment is received by the 

lender and forwarded to the guaranty 

agency before the guaranty agency files 

for reinsurance. 

MR-1 ($1,000 – 100) * 

95%

=$855.00

If borrower payment is received by the 

lender and forwarded to the guaranty 

after lender claim payment. 

MR-7 or 

MR-8

($100 * 95%) =

$95.00

If borrower payment is received 

directly by the guaranty agency after

the default insurance claim has been 

paid to the lender. 

MR-12 or 

MR-13

($50 *95%) less 

($50*23%) 

=$36.00

($25 * 95%) 

less

($25 * 23%)

= $18.00

($25 * 95%) 

less

($25 * 23%)

= $18.00

MR-7 Partial Refunds - CFY - Amount Due To/ (From) Guarantor

This amount is the total for partial refund amounts that the guaranty agency is refunding for 

all claim types, less any complement, if the reinsurance was originally paid at a reduced 

reimbursement rate. 

It does not include amounts paid to lenders or the guaranty agency for other items such as late 

charges, collection costs, and attorney‘s fees. It also excludes non-reinsured GA interest. MR-7, 

Partial Refunds - CFY, Amount Due To/ (From) Guarantor, is the sum of amounts reported in 

MR-7-A through MR-7-E, Principal Amount. This is a system-calculated field that does not allow 

guaranty agency input. 

MR-7-A Partial Refunds - CFY - Defaults

Enter the amount of partial refunds of reinsurance related to default claims for this reporting 

period, as defined above. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 40 of 92

Example: The guaranty agency receives a refund from a lender of $100 for a default claim. 

Reinsurance was paid at 95 percent. The guaranty agency would refund only $95, that is, 95% of 

$100, to ED.

MR-7-B Partial Refunds - CFY – Exempt/Lender-of-Last-Resort

Enter the amount of partial refunds of reinsurance for exempt and lender-of-last-resort claims 

for this reporting period, as defined above. 

Reinsurance paid on exempt claims for loans first disbursed on or after July 1, 2006, and lenderof-last-resort claims are not subject to a reduced reinsurance rate. Therefore, the guaranty agency 

must return to ED the entire amount of any partial refund from a lender for such a claim.

MR-7-C Partial Refunds – CFY – Death and Disability

Enter the amount of partial refunds for death and disability claims for this reporting period, as 

defined above. Payments on death or disability claims are not subject to a reduced reinsurance rate. 

Therefore, the guaranty agency must return to ED the entire amount of any partial refund from a 

lender or the guaranty agency for such a claim.

MR-7-D Partial Refunds - CFY - Closed School or False Certification

Enter the amount of partial refunds for closed school or false certification claims for this 

reporting period, as defined above. 

Payments on closed school or false certification claims are not subject to a reduced reinsurance 

reimbursement rate. Therefore, the guaranty agency must return to ED the entire amount of any 

partial refund from a lender or the guaranty agency for such a claim.

MR-7-E Partial Refunds - CFY - Bankruptcy

Enter the amount of partial refunds for Chapter 7, 11, 12 and 13 bankruptcy claims for this 

reporting period, as defined above. 

Payments on a Chapter 7, 11, 12 and 13 bankruptcy claims are not subject to a reduced 

reinsurance rate. Therefore, the guaranty agency must return to ED the entire amount of any 

partial refund from a lender or the guaranty agency for such a claim.

MR-8 Partial Refund - Previous Fiscal Year (PFY) 

In MR-8-A through MR-8-E enter the information for partial refunds paid in all previous fiscal years 

in this section. Use the instructions for the line items with this same title from the Partial Refunds - CFY 

Section (MR-7-A through MR-7-E), taking into account that this Section covers only partial refunds paid 

in previous fiscal years.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 41 of 92

MR-8 Partial Refunds - PFY, Amount Due To/ (From) Guarantor

MR-8, Partial Refunds - PFY, Amount Due To/ (From) Guarantor, is the sum of amounts 

reported in MR-8-A through MR-8-E, Principal Amount. This is a system-calculated field that does 

not allow guaranty agency input. 

MR- 9 Overstated Claims

This category is used to correct and refund reinsurance if the guaranty agency‘s arithmetic or 

typographical errors on previously submitted reinsurance requests and additional reinsurance requests 

resulted in the agency, but not the lender, being overpaid. Also use this category to refund to ED partial 

amounts paid the agency on supplemental reinsurance requests due to a further change in claim status 

back to default if originally paid at less than 100%. 

Further changes in status may also require reporting in the Non-Payment Activity Section, MR-20 

through MR-23, Status Changes - Account Balance at Conversion. 

The guaranty agency must refund to ED the entire amount of the overstated reinsurance claim on all 

except a default claim. On a default claim, the guaranty agency can reduce the refund by any 

complement if reinsurance was originally paid at a reduced rate.

MR-9 Overstated Claims - Amount Due To/ (From) Guarantor

This amount is the total for overstated claims and refund of partial amounts paid to the guaranty 

agency on supplemental reinsurance requests due to a further change in claim status.

MR-9, Overstated Claims - Amount Due To/ (From) Guarantor, is the sum of amounts 

reported in MR-9-A through MR-9-E. This is a system-calculated field that does not allow guaranty 

agency input. 

MR-9-A Overstated Claims - Defaults

Enter the amount of refunds due to overpayment of reinsurance for default claims for this 

reporting period. This amount is reduced by the complement of reinsurance if the guaranty 

agency was originally paid at a reduced rate. 

MR-9-B Overstated Claims - Exempt/Lender of Last Resort

Enter the amount of refunds due to overpayment of reinsurance for exempt and lender of 

last resort (default) claims for this reporting period. 

MR-9-C Overstated Claims - Death/Disability

Enter the amount of refunds due to overpayment of reinsurance for death and disability 

claims for this reporting period. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 42 of 92

MR-9-D Overstated Claims - Closed School/False Certification

Enter the amount of refunds due to overpayment of reinsurance for closed school and false 

certification claims for this reporting period.

MR-9-E Overstated Claims - Bankruptcy

Enter the amount of refunds due to overpayment of reinsurance for bankruptcy claims for 

this reporting period. Also, include amounts due ED as a result of filing a change in status 

supplemental reinsurance request. The account balance at conversion of these status changes 

should also be reported in the Non-Payment Activity section, Status Changes - Account Balance 

at Conversion, MR-23, Bankruptcy to Default/Lender of Last Resort.

MR-10 Rehabilitated Loans 

This category is used to report rehabilitated loan payments due to ED as the result of the sale of 

certain defaulted loans to eligible lenders. A rehabilitated loan is one on which a default, exempt or 

lender-of-last-resort loan reinsurance claim has been paid. If the borrower then makes 12 months of 

consecutive payments, the guaranty agency may sell the loan to an eligible lender. (HERA changed 12 

consecutive monthly payments to 9 payments made within 20 days of the due date during 10 consecutive 

months. The effective date of this provision is July 1, 2006.) The agency then must repay to ED a 

portion of the outstanding principal balance as explained below.

Once the loan is sold back to a lender, the lender is entitled to interest and special allowance 

payments. If the loan defaults again, the lender can file a claim with the guaranty agency and the agency 

can file a reinsurance claim with ED. The reasonable collection costs assessed the borrower are 

capitalized at the time of the loan sale and will be reported as principal if the loan defaults again. 

―Reasonable‖ collection costs, in connection with rehabilitation loans, is an amount that does not exceed 

18.5 percent of the outstanding amount of principal and accrued interest on the loan at the time the 

agency arranges for the lender to purchase the loan or certifies the payoff amount to the purchasing 

lender. Collection costs that accrue after rehabilitation cannot be claimed on a subsequent default.

Rehabilitated loan sales to lenders must be reported to ED within 45 days of their occurrence.

The guaranty agency must pay ED an amount equal to 81.5 percent of the outstanding principal 

balance on the loan at the time of the sale to the lender, multiplied by the reinsurance percentage in 

effect for each portion of the reinsurance claim paid on the loan. For rehabilitated loan reporting, the 

outstanding principal balance is defined as the principal amount of the loan, which includes purchased 

interest, received by the lender from the guaranty agency for the default claim. Borrower payments 

applied may reduce the outstanding principal balance. The outstanding principal balance does not 

include any outstanding interest that accrued since the payment of the claim, or outstanding other 

charges, such as collection costs, late charges, or attorney‘s fees. 

If reinsurance was paid on the loan by multiple reinsurance requests and reinsurance was paid at 

different rates, the agency must prorate its rehabilitated loan payment or pay ED at the highest 

reinsurance rate used.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 43 of 92

The repayment to ED on the sale of a rehabilitated loan affects a guaranty agency‘s ―trigger figure‖ 

in all cases except rehabilitated lender-of-last-resort loan (defaults). Lender-of-last-resort loans (defaults) 

are exempt from the ―trigger figure‖ calculation.

Rehabilitated loans reduce the total amount of default claims paid which are subject to the 

reinsurance trigger by the amount of the repayment. Once the guaranty agency has exceeded its trigger 

for the current federal fiscal year, subsequent repayments do not affect the trigger calculation. Instead, 

the repayment amount is credited against default claims to the guaranty agency in the following federal 

fiscal year. This rule applies whether or not the agency has a repurchase agreement with ED.

Also, include in this item any rehabilitated loans for a loan guarantee transferred from an insolvent 

agency under a plan approved by the Secretary. 

MR-10 Rehabilitated Loan Refund - Amount Due To/ (From) Guarantor

This is the total amount due to ED for the sale of rehabilitated loans to lenders. This amount 

should equal 81.5 percent of the outstanding principal balance on the loan at the time the agency 

arranges with the lender to rehabilitate the loan or certifies the payoff amount to the purchasing 

lender multiplied by the reinsurance percentage in effect for the reinsurance claims paid on the 

loans. The complement should be transferred to the agency‘s federal fund. 

MR-10, Rehabilitated Loan Refund, Amount Due To/ (From) Guarantor, is the sum of the 

amount reported in MR-10, Principal Amount. This is a system-calculated field that does not 

allow guaranty agency input. 

MR-10 Rehabilitated Loans - Principal Amount 

Enter the federal share of outstanding principal balance. This amount is the outstanding 

principal balance that is due to the agency at the time of rehabilitation multiplied by the 

reimbursement rate multiplied by 81.5%.

MR-10-A Rehabilitated Loans- Principal Amount (GA Retention)

Even though this line item is entitled Principal Amount it should reflect the GA retention on 

the rehabilitated loan at the time of the sale. Enter the amount retained by the guaranty agency 

for the sale of rehabilitated loans to lenders. This amount should not exceed 18.5% percent of 

the outstanding principal balance on the loan at the time the agency arranges with the lender to 

rehabilitate the loan or certifies the payoff amount to the purchasing lender. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 44 of 92

Example: Rehabilitation Loan Calculation (Single Loan)

Reinsurance Reimbursement Rate – 98%

Outstanding Principal and Interest Balance at Time of Rehabilitation – $1,000.00 

(Outstanding Principal Balance – $993.27; Accrued Interest – $6.73)

Payoff Amount (for lender to purchase rehabilitated loan) – $1,185.00 [Outstanding 

Principal and Interest Balance of $1,000.00 plus Collection Cost of $185.00 ($1,000.00 * 

18.5%)]

Complement (formula provided for informational purposes only) – Total Payoff Amount 

($1,185.00) less Secretary‘s Share ($793.32), less GA Retention ($183.75), less Accrued 

Interest ($6.73), less Other Charges ($185.00) equals $16.20.

Outstanding Principal Balance

Accrued 

Interest

Other 

Charges

Total 

Payoff

Amount

Payoff Amount $993.27 $6.73 $185.00 $1,185.00

Secretary‘s Share $993.27 * 98% * 81.5% = $793.32

GA Retention $993.27 * 18.5% = $183.75

Complement

(for informational purposes 

only)

$1,185.00 – $793.32 – $183.75 – $6.73 –

$185.00 = $16.20

ITEM

NO. CATEGORY

AMOUNT DUE 

TO/(FROM) 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST

AMOUNT

OTHER 

AMOUNTS

MR-10 Rehabilitated Loan 

Refund

$793.32 $793.32

MR-10-A Rehabilitated Loans $183.75 $6.73 $185.00

MR-10-A Rehabilitated Loans - Interest

Enter the outstanding accrued interest balance of each borrower‘s account at the time the 

rehabilitated loan was sold to a lender. 

MR-10-A Rehabilitated Loans - Other Charges

Enter the outstanding other charges balance of each borrower‘s account at the time the 

rehabilitated loan was sold to a lender. Other charges include: late charges, collection costs, or 

attorney‘s fees.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 45 of 92

MR-11 FFEL Consolidation Refund 

This category is used to report Federal default consolidation loan refunds due to ED as a result of 

the sale of certain defaulted FFEL loans consolidated into a Federal Consolidation loan. 

Default consolidation loan sales to lenders must be reported to ED within 45 days of their 

occurrence. The refund amount due ED is the outstanding principal and accrued interest on the loan at 

the time of the sale to the lender less the guaranty agency‘s reinsurance complement. The outstanding 

principal and accrued interest does not include late charges, collection costs, or attorney‘s fees.

Effective October 1, 2006, guaranty agencies cannot charge the borrower collection costs in excess 

of 18.5 percent of the outstanding principal and interest on the defaulted loan at payoff and the guaranty 

agency must remit to the Secretary an amount equal to 8.5 percent of the outstanding principal and 

interest on the defaulted loan at payoff.

If reinsurance was paid on the loan by multiple reinsurance requests, and reinsurance was paid at 

different rates, the agency must prorate its default consolidation payment or pay ED at the highest 

reinsurance rate used.

MR-11 FFEL Consolidation Refund - Amount Due To/ (From) Guarantor

This is the amount due to ED for lender consolidation payments. The amount due to ED is the 

outstanding principal and accrued interest less the complement of the reinsurance percentage in 

effect for the reinsurance claims paid on the loans. 

MR-11, FFEL Consolidation Refund - Amount Due To/ (From) Guarantor is the sum of 

amounts reported in MR-11, Principal Amount, Interest Amount, and Other Amounts. This is a 

system-calculated field that does not allow guaranty agency input. 

MR-11 FFEL Consolidation Refund - Principal Amount

Enter the outstanding principal amount of consolidation payments received by the guaranty 

agency during the reporting period. Reduce these amounts by the complement of the reinsurance 

percentage in effect for the reinsurance claims paid on the loans.

MR-11 FFEL Consolidation Refund - Interest Amount

Enter the outstanding accrued interest amount of consolidation payments received by the 

guaranty agency during the reporting period. Reduce these amounts by the complement of the 

reinsurance percentage in effect for the reinsurance claims paid on the loans.

MR-11 FFEL Consolidation Refund – Other Amount

Enter the amount of collection costs remitted to the Secretary as a result of a defaulted FFEL 

Consolidation. Effective October 1, 2006, this amount should equal 8.5 percent of the 18.5 percent of 

the outstanding principal and interest on the loan at the time of payoff. If no collection costs are changed 

to the borrower the amount reported here would be zero, however, if any collection costs are charged to 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 46 of 92

the borrower, the Secretary is entitled to up to 8.5 percent, even if the collection costs are less than 18.5 

percent of the outstanding principal and interest on the loan.

MR-11-A FFEL Consolidation Payoff – Principal Amount

Enter the amount received from the lender at the time of payoff for the principal amount on 

the loan.

MR-11-A FFEL Consolidation Payoff – Interest Amount

Enter the amount received from the lender at the time of payoff for the accrued interest 

amount on the loan.

MR-11-B FFEL Consolidation GA Retention – Principal Amount

The amount reported in this line item should represent the reinsurance complement on a 

Consolidation Loan at the time of loan consolidation. Enter the amount of the reinsurance 

complement that is transferred to the agency‘s Federal Fund at the time of consolidation that 

represents the complement on the principal amount. 

MR-11-B FFEL Consolidation GA Retention - Interest Amount

The amount reported in this line item should represent the reinsurance complement on a 

loan at the time of loan consolidation. Enter the amount of the reinsurance complement that 

represents the complement on the accrued interest amount. This amount is also transferred to 

the agency‘s Federal Fund at the time of consolidation. 

MR-11-B FFEL Consolidation GA Retention - Other Amount

The amount reported in this line item should represent the GA‘s collection retention on a 

FFEL Consolidation loan. Enter the amount received from the lender at the time of payoff for 

the allowable collection cost that cannot exceed 18.5 percent of the outstanding principal and 

accrued interest on the loan at the time of payoff. Effective October 1, 2006, this amount is 

reduced to 10% and the guaranty agency is required to remit 8.5 percent to the Secretary. The 

Secretary‘s share of this collection should be reported in MR-11, FFEL Consolidation Refund, 

Other Amounts Column.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 47 of 92

Example: FFELP Loan Consolidation Reporting (Reinsurance Rate = 98%)

Payoff 

Amount

Outstanding 

Principal 

Outstanding 

Accrued Interest Other Charges

$30,000.00 $20,000.00 $10,000.00

X 98% X98%

$19,600.00 $9,800.00 $30,000.00

X18.5%

$5,550.00

ITEM

NO. CATEGORY

AMOUNT DUE

TO/FROM 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST

AMOUNT

OTHER 

AMOUNTS

MR-11 FFEL Consolidation Refund

$31,950.00

$19,600.00 $9,800.00 2,550.00

 MR-11-A FFEL Consolidation - Payoff $20,000.00 $10,000.00

 MR-11-B FFEL Consolidation - GA Retention $400.00 $200.00 3,000.00 

MR-12 GA Administrative Wage Garnishment 

This category reports on administrative wage garnishment collection activities by the guaranty agency 

on loans for which insurance claims have been paid to the lender and which have not been assigned to 

ED by the agency. This includes collections of default, exempt and lender-of-last-resort loan (default) 

claims on which the guaranty agency is entitled to retain a percentage of the amount collected to pay for 

its collection costs. A guaranty agency may not attempt to collect the following types of claims:

 bankruptcy (all Chapters)

 death and disability

 closed school

 false certification

GA Administrative Wage Garnishment collections on exempt claims are to be reported in this item. 

An exempt claim includes a loan on which the borrower defaulted after the lender determined that the 

borrower failed to establish eligibility for the loan. Collections on exempt claims are to be made in 

accordance with the instructions in Student Financial Assistance Programs bulletin 89-G-159 dated May 

1989.

All collections must be reported to ED within 45 days of the receipt of the collections by the 

guaranty agency or its agent, whichever is earlier. 

Amounts from collection checks returned for insufficient funds (bounced checks) are deducted prior 

to reporting collections to ED. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 48 of 92

MR-12 Administrative Wage Garnishment - Amount Due To/ (From) 

Guarantor 

This amount represents collections received through administrative wage garnishment 

collections by the guaranty agency on loans for which insurance claims have been paid to the 

lender and which have not been assigned to ED by the guaranty agency. 

Garnishment is the procedure requiring a borrower‘s employer to withhold a portion of a 

borrower‘s pay to repay the amount the borrower owes on a default or a lender-of-last-resort loan 

(default). A guaranty agency‘s garnishment procedures must comply with Section 488A of the 

HEA, appropriate regulations and policy bulletins.

Collections on bankruptcies are under the jurisdiction of Federal Bankruptcy Courts and take 

precedence over the administrative wage garnishment provisions of Section 488A. Administrative 

wage garnishment cannot be instituted on a borrower who has filed for bankruptcy. 

Administrative wage garnishment in effect at the time a borrower files for bankruptcy would have 

to cease if the Bankruptcy Court orders a halt to any collection activity against a borrower. Report 

collections ordered by the Bankruptcy Court in line item MR-14, Bankruptcy Collections.

Report in this line item the total of the ―Federal share of collections‖ associated with wage 

garnishment collections. This refers to that portion of collections that remain after the following 

has been deducted:

 an amount equal to the complement of the reinsurance percentage which was in 

effect when the reinsurance payment was made by the Secretary for default claims, 

and

 an amount equal to 30 percent of collections for both default and exempted claims to 

help the guaranty agency pay for the costs of its collection activities on collections 

received before October 1, 1993, or

 an amount equal to 27 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its 

collection activities on collections received on or after October 1, 1993 and received 

prior to October 1, 1998, or

 an amount equal to 24 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its 

collection activities on collections received on or after October 1, 1998 and prior to 

October 1, 2003, 

 an amount equal to 23 percent of collections for default, exempted and lender-oflast-resort loan (default) claims to help the guaranty agency pay for the cost of its 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 49 of 92

collection activities on collections received on or after October 1, 2003 and prior to 

October 1, 2007, or 

 an amount equal to 16 percent of collections for default, exempted and lender-oflast-resort loan (default) claims to help the guaranty agency pay for the cost of its 

collection activities on collections received on or after October 1, 2007.

A guaranty agency must calculate the amounts that are due to ED.

Calculate amounts based on the reinsurance reimbursement rate that was in effect at the time 

the guaranty agency was reimbursed. If a borrower account contains original claims and 

additional reinsurance that was paid at different rates, the agency must report its collections at 

either:

 the rate at which each individual item was paid, or

 the highest rate at which any item was paid.

Example: An agency receives a collection on a single borrower‘s account that includes 

two claims, one of which received reinsurance reimbursement at the 98 percent rate, and the 

other at the 80 percent rate. The agency may prorate the collection and report appropriate 

amounts at 98% reinsurance reimbursement and 80% reinsurance reimbursement. As an 

alternative to this, the guaranty agency may report the entire collection as 98% Reinsurance 

Reimbursement, because this was the highest rate at which one of the items in the account was 

reimbursed.

MR-12, GA Administrative Wage Garnishment, Amount Due To/ (From) Guarantor is the 

sum of amounts reported in MR-12, Principal Amount, Interest Amount and Other Amounts. 

This is a system-calculated field that does not allow guaranty agency input. 

Example #1

Wage Garnishment Collections (Reinsurance Reimbursement Rate = 95%) 

GA Received the Collection on October 10, 2002 (Collection Retention Rate – 24%)

Total 

Collected

Principal Interest Other Charges

$8,000.00 5,000.00 2,000.00 1,000.00

Secretary‘s 

Share

($5000 * .95) - ($5000 *. 24)

= $3,550.00

($2000 *. 95) - ($2000 *. 24) = 

$1,420.00

($1000 * .95) - ($1000 * .24) 

= $710.00

GA Retention $5000 * .24 = $1,200 $2000 * .24 = $480 $1000 *.24 = $240

ITEM

NO. 

CATEGORY

AMOUNT DUE 

TO/(FROM) 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST 

AMOUNT

OTHER 

AMOUNTS

MR-12 GA Administrative Wage Garnishment $ 5,680.00 $3,550.00 $1,420.00 $ 710.00

MR-12-A Administrative Wage Garnishment - Total Collected $5,000.00 $2,000.00 $1,000.00

MR-12-B Administrative Wage Garnishment - GA Retention $1,200.00 $ 480.00 $ 240.00
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 50 of 92

Example #2

Wage Garnishment Collections (Reinsurance Reimbursement Rate = 95%) 

GA Received the Collection on October 10, 2007 (Collection Retention Rate – 16%)

Total 

Collected

Principal Interest Other Charges

$10,000.00 7,000.00 2,000.00 1,000.00

Secretary‘s 

Share

($5000 * .95) - ($5000 *. 16)

= $5,530.00

($2000 *. 95) - ($2000 *.16) = 

$1,580.00

($1000 * .95) - ($1000 * .16) 

= $790.00

GA Retention $7000 *.16 = $1,120 $2000 * .16 = $320 $1000 *.16 = $160

ITEM

NO. 

CATEGORY

AMOUNT DUE 

TO/(FROM) 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST 

AMOUNT

OTHER 

AMOUNTS

MR-12 GA Administrative Wage Garnishment $ 7,900.00 $5,530.00 $1,580.00 $ 790.00

MR-12-A Administrative Wage Garnishment - Total Collected $7,000.00 $2,000.00 $1,000.00

MR-12-B Administrative Wage Garnishment - GA Retention $1,120.00 $ 320.00 $ 160.00

MR-12 Administrative Wage Garnishment – Principal Amount

Enter the principal amount due ED on the collection. To calculate the principal amount: (total 

collected and applied to principal) multiplied by (appropriate reinsurance rate) less (total collected 

and applied to principal) multiplied by (appropriate retention rate) equals Federal share of 

collections.

MR-12 Administrative Wage Garnishment – Interest Amount

Enter the accrued interest amount due ED on the collection. To calculate the accrued interest 

amount: (total collected and applied to accrued interest) multiplied by (appropriate reinsurance 

rate) less (total collected and applied to accrued interest) multiplied by (appropriate retention rate) 

equals Federal share of collections.

MR-12 Administrative Wage Garnishment – Other Amount

Enter the other charges amount due ED on the collection. To calculate the other charges 

amount: (total collected and applied to other charges) multiplied by (appropriate reinsurance rate) 

less (total collected and applied to other charges) multiplied by (appropriate retention rate) equals

Federal share of collections.

MR-12-A Administrative Wage Garnishment –Total Collected -

Principal 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents principal and purchased interest. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 51 of 92

MR-12-A Administrative Wage Garnishment –Total Collected - Interest 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents accrued interest. 

MR-12-A Administrative Wage Garnishment –Total Collected - Other 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents other charges. 

MR-12-B Administrative Wage Garnishment – GA Retention – Principal 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents principal that is retained by the guaranty agency. To calculate this 

amount: multiply the total principal amount by the applicable retention rate.

MR-12-B Administrative Wage Garnishment – GA Retention - Interest 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents accrued interest that is retained by the guaranty agency. To calculate this 

amount multiply the total accrued interest amount by the applicable retention rate. 

MR-12-B Administrative Wage Garnishment – GA Retention - Other 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents other charges that is retained by the guaranty agency. To calculate this 

amount multiply the total other charges amount by the applicable retention rate. 

MR-13 Default Collections

This category reports on default collections by the guaranty agency on loans for which insurance 

claims have been paid to the lender and which have not been assigned to ED by the agency. This 

includes collections of default, exempt and lender-of-last-resort loan (default) claims on which the 

guaranty agency is entitled to retain a percentage of the amount collected to pay for its collection costs.

A guaranty agency may not attempt to collect the following types of claims:

 bankruptcy (all Chapters)

 death and disability

 closed school

 false certification

Collections on exempt claims are to be reported in this item. An exempt claim includes a loan on 

which the borrower defaulted after the lender determined that the borrower failed to establish eligibility 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 52 of 92

for the loan. Collections on exempted claims are to be made in accordance with the instructions in 

Student Financial Assistance Programs bulletin 89-G-159 dated May 1989.All collections must be 

reported to ED within 45 days of the receipt of the collection by the guaranty agency or its agent, 

whichever is earlier. 

Amounts from collection checks returned for insufficient funds (bounced checks) are deducted prior 

to reporting collections to ED. 

MR-13 Default Collections - Amount Due To/ (From) Guarantor 

This item is used to report default collections received by the guaranty agency on loans for which 

insurance claims have been paid to the lender and which have not been assigned to ED by the 

guaranty agency. Report in this line item the total of the ―Federal share of collections‖ associated 

with collections. This refers to that portion of collections that remain after the following has been 

deducted:

 an amount equal to the complement of the reinsurance percentage which was in effect 

when the reinsurance payment was made by the Secretary for default claims and,

 an amount equal to 30 percent of collections for both default and exempted claims to 

help the guaranty agency pay for the costs of its collection activities on collections 

received before October 1, 1993, 

 an amount equal to 27 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its collection 

activities on collections received on or after October 1, 1993 and received prior to 

October 1, 1998.

 an amount equal to 24 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its collection 

activities on collections received on or after October 1, 1998 and received prior to 

October 1, 2003, 

 an amount equal to 23 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its collection 

activities on collections received on or after October 1, 2003 and received prior to 

October 1, 2007, or

 an amount equal to 16 percent of collections for default, exempted and lender-of-last 

resort loan (default) claims to help the guaranty agency pay for the cost of its collection 

activities on collections received on or after October 1, 2007.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 53 of 92

A guaranty agency must calculate the amounts that are due to ED.

Calculate the amounts based on the reinsurance reimbursement rate that was in effect at the time 

the guaranty agency was reimbursed. If a borrower account contains original claims and additional 

reinsurance that was paid at different rates, the agency must report its collections at either:

 the rate at which each individual item was paid, or

 the highest rate at which any item was paid.

Example #1 

Default Collections (Reinsurance Reimbursement Rate = 98%, 

Collections Received by GA on November 1, 2002 (Collection Retention Rate – 24%)

Total 

Collected

Principal Interest Other Charges

$38,000.00 15,000.00 12,000.00 11,000.00

Secretary‘s

 Share

($15000 *. 98) - ($15000 * 

.24)= $11,100

($12000 *. 98) - ($12000 * .24) 

= $8,880.00

($11000 * .98) - ($11000 * .24) 

= $8,140.00

GA Retention $15000 * .24 = $3,600 $12000 * .24 = $2880.00 $11000 * .24 = $2,640.00

ITEM

NO. CATEGORY

AMOUNT DUE 

TO/(FROM) 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST 

AMOUNT

OTHER 

AMOUNTS

MR-13 Default Collections $28,120.00 $11,100.00 $ 8,880.00 $ 8,140.00

MR-13-A Default Collections - Total Collected $15,000.00 $12,000.00 $11,000.00

MR-13-B Default Collections - GA Retention $ 3,600.00 $ 2,880.00 $ 2,640.00

Example #2 

Default Collections (Reinsurance Reimbursement Rate = 95%) 

GA Received the Collection on October 10, 2007 (Collection Retention Rate – 16%)

Total 

Collected

Principal Interest Other Charges

$38,000.00 15,000.00 12,000.00 11,000.00

Secretary‘s

 Share

($15000 *. 95) - ($15000 * 

.16)= $11,850

($12000 *. 95) - ($12000 * .16) 

= $9,480

($11000 * .95) - ($11000 * .16) 

= $8,690

GA Retention $15000 * .16 = $2,400 $12000 * .16 = $1,920 $11000 * .16 = $1,760

ITEM

NO. CATEGORY

AMOUNT DUE 

TO/(FROM) 

GUARANTOR

PRINCIPAL 

AMOUNT

INTEREST 

AMOUNT

OTHER

AMOUNTS

MR-13 Default Collections $30,020.00 $11,850.00 $ 9,480.00 $ 8,690.00

MR-13-A Default Collections - Total Collected $15,000.00 $12,000.00 $11,000.00

MR-13-B Default Collections - GA Retention $ 2,400.00 $ 1,920.00 $ 1,760.00
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 54 of 92

MR-13, Default Collections, Amount Due To/ (From) Guarantor is the sum of amounts reported in 

MR-13, Principal Amount, Interest Amount and Other Amounts. This is a system-calculated field 

that does not allow guaranty agency input. 

MR-13 Default Collections – Principal Amount

Enter the principal amount due ED on the collection. To calculate the principal amount: 

(total collected and applied to principal) multiplied by (appropriate reinsurance rate) less (total 

collected and applied to principal) multiplied by (appropriate retention rate) equals Federal share 

of collections.

MR-13 Default Collections – Interest Amount 

Enter the accrued interest amount due ED on the collection. To calculate the accrued interest 

amount: (total collected and applied to accrued interest) multiplied by (appropriate reinsurance 

rate) less (total collected and applied to accrued interest) multiplied by (appropriate retention 

rate) equals Federal share of collections.

MR-13 Default Collections – Other Amount 

Enter the other charges amount due ED on the collection. To calculate the other charges 

amount: (total collected and applied to other charges) multiplied by (appropriate reinsurance 

rate) less (total collected and applied to other charges) multiplied by (appropriate retention rate) 

equals Federal share of collections.

Other charges may include late charges, collection costs, and attorney‘s fees

MR-13-A Default Collections –Total Collected - Principal 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents principal and purchased interest. 

MR-13-A Default Collections –Total Collected - Interest 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents accrued interest. 

MR-13-A Default Collections –Total Collected - Other 

Enter the total amount of collections that were applied to the portion of each borrower‘s 

account that represents other charges. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 55 of 92

MR-13-B Default Collections – GA Retention - Principal 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents principal that is retained by the guaranty agency. To calculate this 

amount: multiply the total principal amount by the applicable retention rate.

MR-13-B Default Collections – GA Retention - Interest 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents accrued interest that is retained by the guaranty agency. To calculate 

this amount multiply the total accrued interest amount by the applicable retention rate.

MR-13-B Default Collections – GA Retention - Other 

Enter the total amount of collections that were applied to that portion of the borrower‘s 

account that represents other charges that is retained by the guaranty agency. To calculate this 

amount multiply the total other charges amount by the applicable retention rate.

MR-14 Bankruptcy Collections 

This category is used to report collections on bankruptcy claims. These collections must be reported 

to ED. The Secretary of Education is entitled to 100 percent of collections applied to principal, interest 

and other charges on these claims.

This line item includes collections on bankruptcies where:

 the loan was initially purchased from the lender as a bankruptcy claim or,

 the borrower filed for bankruptcy after a default claim was paid to the lender, the 

reinsurance claim was paid at only 98, 95, 90, 88, 85, 80, 78 or 75 percent of principal 

and interest, and the complement of the reinsurance was requested by the guaranty 

agency, and the guaranty agency reported the change in status to ED in MR-3, Status 

Changes, or

 the borrower filed for bankruptcy after a default claim was paid to the lender, the 

reinsurance claim was paid at 100 percent of principal and interest.

Collections are received on bankruptcy claims at the direction of the Bankruptcy Court. Collections 

may be received in increments while the loan is under the jurisdiction of the court. This is typical of 

proceedings in a Chapter 13 bankruptcy (a Wage Earner Plan). Collections may also be received as a 

lump sum in the distribution of assets at the conclusion of the bankruptcy proceedings.

When a guaranty agency receives a collection payment from the Bankruptcy Court it must report and 

return all of it to ED. Since a bankruptcy claim is always paid at the 100 percent reimbursement rate, 

there is no deduction for a complement of the reinsurance on a claim‘s collections. Also, a guaranty 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 56 of 92

agency may not retain any portion of bankruptcy collections to pay for collection costs. The 

guaranty agency can receive amounts for: 

 Principal,

 Purchased Interest (Lender Interest, Guaranty Agency Claim Interest And NonReinsured GA Interest),

 Accrued Interest, And

 Any collection charges permitted by law, regulation, or the borrower‘s promissory note.

MR-14 Bankruptcy Collections - Amount Due To/ (From) Guarantor

This amount represents the total amount of collections received by the guaranty agency and its 

agents from the Bankruptcy Court for the reporting period for reinsurance claims paid as bankruptcy 

claims. Included are amounts collected:

 while the loan was under the jurisdiction of the Bankruptcy Court, and 

 as a lump sum at the conclusion of the bankruptcy proceedings, even if the money was 

collected after the date the proceedings concluded.

MR-14, Bankruptcy Collections, Amount Due To/ (From) Guarantor is the sum of amounts 

reported in MR-14, Principal Amount, Interest Amount and Other Amounts. This is a systemcalculated field that does not allow guaranty agency input. 

MR-14 Bankruptcy Collections – Principal Amount

Enter the total amount of bankruptcy collections that were applied to the portion of each 

borrower‘s account that represents principal and purchased interest.

MR-14 Bankruptcy Collections – Interest Amount

Enter the total amount of bankruptcy collections that were applied to the portion of each 

borrower‘s account that represents accrued interest. 

MR-14 Bankruptcy Collections – Other Amount

Enter the total amount of bankruptcy collections that were applied to the portion of each 

borrower‘s account that represents other charges. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 57 of 92

MR-15 Default FFEL Consolidated by DL Fee – Amount Due To/ (From) 

Guarantor

This line item is used to report the Secretary‘s fee on defaulted Federal Family Education Loans 

consolidated by the William D. Ford Direct Loan Program. Guaranty agencies are required to remit to 

the Secretary a portion of the collection charge equal to 8.5 percent of the outstanding principal and 

interest on the loan. This fee is effective for defaulted loans consolidated on or after October 1, 2006. If 

no collection costs are charged, there is no fee due to the Secretary, however, if any collection costs are 

charged the Secretary is due up to 8.5 percent of the outstanding principal and interest on the loan. 

On and after October 1, 2009, a guaranty agency must remit the entire amount of the collection 

costs charged the borrower applicable to a defaulted loan that is paid off with excess consolidation 

proceeds. The term ―excess consolidation proceeds‖ is defined in the HEA, as, with respect to any 

guaranty agency for any Federal fiscal year beginning on or after October 1, 2009, the proceeds of 

consolidation loans received to pay defaulted Title IV loans for that agency that exceed 45 percent of the 

agency's total collections on defaulted loans in such Federal fiscal year. The excess consolidation 

proceeds should be reported on this line item. 

MR-16 Total

The sum of this item equals the sum of amounts reported in MR-1 through MR-15, Amount Due 

To/ (From) Guarantor. This is a system-calculated field that does not allow guaranty agency input. The 

total will be displayed as a positive number which represents the amount due to the guarantor or a 

negative number which represents the amount due ED. Amounts due ED from monthly processing 

could be offset by pending Account Maintenance Fee (AMF) or Loan Processing and Issuance Fee 

(LPIF) payments. For more detail see Chapter 1, Financial Processing Section. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 58 of 92

NON-PAYMENT ACTIVITY (Accounting Data) 

This section reports on guaranty agency monthly activities, which do not involve the receipt or the 

disbursement of funds between ED and a guaranty agency. This section includes reporting on the 

Treasury Offset Program (TOP) and Status Changes for non-payment activities. All amounts reported 

in this section (MR-17 through MR-23) can be positive or negative and must reflect activity that occurred 

within the reporting period.

Treasury Offset Program (TOP)

This category reports non-payment activity on accounts after Treasury Offset Program (TOP), 

(formerly called IRS offset), have occurred and non-payment information which is used to calculate the 

guaranty agency‘s Federal receivable balance.

The guaranty agency initiates action to collect on defaulted loan accounts by way of TOP offset. 

Collection of amounts owed on the defaulted loan is offset against the borrower‘s Federal income tax 

refunds. The U.S. Internal Revenue Service under the Treasury Offset Program (TOP) makes offsets. 

Only principal and interest is offset. All other charges must be collected directly by the guaranty agency 

or its agent. The guaranty agency and its agents can continue to receive collections from the borrowers‘ 

after the TOP procedures have been initiated. Collections received by the guaranty agency are reported 

in MR-13, Default Collections.

The agency begins the offset process in October of each year. The TOP begins offsetting income 

tax refunds the following January. Attempts to offset will continue until the earlier of:

 a borrower‘s Federal income tax refund is offset against the borrower‘s debt,

 the guaranty agency stops the TOP offset proceedings on the account, 

 12 months (January - December) have passed without a TOP offset occurring, or

 when the debt is paid in full.

The TOP charges a processing fee to carry out an offset. This amount can change each year. The 

processing fee is added to the amount owed on the account when ED sends the information to TOP for 

the agency. The processing fee is only charged if an offset occurs. The TOP deducts the fee before 

returning the amount collected to ED but it is included in the amount reported to ED.

Amounts collected under the TOP are reported to the guaranty agency. However, the funds 

themselves are transferred to ED. This form is used to reconcile TOP Offset transactions and provide 

the guaranty agency with any funds due under this process.

Since ED reimburses a guaranty agency for its losses on default claims, ED receives whatever is 

collected from borrowers through TOP offset. Collections received as a result of the TOP offset 

process are the federal government‘s collection, not the guaranty agencies. This section is also used to 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 59 of 92

report when the TOP unknowingly offsets a spouse‘s portion (injured spouse) of a joint income tax 

refund. No amounts are deducted for:

 the complement of the reinsurance percentage which was in effect when the reinsurance 

payment was made by the Secretary for default claims, or 

 the percent deducted from collections to help the guaranty agency pay for the cost of its 

collection activities.

ED uses the information reported in these items for reporting and accounting purposes. Though 

the TOP reports some summary level information directly to ED, an agency must provide the detailed 

information requested here in order for ED to carry out its responsibilities under law and regulation. 

TOP offset activities must be reported within 45 days after the guaranty agency receives notice of TOP 

offset from the Department of Treasury.

Principal Amounts Column

The total amount offset or refunded for this TOP offset activity that was applied to the portion 

of each borrower‘s account that represents principal and purchased interest. If the amount of the 

TOP offset results in the borrower overpaying the amount due on the borrower‘s account, then 

report that portion of the overpayment, which cannot be correctly charged to any category in this 

column.

Interest Amounts Column

The total amount offset or refunded for this TOP offset activity that is applied to the portion of 

each borrower‘s account that represents accrued interest.

Other Amounts Column

The total amount offset or refunded for this TOP offset activity that is applied to the portion of 

each borrower‘s account, which represents other charges. Other charges can include only TOP fees. 

This column is not applicable for reporting in MR-18, Non-Federal Share Offset.

MR-17 Treasury Offset

Enter the amounts offset against defaulted borrower‘s Federal income tax funds by the U.S.

Internal Revenue Service under the Treasury Offset Program. The amount offset is used to 

reduce each borrower‘s FFEL Program loan indebtedness. Report all TOP offsets in this item, 

even if it results in the borrower‘s overpaying the amount due in the account. The overpayment 

is corrected by refunding the appropriate amount to the borrower and reporting this in item 

MR-4, TOP Overpayments.

MR-18 Non-Federal Share Offset

Enter the amount of the non-Federal share offset. The non-Federal share offset is the 

portion of the TOP offset, which is an amount equal to the complement of the reinsurance 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 60 of 92

percentage, which was in effect when the Secretary made the reinsurance payment for default

claims.

The Other Amounts Column should not be used for this line item since any TOP fees 

should be reported on line item MR-4, MR-17, and MR-19, as appropriate. TOP fees are not 

applicable to the Non-Federal Share Offset.

MR-19 Treasury Offset Reversals

Enter the amount of Treasury offset reversals. A Treasury offset reversal (formerly injured 

spouse claim) is the portion of the TOP offset made against that portion of a Federal income tax 

refund which is attributable to the spouse of the defaulted borrower when a joint income tax 

return is filed.

The spouse files a claim for this portion with the TOP. The TOP refunds the amount 

directly to the spouse, and informs the guaranty agency, which then increases the defaulted 

borrower‘s account balance by the amount of the refund.

Status Changes - Account Balance at Conversion 

This category reports on guaranty agency activities, which do not involve the receipt or disbursement 

of funds between ED and a guaranty agency. ED needs this information for accounting and other 

reporting purposes. This category also includes the account balance at conversion for any additional 

amounts requested in MR-3, Status Changes.

This category is used to report on reinsurance default and lender-of-last-resort loan (default) claims 

paid at 100 percent whose status changed to another claim category. This section is also used to report 

change of status for bankruptcies that are not discharged and returned to default or lender-of-last-resort 

loan (default) claim status when originally repurchased as a default.

A guaranty agency must report this information to ED when a defaulted borrower:

 dies,

 becomes totally and permanently disabled,

 files for bankruptcy,

 has a loan discharged due to school closure, or

 has a loan discharged due to false certification by the school.

A change in status of a default claim paid at 100 percent has no effect on the amount of reinsurance 

paid on the claim however the status change must be reported in this section.

Change of status for default claims paid at less than 100 percent are reported in MR-3, Status 

Changes for reimbursement of the complement. A guaranty agency is entitled to additional reinsurance 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 61 of 92

due to such a change. In addition, the account balance at conversion for these additional reinsurance 

requests should be reported in this category, MR-20 through MR-22.

Account Balance at Conversion – Principal Amounts Column

The balance for the amount of principal and purchased interest paid to the lender for the default 

or lender-of-last-resort loan (default) claim which is still outstanding (that is, collections have not 

been received from the borrower on it) at the time this non-payment activity report is submitted to 

ED, for each type of claim for the reporting period.

Do not include amounts paid to lenders for other items such as accrued interest, late charges, 

collection costs, and attorney‘s fees in this column.

Account Balance At Conversion - Interest Amounts Column

The balance for the amount of accrued interest, which is still outstanding (that is, collections 

have not been received from the borrower on it) at the time this non-payment activity report is 

submitted to ED, for each type of claim for the reporting period.

Account Balance At Conversion - Other Amounts Column

The balance for the amount of other charges which are still outstanding (that is, collections have 

not been received from the borrower on it) at the time this non-payment activity report is submitted 

to ED, for each type of claim for the reporting period. This includes amounts for: late charges, collection costs, and attorney‘s fees.

MR-20 Default/LLR to Death and Disability

Enter the amounts for default and lender-of-last-resort loan (default) claims being reported 

due to a change in status to death or disability. A death claim is one on which the loan is cancelled due to the borrower‘s death. This includes a Federal PLUS loan death claim paid to a lender 

when a student, on whose behalf a parent received the Federal PLUS loan, dies. A disability 

claim is one on which the loan is conditionally discharged due to the total and permanent disability of the borrower and the loan is assigned to ED. Also include exempt claims being reported 

due to a change in status to death or disability. 

MR-21 Default/LLR to Closed School/False Certification

Enter the amounts for default and lender-of-last-resort loan (default) claims being reported 

due to the change in status to a closed school or false certification claim. A closed school claim is 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 62 of 92

 one on which a claim is paid to a lender because the student was unable to complete the 

program in which the student was enrolled due to the closure of the institution. A false certification claim is one on which a claim is paid to a lender because the student‘s eligibility to borrow 

under the FFEL Program was falsely certified by an eligible institution of higher education. Also 

include exempt claims being reported due to a change in status to closed school or false 

certification claim. 

MR-22 Default/LLR to Bankruptcy 

Enter the amounts for default and lender-of-last-resort loan (default) claims being reported 

due to the change in status of the default claim to a Chapter 7, 11, 12 or 13 Bankruptcy due to 

the Borrower filing for bankruptcy. During the course of the bankruptcy proceedings, the 

agency must report and return to ED any amounts paid at the direction of the Bankruptcy Court 

on MR-14, Bankruptcy Collections. Also include exempt claims being reported due to a change 

in status of the default claim to a Chapter 7, 11, 12 or 13 Bankruptcy. 

MR-23 Bankruptcy to Default/LLR

Enter the amounts for Chapter 7, 11, 12 and 13 bankruptcies that are not discharged and 

return to default or lender-of-last-resort loan (default) claim status. If the bankruptcy 

proceedings are concluded and the loan is not discharged, then the agency must refund to ED 

any additional bankruptcy reinsurance payment received and report it on MR-9, Overstated 

Claims and return the loan to its original reinsurance rate. The guaranty agency would continue 

to hold the loan and attempt to collect on it like any other default or lender-of-last-resort loan 

(default) claim. However, the change in status must also be reported in this Section. Also 

include exempt claims being reported due to a change in status of the default claim to a Chapter 

7, 11, 12 or 13 bankruptcy that are not discharged and return to default or lender or lender-oflast resort loan (default) claim status. 

Agency Accruals (Accounting Entries)

This Section reports on amounts owed to ED on accounts held by the guaranty agency, including an 

estimate of the age of these amounts. ED uses this information in conjunction with guaranty agency 

monthly/quarterly reporting, to calculate guaranty agency‘s Federal receivable balances. The Federal 

receivable balance outstanding includes amounts for default, exempt and default lender-of-last-resort 

claims, accrued interest and other charges, on which reinsurance has been requested by or paid to the 

guaranty agency based upon the account‘s reinsurance percentage rate of 100, 98,95,90,88,85,80,78, or 

75.

Example: Borrower loan balance to include Principal, interest and other charges x (times) the 

reinsurance applicable loan percentage rate; i.e.

Correct Method Example: Loan balance (amount paid to lender) $100.00 ($100.00 x 95%) = $ 

95.00 Federal Receivable. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 63 of 92

Do not include in the calculation the lender insurance percentage rate; i.e., $100.00 x 98% x 95%. 

This method will create the GA reimbursement amount or reimbursement percentage rate and when 

combined with the complement amount creates a non-reported shortage; i.e.

Incorrect Method Example:

Borrower balance $100.00 * 98% * 95% $ 93.10

Complement amount ($100%-95%) * $100.00 5.00

GA Reimbursed amount plus complement 98.10

Non-reported 

 Shortage in Federal Receivable calculation 1.90

 Original borrower balance $ 100.00

This information is also needed in order to adjust ED‘s financial records and comply with federal 

government financial reporting requirements. This reporting only concerns FFEL program loans, on

which claims have been paid to lenders and reinsurance has been requested or paid to the guaranty 

agency. GA‘s are required to submit this section monthly. All amounts reported in this section (MR-24 

through MR-26) can be positive or negative.

Amounts reported on line items MR-24 through MR-26, Agency Accruals, represents the guaranty 

activity for the current reporting period, (e.g., monthly).

Principal Amounts Column

The total amount of principal and purchased interest activity for the reporting period, based 

upon the account‘s applicable reinsurance percentage (amount paid by ED). Principal includes all 

purchased interest because purchased interest must be capitalized by the guaranty agency. This 

column is not applicable for reporting on MR-26, Agency Accruals.

Interest Amounts Column

The total amount of accrued interest calculated by the guaranty agency on the loan principal of a 

claim for collection from the borrower during the period being reported based upon the account‘s 

applicable reinsurance percentage rate (amount paid by ED).

Other Amounts Column

The total amount of fees, penalties, collection charges and any other charges based upon the 

account‘s applicable reinsurance percentage rate (amount paid by ED) that has accrued for any loan 

for the reporting period. 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 64 of 92

MR-24 Collection Terminations

Enter the dollar amount of the portion of federal receivable balances (i.e. loan principal, 

accrued interest, and other charges) on which the agency has decided to terminate collection 

activities and not to make any further attempt to collect the amount due (i.e., loans with small 

balances, less than $100.00). All collection terminations must meet standards approved by ED. 

MR-25 Compromises

Enter the dollar amount of the portion of the federal receivable on which the agency has 

reached a compromise agreement with the debtor. Compromise refers to a negotiated agreement 

between the debtor and the guaranty agency to accept a payment of a lesser portion of the total 

debt as full liquidation of the entire indebtedness. Guaranty agencies are permitted in certain 

cases to accept a compromise amount from a debtor as full satisfaction of the debt to all parties 

(reference Dear Agency Director Notice dated January 21, 1994).

MR-26 Agency’s Accruals

Enter the amount of periodic interest accrued on loan principal for the current reporting 

period of the agency (e.g. month). Include interest that is accrued and also collected in the same 

period. Also report amounts of additional other charges (e.g., collection costs) added to the 

borrowers‘ accounts during the current reporting period. Include all accrued amounts deemed 

collectible to which the Secretary is entitled to an equitable share.
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GUARANTY AGENCY 

FINANCIAL REPORT 

MONTHLY/QUARTERLY

Chapter

2

This Section reports on amounts owed to ED on accounts held by the guaranty agency, 

including an estimate of the age of these amounts. ED uses this information in conjunction with 

guaranty agency monthly payment reporting, to calculate guaranty agency‘s Federal receivable 

balances. This information is also needed in order to adjust ED‘s financial records and comply 

with federal government financial reporting requirements. This reporting only concerns FFEL 

program loans, on which claims have been paid to lenders and reinsurance has been requested or 

paid to the guaranty agency. GA‘s are required to submit this section monthly. All amounts 

reported in this section (MR-27 through MR-42) can be positive or negative.

Agency Accruals (Information)

ED uses line items MR-27 through MR-31 in conjunction with guaranty agency monthly 

payment reporting, to calculate the guaranty agency‘s Federal receivable balance. The Federal 

receivable balance outstanding includes amounts for default, exempt and default lender-of-lastresort claims, accrued interest and other charges, on which reinsurance has been requested by or 

paid to the guaranty agency based upon the account‘s reinsurance percentage rate of 100, 

98,95,90,88,85,80,78, or 75.

Example: Borrower loan balance to include Principal, interest and other charges x (times) 

the reinsurance applicable loan percentage rate; i.e.

Correct Method Example: Loan balance (amount paid to lender) $1,000.00 ($1,000.00 x 

95%) = $ 950.00 Federal Receivable. 

Amounts reported on line items MR-27 through MR-31, Agency Accruals, represents the 

guaranty agency activity for the current reporting period. (e.g. monthly).

Enter all dollar amounts (positive and negative) to the nearest cent, and include decimal point. 

Principal Amounts Column

The total amount of principal and purchased interest activity for the reporting period, 

based upon the account‘s applicable reinsurance percentage (amount paid by ED). Principal 

includes all purchased interest because purchased interest must be capitalized by the guaranty 

agency.
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Interest Amounts Column

The total amount of accrued interest calculated by the guaranty agency on the loan 

principal of a claim for collection from the borrower during the period being reported based 

upon the account‘s applicable reinsurance percentage rate (amount paid by ED).

Other Amounts Column

The total amount of fees, penalties, collection charges and any other charges based upon 

the account‘s applicable reinsurance percentage rate (amount paid by ED) that has accrued for 

any loan for the reporting period. No reporting is required in the Other Amounts column for line item 

MR-32 Ending Balance on Defaulted Loans.

MR-27 Default FFELP Loans Consolidated By Direct Loan 

Program

Enter the federal receivable amounts of Federal Family Education Loan Program 

loans, which were consolidated in the William D. Ford Direct Loan Program during the 

period being reported.

MR-28 Subrogated Loans 

Enter the federal receivable dollar amount for subrogated loans (permanent 

assignments to ED). Report only on subrogated loans that are accepted by the Debt 

Collection Service during the reporting period. 

MR-29 Default Loans Transferred Out

Enter the net dollar amount of federal receivables transferred to another guaranty 

agency during the reporting period. Report only those accounts that have been accepted by 

another guaranty agency during the period being reported. Do not include loan guarantees, 

loans in repayment or loans where the status is, or has changed to death, disability, 

bankruptcy, closed school, false certification, settled loans or loans written-off. 

MR-30 Default Loans Transferred In

Enter the net dollar amount for all federal receivables transferred to the agency from 

another guaranty agency during the reporting period. Do not include loan guarantees, loans 

in repayment or loans where the status is, or has changed to death, disability, bankruptcy, 

closed school or false certification.

MR-31 Other Transactions Affecting Federal Receivable

Enter the net dollar amount affecting the federal receivable that is not reported 

elsewhere on this report. Include balances (total balance due) of $25.00 or less that do not 
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meet the requirements for MR-24, Collection Terminations or MR-25, Compromises. Any 

amounts reported in MR-31 must be accompanied by details (in the GA Comment section 

of the GAFR) to support the entry (i.e., reference to line item(s) and applicable amount(s). 

Details reported in the GA Comment section should support the total amount reported in 

MR-31. Positive amounts represent a decrease in the federal receivable balance and 

negative amounts represent an increase in the federal receivable balance.

Until the Guaranty Agency Financial Report (GAFR) is revised, use this line item to 

report the federal receivable portion of unpaid refund discharges, teacher loan forgiveness 

discharges, and Consolidation loan partial discharges on guaranty agency held loans. Also 

use this line item to report rehabilitation loan assignments to the Department under the 

Rehabilitation Loan Purchase Program.

Use the GA Comment section of this report to identify all line item adjustments with 

corresponding amounts in addition to unpaid refund discharges, teacher loan forgiveness 

discharges, and rehabilitated loan assignments. Please indicate for each transaction whether 

the transaction is an increase or decrease to the federal receivable balance.

Example: A guaranty agency has two requests for discharges on loans they hold:

Borrower Amount

Reinsurance 

Reimbursement

Federal Receivable

#1 $ 1,000,00 1000*98% $980.00

#2 500.00 500*95% $475.00

Subtotal 1,455.00

The amount entered in MR-31, Other Transactions Affecting 

Federal Receivable, Principal Amount is $1,455.00.

MR-32 Ending Balance of Defaulted Loans

This dollar amount reflects the agency‘s total outstanding federal receivable on the 

accrual basis at month end. The sum of MR-33 through MR-40, Delinquency by Debt 

category should equal total principal and interest reported in this line item. 

In addition the Department of Education (ED) uses guaranty agency reporting to 

establish the federal receivable and check for reasonability. Below is the methodology that 

should serve as a guide for reporting the Federal Receivable Balance on Line Item MR-32, 

Ending Balance on Defaulted Loans.

Instructions: Start with the preceding periods ending balance as the beginning Federal 

Receivable Balance (MR-32, Ending Balance on Defaulted Loans). From that balance add and 

subtract the current period activity to arrive at the Federal Receivable Balance at the end of the 

period. Then compare the period calculated federal receivable balance with the period‘s ending 

balance as reported on MR-32 Ending Balance on Defaulted Loans. Check for reasonability.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

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(+) The preceding periods ending Federal Receivable Balance as reported on MR-32, Ending 

Balance on Defaulted Loans.

(+) Additions to the Federal Receivable Balance:

Claims Paid (Principal)

MR-1-A, Defaults 

MR-1-B, Exempt and Lender of Last Resort

Activity on Accounts and Non-Payment Activity (Principal and Interest)

MR-4, TOP Overpayments

MR-18, Non-Federal Share Offset

MR-19, Treasury Offset Reversals

MR-23, Bankruptcy to Default/Lender of Last Resort

Status Changes (Principal and Interest)

MR-3-A, Death/Disability

MR-3-B, Closed School/False Certification

MR-3-C, Bankruptcy

Agency Accruals (Principal and Interest)

MR-26, Agency‘s Accruals 

MR-30, Default Loans Transferred In

(-) Decreases to the Federal Receivable Balance

CFY and PFY Repurchases (Principal)

MR-5-A, MR-6-A, Defaults

MR-5-B, MR-6-B, Exempt/Lender of Last Resort

CFY and PFY Partial Refunds (Principal)

MR-7-A, MR-8-A, Defaults

MR-7-B, MR-8-B, Exempt/Lender of Last Resort

 Overstated Claims (Principal)

MR-9-A, Defaults

MR-9-B, Exempt/Lender of Last Resort

Payments to ED for Rehabilitated Loans, FFEL Consolidation refunds and collections 

on defaulted loans:

MR-10, Rehabilitated Loan Refund (Principal Amount)

MR-10-A, Rehabilitated Loans (Principal and Interest Amounts)

MR-11, FFEL Consolidation Refund (Principal and Interest Amounts)

MR-12, Administrative Wage Garnishment (Principal and Interest) 

Mr-12-B, Administrative Wage Garnishment – GA Retention (Principal and 

Interest)

MR-13, Default Collections (Principal and Interest)

MR-13-B, Default Collections – GA Retention (Principal and Interest)

Non-Payment Activity (Principal and Interest)

 MR-17, Treasury Offset

 MR-20, Default/Lender of Last Resort to Death/Disability

MR-21, Default/Lender of Last Resort to Closed School/False Certification

MR-22, Default/Lender of Last Resort to Bankruptcy

MR-24, Collection Terminations

MR-25, Compromises
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MR-27, Default FFEL Consolidated by Direct Loan Program

MR-28, Subrogated Loans

MR-29, Default Loans Transferred Out

(+/-) Increase or Decrease to the Federal Receivable Balance

MR-31, Other Transactions Affecting Federal Receivable

(=) Ending Federal Receivable Balance. The sum of the amounts shown above is used to 

derive an ending receivable balance at period end. This Federal Receivable Balance 

amount is compared to the Federal Receivable Balance as reported on the GAFR, Line 

Item MR-32 at period end. MR-32, Ending Balance on Defaulted Loans should also be 

the total of MR-33 through MR-40, Delinquency by Debt Section. 

Delinquency by Debt 

These line items report amounts owed to ED on accounts held by the guaranty agency at 

month end, including an estimate of the age of these amounts. This information is needed in order 

to adjust ED‘s financial records and to comply with federal government financial reporting 

requirements. On these line items only report FFEL Program loans on which claims have been 

paid to lenders and reinsurance has been requested by or paid to the guaranty agency. Report only 

on accounts held by the guaranty agency on borrowers‘ loans, whether or not the guaranty agency 

has a repayment schedule with the borrower. 

Amounts reported on line items MR-32 through MR-40, Delinquency by Debt, represent the 

agency‘s outstanding federal receivable balance at the end of the reporting period based upon the 

account‘s applicable reinsurance percentage rate. These amounts are cumulative from the inception 

of the FFEL program. Include all loans since the beginning of the agency‘s FFEL Program 

participation on which default, exempted and default lender-of-last-resort claims have been paid 

and on which a balance is outstanding.

Claims permanently assigned to ED are not to be reported in this section because the agency 

no longer holds the account.

Do not include amounts for repurchased, rehabilitated loans, defaulted loans consolidated 

under FFEL Program or defaulted loans consolidated under the Federal Direct Loan Program. 

Also do not include loans for the following types of claims: bankruptcy, death and disability and 

closed school or false certification.

When reporting an outstanding balance, which is owed to ED, include only that portion of an 

account that is based upon the applicable reinsurance reimbursement rate. Though the guaranty 

agency may estimate the outstanding balance for each aging category, the sum of the amounts 

reported must accurately reflect the total Federal Receivable at the agency.

MR-33 Not Delinquent

If a borrower complies with a repayment schedule, then the account is reported as not 

delinquent. An account is also reported in this line item if the first scheduled payment is not 
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due by the last day of the month covered by this report.

MR-34 (1 – 90 Days)

through

MR-40 Over 10 Years

Enter the outstanding dollar amount for the number of days that the borrower is 

delinquent: 

 On the repayment schedule established by the lender before the guaranty agency‘s 

payment of the lender‘s claim, or 

 An amount for accounts that has been scheduled or rescheduled under a 

repayment agreement, but the borrower is not meeting the repayment agreement. 

The first day of delinquency is the day after the due date of the first missed scheduled or 

rescheduled payment not later made. 

Since a claim is usually not paid to a lender until after—

 180 days of delinquency for loans delinquent before 10/7/98, and 

 270 days for loans delinquent on or after 10/7/98,

The sum of MR-33 through MR-40 should equal MR-32, Ending Balance on Defaulted 

Loans on the accrual basis.

Bankruptcy Reporting

MR-41 Ending Balance on Bankruptcies

Line item MR-41, Ending Balance on Bankruptcies, represents the outstanding bankruptcy 

balance at the end of the period being reported and amount is not reduced by any reinsurance 

rate but reported at 100% of balance. This amount is cumulative from the inception of the 

FFEL program. Enter the dollar amount that reflects the agency‘s total outstanding federal 

balance for bankruptcies (at 100% rate) on the accrual basis at the end of the period being 

reported. 

MR-42 Bankruptcies Transferred Out

Line item MR-42, Bankruptcies Transferred Out, represents the activity for the current 

reporting period (report at 100% of balance). 

Enter the dollar amount that reflects principal, interest and other charges associated with 

bankruptcy accounts transferred to another guaranty agency at 100% rate for the period being 

reported (for example bankruptcy transfers to the Educational Credit Management 

Corporation (ECMC) or to ED.
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GUARANTY AGENCY 

FINANCIAL REPORT 

ANNUAL

Chapter

3

The Annual Report (AR) provides the Department with information on the guaranty agency‘s 

activities concerning loan guarantees, claims paid to lenders and the agency‘s financial activities, 

including activities concerning its Federal Fund, and the agency‘s Operating Fund. Guaranty 

agency reporting on the restricted account is no longer required. Information in this section must 

reflect activity under all FFEL programs (Federal Stafford, PLUS Loans, Federal SLS, Federal 

Consolidation and Unsubsidized Stafford Loans for Middle-Income Borrowers) in, or as of the end

of, the federal fiscal year. The Annual Report must be submitted to ED no later than 60 days after 

the end of the federal fiscal year (September 30th).

Amounts reported in the Federal Fund and Operating Fund reflects the annual uniform 

financial projections for guaranty agencies. Data collected will also provide the Department a basis 

for—

 financial reviews, 

 evaluating the current and projected financial status of guaranty agencies, 

 projecting the impact of changes in revenue, and 

 managing guaranty agency federal funds held by the agency. 

The guaranty agency‘s books of account must support all amounts reported. The amounts 

reported in this report must be on an accrual basis for, or through, the end of the federal fiscal year. 

This must be done regardless of the agency‘s method and period of accounting used for its annual 

audited financial statements and other financial reports. All amounts reported in this section for 

Current Fiscal Year (AR-15 through MR-57) can be positive or negative.

During previous fiscal years several guaranty agencies merged and more agencies may merge or 

otherwise change structure in the future. In order to maintain a reasonable database with respect to 

the last quarter of operation of an agency, an AR must be completed and submitted to ED by the 

merging and succeeding guarantor. If a merger occurs, the merging and successor guaranty agencies 

must coordinate to ensure that amounts are not double counted on the Annual Report.

The merging guaranty agency should report on all Annual Report line items, as appropriate, and 

according to the instructions. 
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The gaining guaranty agency should report on AR-6, Loans Transferred In; and the Federal 

Fund balance from the merging guarantor received in AR-20, Federal Fund Other Revenues

After a guaranty agency‘s Annual Report passes all edits and is accepted by ED, it is still 

possible that an error may be discovered and an adjustment will be needed. ED defines an 

adjustment as a change to an agency‘s annual report after acceptance. Guaranty agencies are 

able to submit amended Annual Reports via the GAFR web application only. 

NOTE: No amended annual reports should be entered into the Financial Management web 

application prior to FSA‘s review and acceptance of the proposed amendment. Proposed 

amendments that affect the prior fiscal year‘s Federal Fund balance will not be accepted in the 

current fiscal year. These adjustments will have to be made in the next fiscal year. Proposed 

amendments that do not affect the Federal Fund balance and are accepted by FSA may be 

entered into the Financial Management web application in the current fiscal year. 

Enter all dollar amounts to the nearest dollar. Do not include decimal points and cents. ED 

always assumes that the last digit in the dollar amount field represents dollars, not cents.

The GAFR Annual Report must be completed and submitted for a federal fiscal year of activity 

after the end of that federal fiscal year and must be received by ED within 60 days after the end of 

the fiscal year. Enter the Guaranty Agency Code, the Guaranty Agency State Name, and the 

Federal Fiscal Year Ending date. Enter the date as MM/CCYY.

Loans in Repayment

This section shows the agency‘s activities concerning loan guarantees and claims paid to 

lenders. Report on all loans originally guaranteed by the agency under the FFEL Program, even if 

these loans were later canceled or later lost their insurance or reinsurance.

All amounts reported in AR-1 through AR-12 are cumulative since the beginning of the 

agency‘s participation in the FFEL Program. Line Items AR-13 and AR-14 should reflect point in 

time end-of-fiscal year status. 

Information submitted in this section should be consistent with and comparable to relevant 

information reported to the National Student Loan Data Systems (NSLDS).

AR- 1 Loans Guaranteed (Except Federal Consolidation)

Enter the original principal guaranteed dollar amount of all loans guaranteed. Do not 

reduce by any cancellation. Do not include amounts of loan guarantees transferred in from 

another guaranty agency in this item.

AR- 2 All Loans Canceled (Except Federal Consolidation)

Enter the original principal amount of loans canceled before first disbursement, loans 

disbursed where the lender‘s check is returned uncashed, the lender‘s check remains uncashed 
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120 days after disbursement, the electronic funds transfer (EFT) is not completed, or the 

amount of the loan disbursed by EFT is returned within 120 days of the transfer. School 

refunds are not to be reported in this line item.

If:

 an amount is returned to the lender within 120 days after the lender‘s check is 

cashed or the EFT is completed, treat it as a cancellation; 

 a loan has multiple disbursements, and part is canceled under these conditions, and 

the rest is never disbursed, include the cancelled part of the loan amount in this 

item (the amount never disbursed); and

 only part of a loan is canceled under these conditions, include that part of the loan 

amount here. 

AR- 3 Federal Consolidation Loans Guaranteed

Enter the original principal dollar amount of federal consolidation loans guaranteed before 

any cancellation. Include any interest capitalized by the lender in this item. Also include the 

borrower interest due on the underlying loans at the time they are consolidated. Do not 

include amounts of loan guarantees transferred in from another guaranty agency in this item. 

AR- 4 Federal Consolidation All Loans Canceled

Enter the original principal amount of federal consolidated loans canceled before first 

disbursement; loans disbursed where the lender‘s check is returned uncashed; the lender‘s 

check remains uncashed 120 days after disbursement; the electronic funds transfer (EFT) is 

not completed; or the amount of the loan disbursed by EFT is returned within 120 days of the 

transfer.

AR- 5 Uninsured Loans

Enter the original principal amount of loans, which have lost insurance and are not eligible 

for cure under ED regulations. When loan losses insurance it means the guaranty agency will 

not pay a claim to a lender, or if it did, the lender refunded the claim amount. Any loan, which 

loses insurance also, loses eligibility for reinsurance.

Do not include any loan amounts, which were canceled in this item, whether the amount 

was canceled before or after disbursement. A canceled loan is not considered to be uninsured 

as these terms are used in the annual report.

AR- 6 Loans Transferred In

Enter the original principal amount, net of cancellations prior to or subsequent to the date 

of transfer, of all loan guarantees transferred to this agency from other guaranty agencies (prior 

to default). Include voluntary and involuntary transfers. A voluntary transfer is at the request 

of a borrower, lender or guaranty agency to the agencies involved prior to any claim submittal 

to maintain the borrower records with one agency. An involuntary transfer, often referred to 
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Revised: June 2011 Page 74 of 92

as the ―Secretary‘s Plan‖ is a transfer directed or requested by the Secretary of Education. The 

Secretary‘s Plan protects the interest of the FFEL Program when a guaranty agency faces 

insolvency or otherwise may not be able to carry out its program responsibilities. 

AR- 7 Loans Transferred Out

Enter the original principal amount, net of cancellations prior to date of transfer, of all 

FFEL loan guarantees transferred to another guaranty agency (prior to default). Include loan 

guarantees transferred to the Department under the Loan Purchase Programs, as authorized in 

legislation titled ―Ensuring Continued Access to Student Loans Act of 2008.‖ Reduce this line 

item to reflect the transfer of loans from the Department back to the guaranty agency where a 

loan was originally sold in error under the Loan Purchase Program. Entries must be reported 

as positive numbers.

AR- 8 Default Claims Paid

Enter the amount paid to lenders for default, exempt (include claims where the student 

has been convicted of, or plead nolo contendere to, a crime involving fraud in obtaining title 

IV student aid and claims where the borrower is a victim of identity theft) and default lenderof-last-resort loans. A default claim is one on which the borrower failed to make an installment 

payment when due as defined in regulations.

Regardless of whether the effective date of the borrower payment, received from a lender 

and forwarded to the guaranty agency for the loan, is before or after an insurance claim was 

paid, treat the payment as a refund and subtract the amount of refunded principal from this 

amount. . Borrower payments received by the lender and forwarded to the guaranty agency, 

whether before or after claim payment or receipt of reinsurance, are not subject to collection 

retention and should be reported here. 

School refunds received before reinsurance claim filing should be deducted from the claim 

request amount and school refunds received after reinsurance filing should be treated as a 

refund of reinsurance and deducted from amounts reported in this item.

If a lender repurchases (full refund of reinsurance) a loan previously paid as a default, by 

the agency, subtract the principal amount that was repurchased by the lender. 

If a loan is rehabilitated subtract the amount of outstanding principal on the loan at the 

time the loan is rehabilitated. If a defaulted FFEL loan is consolidated under a FFEL 

Consolidation loan do not subtract the amount of outstanding principal. 

If a defaulted FFEL loan is consolidated under a Federal Direct Consolidation Loan, do 

not subtract any amount from this item. 

Claims, which lose insurance, must also be deducted from this amount. If ED has paid a 

default reinsurance claim to the guaranty agency in such a situation, then the claim amount 

must be reported and refunded to ED using the monthly report.
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If the loan loses reinsurance, but not insurance, then leave this amount unchanged.

AR- 9 Bankruptcy Claims Paid

Enter the amount of principal paid to lenders for all types of bankruptcy claims (including 

Chapters 7, 11, 12 and 13). 

If the agency receives a payment from a lender for the loan after a bankruptcy insurance 

claim was paid, treat the payment as a refund and subtract the amount of refunded lender 

principal from this amount. However, if the agency receives a payment at the direction of the 

Bankruptcy Court during the course of the bankruptcy proceedings, then treat it as a collection 

and report it on the monthly report.

If the Bankruptcy Court does not discharge the loan, then the guaranty agency must 

arrange for a lender to repurchase it. Subtract the amount of repurchased principal from this 

amount. If ED has paid a bankruptcy reinsurance claim to the guaranty agency on the loan, 

then the reinsurance claim amount must be reported and refunded to ED, within 45 days, on 

the monthly report.

If the borrower subsequently defaults after the repurchase, then treat the loan like any 

other default and report the amount in items AR-8, Default Claims Paid-Amount. A guaranty 

agency may also file with ED for default reinsurance on the loan using monthly report.

Do not include in this item claims paid as defaults where the borrower files for bankruptcy 

after the default claim was paid. Report such default claims in item AR-8, Default Claims 

Paid-Amount.

AR-10 Death and Disability Claims Paid

Enter the amount of principal paid to lenders for death, and for total and permanently 

disability claims. A death claim is one on which the loan is canceled due to the death of the 

borrower or a dependent student. This includes a Federal PLUS loan death claim paid to a 

lender when a student, on whose behalf a parent received the Federal PLUS loan, dies. A 

disability claim is one on which the loan is conditionally discharged due to the total and 

permanent disability of the borrower.

If a lender repurchases a loan, which had been previously paid as a death or disability claim 

by the agency (that is, the agency paid an invalid claim), subtract the amount of repurchased 

principal from this amount. The lender may also repurchase the loan if a borrower reaffirms a 

debt previously paid as a disability claim.
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AR-11 Closed School/False Certification Claims Paid

Enter the amount of principal paid to lenders for closed school and/or false certification 

claims. A closed school claim is one on which a claim is paid to a lender because the student 

was unable to complete the program in which the student was enrolled due to the closure of 

the institution. 

A false certification claim is one on which a claim is paid to a lender because the student‘s 

eligibility under the FFEL Program was falsely certified by the eligible institution of higher 

education.

If a lender repurchases a loan, which had been previously paid as a closed school or a false 

certification claim by the agency (that is, the agency paid an invalid claim), subtract the amount 

of repurchased principal from this amount.

Also include in this line refund amounts related to unpaid refund, teacher loan forgiveness 

and partial discharges of consolidation loans. An unpaid refund, in the case of an open or 

closed school, is a discharge of a former or current borrower‘s (and any endorser‘s) obligation 

to repay that portion of a FFEL loan (disbursed on or after January 1, 1986) equal to the refund 

that should have been made by the school. Include in this amount any accrued interest and 

other charges associated with the unpaid refund, which are also discharged. 

Teacher loan forgiveness is a discharge of a borrower‘s obligation to repay up to $5,000 or 

up to $17, 500 of their outstanding student loan balances. Forgiveness is available to a 

borrower who has no outstanding balance on the date he or she obtains a loan after October 1, 

1998. 

A partial discharge of a Consolidation loan occurs when a loan was obtained jointly by a 

married couple if one of the borrowers dies or becomes totally and permanently disabled. The 

amount of the Consolidation loan that is discharged is equal to the portion of the outstanding 

balance of the Consolidation loan, as of the date the borrower died or became totally and 

permanently disabled, attributable to any of that borrower's loans that would have been eligible 

for discharge.

In accordance with the unpaid refund, teacher loan forgiveness provisions and the partial 

discharge of Consolidation loans provisions, calculate the amount paid to lenders for 

discharges. Add to this figure the amount of the reinsurance complement requested by the 

agency on loans it holds for which the borrower qualifies for unpaid refund, teacher loan 

forgiveness discharge or partial discharge of a Consolidation loan.

AR-12 Loans Paid-In-Full

Enter the original principal amount (net of cancellations) of all loans that have been paidin-full or are presumed paid-in-full (e.g., the loan has been in repayment 12 or more years and 

there has been no update to the outstanding balance in four (4) years.
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For loans that were paid through consolidation, report the sum of the original principal 

amount for each individual loan that was discharged. This includes Federal Stafford (both 

subsidized and unsubsidized, including Unsubsidized Loans for Middle-Income Borrowers), 

Federal PLUS Loans and Federal SLS Loans.

Do not include loan amounts in a consolidation due to a Federal Consolidation Loan that 

were guaranteed by other agencies. If a Federal Consolidation Loan has been paid-in-full 

report the original principal amount of the Federal Consolidation Loan. Underlying loans 

associated with a Federal Consolidation Loan should be reported as PIF at the time of 

consolidation. 

AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans

Enter the principal amounts, net of cancellations, of all Federal Stafford loans and 

Unsubsidized Stafford Loans for borrowers who are in school or in their grace period as of 

the last day of the reporting year

AR-14 Total Loans in Deferment Prior to First Payment

Enter the original principal amount, net of cancellations, of all FFEL program loans that 

entered deferment status before the first payment became due and are in deferment status at 

the end of the reporting year.

Financial Report Introduction

The financial activity reported in the Federal Fund, Operating Fund and Balance Sheet sections 

should reconcile to the amounts reported on the Guarantor‘s audited financial statements (accrual 

basis). If there are any differences between the net assets on the audited financial statement and the 

ending balance as submitted on AR-57, Federal Fund Balance in the Balance Sheet Section, 

guarantors must submit a schedule explaining those differences to the Department. These 

schedules should be sent via e-mail to FSA_GAR@ed.gov. Data collected will also provide the 

Department with a basis for:

 financial reviews,

 validating the current and projected financial status of guaranty agencies,

 projecting the impact of changes in revenue, and

 managing guaranty agency federal funds held by the agency.

Federal Fund 

The activity reported in this section should reconcile to the amounts reported on the 

Guarantor‘s audited financial statements (accrual basis). Projected yearly estimates are required 

for line items AR-16 through AR-26, with the exception of AR-24, Transfer to Operating Fund 

for Account Maintenance Fee. The ending balance should equal the ending balance on AR-57 

(Federal Fund Balance Sheet Section).
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 78 of 92

AR-15 Beginning Balance (from AR-26 as of 9/30/XX)

Current Year - Report prior FY ending balance, AR-26.

Projected Years - Same as AR-26, Ending Balance for the previous fiscal year.

AR-16 Investment Income

Current Year - Report investment income recognized in the Federal Fund, including 

net increase (decrease) in fair value of investments. If the agency is required by State law to 

combine FFEL program funds with other State funds for investment purposes, then the 

agency must establish a method for allocating a portion of the earnings to the FFEL 

program and must maintain documentation on the allocation method.

Do not include interest earned on the Restricted Account, it should be reported in item 

AR-36 Other Revenue (FFEL and Non-FFEL) and earmarked for default prevention 

activities. 

Interest activity previously reported on AR-49 (Restricted Account Cash, Cash 

Equivalents and Investments) should be reported here on AR-16.

Projected Years - Report projected investment income on the Federal Fund.

AR-17 Reinsurance from ED

Current Year – This line item is pre-populated based on monthly reporting and 

cannot be changed or modified. Adjustments or discrepancies to the pre-populated amount 

should be reported in AR-20, Other Revenues or AR-25, Other Expenses, as appropriate. 

The populated amount is the Federal reinsurance from ED, net of refunds, overpayments 

and repurchases, for defaults, bankruptcies, death, disability, closed school, false 

certification teacher loan forgiveness discharges and unpaid refunds. This amount is 

calculated as follows: Amount Due To/(From) Guarantor for MR-1, Claims Paid plus 

MR-3, Status Changes, minus MR-5 Repurchases-CFY minus MR-6, Repurchases-PFY, 

minus MR-7, Partial Refunds-CFY minus MR-8, Partial Refunds-PFY minus MR-9, 

Overstated Claims for the fiscal year being reported.

Projected Years - Defaults on loans originated prior to FFY 94 receive maximum 

100% reinsurance. Defaults on loans originated on or after FFY 94 through FFY 98 

receive a maximum 98% reinsurance. And defaults on loans originated on or after FFY 98 

receive a maximum of 95% reinsurance. Multiply line item AR-21 by the weighted 

reinsurance ―percentage‖.

AR-18 Collections of Defaulted Loans – Reinsurance Complement

Current Year - Report the reinsurance complement collected on defaulted loans. This 

amount should equal the twelve months reported fiscal year to date (FYTD) on the 

monthly GAFR, Line Items MR-10 through MR-13 for the current FFY. The reinsurance 

complement is calculated as follows: Total Collected less Secretary‘s Share less GA 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 79 of 92

Retention. For comparison and reasonability editing ED will estimate reinsurance 

complement on MR-10, Rehabilitated Loans. Guarantors are required to transfer the 

complement of the reinsurance rate, which was not reimbursed by the Department on 

collections of defaulted loans to the Federal Fund.

Projected Years - Report projected amount of the reinsurance complement from 

collections on FFEL loans.

AR-19 Insurance Premiums 

Current Year – Report the Federal default fee amount recognized. Effective for loans 

guaranteed on or after July 1, 2006, the optional 1 percent insurance premium (guarantee 

fee) has been eliminated and replaced by a mandatory Federal default fee. The fee is equal 

to 1 percent of the principal amount of loans guaranteed on or after July 1, 2006. 

The Federal default fee can either be charged to the borrower by a deduction from the 

proceeds of the loan or paid from other non-federal sources. If the borrower is charged a 

fee, it must be deducted proportionally from the loan proceeds. The default fee must be 

deposited into the agency‘s Federal Fund immediately upon receipt, but no later than 45 

days after the loan proceeds have been disbursed by the lender, even if payment is made 

from a source other than borrower proceeds. 

Projected Years – Enter the amount of projected revenue to be recognized. 

AR-20 Other Revenues 

Current Year - Report other revenues not reported elsewhere in the Federal Fund 

section. Include deferred revenues in this line item. Report itemized entries (description 

and amount) to support total reported in this line item. (See Attachment A.) Itemized 

entries may include: Secretary‘s Share on collections, Secretary‘s fee on defaulted FFEL 

and Direct Loan Consolidation loans (up to 8.5% of collection costs charged the 

borrower), excess consolidation proceeds, OIG interest penalty, vehicle sales, audit 

findings, IRS refund reimbursement; 48 hour settlement, utilities, and usage fees. These 

examples are not all inclusive. 

Projected Years - Report other projected revenues not reported elsewhere in the 

Federal Fund section. Report itemized entries (description and amount) to support total 

reported in this line item. (See Attachment A.) 

AR-21 Claims Expensed to Lenders

Current Year – This line item is pre-populated based on monthly reporting and 

cannot be changed or modified. Adjustments or discrepancies to pre-populated amount 

should be reported in AR-20, Other Revenues or AR-25, Other Expenses, as appropriate. 

The populated amount is calculated as follows: AR-21, Claims Expensed to Lenders equals 

MR-1-A, Defaults (Other Amounts) plus MR-1-B, Exempt/Lender of Last Resort plus 

MR-1-C, Death/Disability plus MR-1-D, Closed School/False Certification plus MR-1-E, 

Bankruptcy plus MR-1-F, Unpaid Refunds plus MR-1-G, Discharges) minus MR-5-A 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 80 of 92

through MR-5-E Repurchases, CFY, (Principal, Interest and Other Amounts) minus MR6-A through MR-6-E, Repurchases-PFY (Principal, Interest and Other Amounts) minus 

MR-7-A through MR-7-E, Partial Refunds-CFY, (Principal Amount) minus MR-8-A 

through MR-8-E, Partial Refunds-PFY, (Principal Amount).

Projected Years - Report projected amount of total claims expensed. Provide 

methodology for this estimate.

AR-22 Recall of Federal Funds to the Restricted Account

No reporting required for this line item. .

AR-23 Transfer to Operating Fund for Default Aversion

Current Year – Report net Default Aversion expense recognized for delinquent loans 

for which agencies receive lender requests for default aversion assistance and for which 

payment is authorized under the Department‘s regulation and guidance for the current 

federal fiscal year. Amount should agree or be reconcilable to line AR-30, Default 

Aversion Fee Revenue. 

Projected Years – Project net Default Aversion expense to be recognized for 

delinquent loans for which agencies receive lender requests for default aversion assistance 

and for which payment is authorized under the Department‘s regulation and guidance for 

the current federal fiscal year. Amount should agree or be reconcilable to line AR-30, 

Default Aversion Fee Revenue.

AR-24 Transfer to Operating Fund for Account Maintenance Fee

Current Year – As applicable, report the transfer amount, regardless of the actual 

transfer, from the Federal Fund for account maintenance fee for the current FY. Amount 

should reconcile to line AR-33, Transfer from Federal Fund for Account Maintenance Fee.

AR-25 Other Expenses 

Current Year - Report other expenses not reported elsewhere in the Federal Fund 

section. Include provision for loan losses (example of calculation provided in AR-56).

Report itemized entries (description and amount) to support total reported in this line item. 

(See Attachment A.) Itemized entries may include: Secretary‘s share on collections, 

Secretary‘s fee on defaulted FFEL and Direct Loan Consolidation loans (up to 8.5% of 

collection costs charged the borrower), excess consolidation proceeds), premium fee 

refunds to lenders, early withdrawal counseling fee, GA portion of $250M recall, refund of 

insurance premiums, depreciation, IRS tax offset, and prior year accruals.

Projected Years - Report other projected expenses not reported elsewhere in the 

Federal Fund section. Report itemized entries (description and amount) to support total 

reported in this line item. (See Attachment A.)
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 81 of 92

AR-26 Ending Balance

Current Year - The ending balance must equal the sum of AR-15 through AR-20 

minus AR-21 through AR-25 as well as the ending balance on AR-57 (Federal Fund 

Balance Sheet Section).

Projected Years - The projected ending balance must equal the sum of AR-15 

through AR-20 minus AR-21 through AR-25

Supplemental Information

AR-27 Amount transferred from Federal Fund to Operating Fund 

for Operating Expenses (Repayable)

No reporting required for this line item. .

AR-28 Amount received from Operating Fund to Repay Advance for 

Operating Expenses

No reporting required for this line item.

Operating Fund

The activity reported in this section should reconcile to the amounts reported on the 

Guarantor‘s audited financial statements on an accrual basis. Projections are required for line items 

AR-29 thorough AR-40, except AR-33 and AR-40.

AR-29 Beginning Balance (from 9/30/XX)

Current Year - Report prior FFY ending balance, AR-40. 

Projected Years - Same as AR-40, Ending Balance for the previous fiscal year.

AR-30 Default Aversion Fee Revenue

Current Year – Report DAF revenue recognized for delinquent loans for which 

agencies receive lender requests for default aversion assistance and for which payment is 

authorized by Department‘s regulations and guidance. Amount should reconcile to line 

AR-23, Transfer to Operating Fund for Default Aversion.

Projected Years – Report projected DAF revenue to be recognized for delinquent 

loans for which agencies receive lender requests for assistance and for which payment is 

authorized by the Department‘s regulations and guidance. Amount should reconcile to line 

AR-23, Transfer to Operating Fund for Default Aversion.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 82 of 92

AR-31 Loan Processing and Issuance Fee Revenue 

Current Year - Report loan processing and issuance fee revenue recognized. 

Projected Years - Report projected loan processing and issuance fee recognized.

AR-32 Account Maintenance Fee Revenue Received from ED

Current Year - Report account maintenance fees recognized from the Department. 

Projected Years - Report projected account maintenance fees to be recognized from 

the Department.

AR-33 Transfer from Federal Fund for Account Maintenance Fee 

Current Year - Report account maintenance fees recognized subject to Federal Fund 

settlement (AR-24, Transfer to Operating Fund for Account Maintenance Fee) when 

amount exceeds ED‘s budgetary cap.

AR-34 Collections of Defaulted Loans less Reinsurance 

Complement (GA Collection Retention)

Current Year –This line item is pre-populated based on monthly reporting and 

cannot be changed or modified. Adjustments or discrepancies to the pre-populated 

amount should be reported in AR-36, Other Revenues (FFEL and Non FFEL) or AR39, Other Expenditures (FFEL and Non FFEL), as appropriate. The populated 

amount is collection revenue recognized from payments to the guaranty agency by 

defaulted borrowers. 

The pre-populated amount is calculated as follows: AR-34, Collections on 

Defaulted Loans (less reinsurance complement) equals MR-10-A, Rehabilitated Loans 

(Principal Amount) plus MR-11-B, FFEL Consolidation (Principal and Interest 

Amounts) plus MR-12-B, AWG (Principal, Interest, and Other Amounts) plus MR-13-

B, Default Collections (Principal, Interest and Other). 

Projected Years – Report projected collection revenue recognized from payments to 

guaranty agency by defaulted borrowers. Amount reported should be your agency share of 

collections. Include receipts from rehabilitated loan sales and consolidation of defaulted 

loans under the FFEL program. Do not include AR-18 (Reinsurance Complement). 

AR-35 Investment Income

Current Year - Enter the amount of all investment income recognized in the 

Operating Fund including net increase (decrease) in fair value of investments 

Do not include interest earned on the Restricted Account, it should be reported in item 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 83 of 92

AR-36, Other Revenue (FFEL and non-FFEL). 

Projected Years - Report projected earnings on the Operating Fund investments.

AR-36 Other Revenue (FFEL and Non-FFEL)

Current Year Report other revenue, FFEL and non-FFEL, not reported elsewhere in 

the Operating Fund section. This line item should include (1) interest earned on the 

interest that was transferred from the Restricted Account; (2) payments received to 

consolidate loans under the Direct Loan Program, net of the Secretary‘s fee; (3) collection 

costs received from the Department on rehabilitated loan assignments under the 

Rehabilitated Loan Purchase Program. Report itemized entries (description and amount) to 

support total the total reported in this line item. (See Attachment B.) In addition to the 

above mentioned items, itemized entries may include: service income, default aversion and 

VFA revenue.

Project Year - Report other projected revenues, FFEL and non-FFEL, not reported 

elsewhere in the Operating Fund section. This amount will include interest earned on the 

interest that was transferred from the Restricted Account and payments received to 

consolidate under the Direct Loan Program, net of Secretary‘s fee. Report projected 

itemized entries (description and amount) to support total reported in this line item. (See 

Attachment B.)

AR-37 Collections of Defaulted Loans (Secretary Equitable Share)

No reporting required for this line item due to the 48-hour rule. Secretary‘s Equitable 

Share should be reported in AR-25, Other Expenses.

AR-38 Operating Expenses 

Current Year - Report expenses associated with guaranty agency related activities, 

including application processing, loan disbursement, enrollment and repayment status 

management, default aversion activities, default collection activities, school and lender 

training, financial aid awareness and related outreach activities and compliance monitoring. 

Projected Years - Projected expenses associated with guaranty agency related 

application processing, loan disbursement, enrollment and repayment status management, 

default aversion activities, default collection activities, school and lender training, financial 

aid awareness and related outreach activities and compliance monitoring. 

AR-39 Other Expenditures (FFEL and Non-FFEL)

Current Year - Report other expenses, FFEL and Non-FFEL, not reported elsewhere 

in the Operating Fund section. This will include amounts used for default prevention 

activities and the discount portion of discounted rehabilitated loan sales. Report itemized 

entries (description and amount) to support total reported in this line item. (See 

Attachment B.) Itemized entries may include: 48-hour rule, administration costs, transfers 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 84 of 92

to federal fund and OIG audit liabilities.

Project Year - Report other projected expenses, FFEL and Non-FFEL, not reported 

elsewhere in the Operating Fund section. This will include amounts used for default 

prevention activities. Report projected itemized entries (description and amount) to support 

total reported in this line item. (See Attachment B.)

AR-40 Ending Balance

Current Year - The ending balance must equal the sum of AR-29 through AR-36 

minus AR-37 through AR-39 = AR-40.

Projected Years - The projected ending balance must equal the sum of AR-29 

through AR-36 minus AR-37 through AR-39 = AR-40.

Supplemental Information

AR-41 Amount Received from Federal Fund for Operating 

Expenses (Repayable)

No reporting required for this line item.

AR-42 Amount Repaid to Federal Fund for Operating Expenses

No reporting required for this line item

Restricted Account

This section reported on all revenues and expenses of the restricted account that was created to 

retain the recall amounts required by Section 422(h) of the HEA. This section is no longer 

required.

AR-43 Beginning Balance (from 9/30/XX)

No reporting required for this line item.

AR-44 Recall of Federal Funds from Federal Fund

No reporting required for this line item.

AR-45 Investment Income on Restricted Account

No reporting required for this line item. Amounts previously reported here for interest 

earned on the Restricted Account is now reported in AR-25, Other Expenses.

AR-46 Investment Income on Restricted Account Expensed for 
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 85 of 92

Default Prevention 

No reporting required for this line item. Amounts previously reported here for earnings 

from the Restricted Reserve Account expensed for activities to reduce student loan defaults 

is now reported in AR-39, Other Expenditures. 

AR-47 Ending Balance

 No reporting required for this line item.

Balance Sheet Section (Federal Fund)

The balances reported in this section should reconcile to amounts reported on the Guarantor‘s 

audited financial statements Balance Sheet as of the end of the Federal fiscal year 9/30/XX. The 

ending balance AR-57 in this section should equal the ending balance on AR-26 (Federal Fund 

Activity Section). All reporting should be on an accrual basis and in accordance with GAAP.

AR-48 Cash, Cash Equivalents and Investments

Report cash, cash equivalents and investment (regardless of maturity date of 

investments) balances. If applicable, report your Voluntary Flexible Agreement (VFA) 

escrow balance in this line item.

AR-49 Restricted Account Cash, Cash Equivalents and Investments 

No reporting required for this line item. Do not report escrow balances in this line 

item.

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

Report balances of property, plant, and equipment less accumulated depreciation.

AR-51 Accounts Receivable from the ED

Report balances owed to the Federal Fund by ED (i.e., reinsurance and other 

payments).

AR-52 Other Assets

Report total balances of other current and non-current asset accounts that were not 

reported in line items AR-48 through AR-51. Report itemized entries (description, longterm or short-term, and amount) to support total reported in this line item. (See 

Attachment C.) Short-term itemized entries may include: guarantee fee receivable, 

receivable from Operating Fund, and default aversion fee rebate.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 86 of 92

AR-53 Accounts Payable, Accrued Expenses and Other Current 

Liabilities

Report liabilities for expenses due, others than ED, including amounts due Operating 

Fund and claim payments payable to lenders, if amount is to be paid within 12 months. 

Report long-term portion in AR-55 (Other Liabilities).

AR-54 Accounts Payable to ED

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

AR-55 Other Liabilities

Report other liabilities that are not reported in other line items, including outstanding 

federal advances due to ED, and the remaining reserve return obligation, to be paid more 

than 12 months from current date (i.e., recall for FY 06 and FY 07). Report other shortterm Liabilities in AR-53, Accounts Payable, Accrued Expenses and Current Liabilities 

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

Report allowances, such as deferred (unearned) Federal default fees, as well as other 

obligations of the Federal Fund. Report itemized entries (description and amount) to 

support the total reported in this line item (See Attachment C.). Loan Loss Provision must 

also be reported in AR-25 (See page 78). Loan Loss Provision is calculated as follows:

Loan Loss Provision:

Original Principal Outstanding (OPO) x Current Year Default Trigger Rate 

without the rehabilitation credit x 3%

OPO = AR1 – AR2 + AR3 – AR4 – AR5 + AR6 – AR7 – AR8 – AR9 – AR10 – AR11-

AR12

Current Year Default Trigger Rate without the rehabilitation credit = (MR1A 

Principal sum for 12 months of the current year – MR7A Principal sum for the 12 months 

of the current year) / Prior Year‘s Loans In Repayment (AR1 – AR2 + AR3 – AR4 – AR5 

+ AR6 – AR7 – AR8 – AR9 – AR10 – AR11 – AR12 – AR13 – AR14)

AR-57 Federal Fund Balance

The Federal Fund balance on an accrual basis for the fiscal year being reported is 

calculated by adding line items AR-48 through AR-52 and subtracting line items AR-53 

through AR-56. This amount should represent the equity on the audited balance sheet 

section of the Federal Fund. AR-57 must equal AR-26.
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 87 of 92

ATTACHMENT A – Federal Fund Itemized Schedule

FEDERAL FUND

S C H E D U L E O F I T E M I Z E D L I N E I T E M S

ITEM

NO. CATEGORY

AMT./

CY 

ACTUAL

CY + 1 

PROJ.

CY +2 

PROJ.

CY +3 

PROJ.

CY + 4 

PROJ.

CY + 5 

PROJ.

EXPLANATION

AR-20 OTHER REVENUES:

 AR-25 OTHER EXPENSES:
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 88 of 92

ATTACHMENT B – Operating Fund Itemized Schedule

OPERATING FUND

SCHEDULE OF ITEMIZED LINE ITEMS

ITEM

NO. CATEGORY

AMT./

CY 

ACTUAL

CY + 1 

PROJ.

CY +2 

PROJ.

CY +3 

PROJ.

CY +4 

PROJ.

CY + 5 

PROJ.

EXPLANATION

 AR-36 OTHER REVENUES:

FFEL:

NON-FFEL:

 AR-39 OTHER 

EXPENDITURES:

FFEL:

NON-FFEL:

1. Other Student Financial 

Aid related expenditures for 

the benefit of students
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 89 of 92

ATTACHMENT C – Balance Sheet Section Itemized Schedule

BALANCE SHEET SECTION (Federal Fund)

S C H E D U L E O F I T E M I Z E D L I N E I T E M S

ITEM

NO. CATEGORY

AMT./

CY 

ACTUAL

CY + 1 

PROJ.

CY +2 

PROJ.

CY +3 

PROJ.

CY + 4 

PROJ.

CY + 5 

PROJ.

EXPLANATION

AR-52 OTHER ASSETS:

 AR-56 ALLOWANCES AND 

OTHER NON-CASH 

CHARGES TO FEDERAL 

FUND:
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 90 of 92

ATTACHMENT D – Guaranty Agency List

Guaranty Agency List

This is a list of the guaranty agencies that currently or previously received payments from ED 

under the Federal Family Education Loan Program. Some of these agencies no longer issue loan 

guarantees or have closed or merged with other agencies.

Listed below for each guaranty agency (GA) is its guaranty agency code, its guaranty agency 

State name, its guaranty agency abbreviation and its full legal name. For brevity and automatic data 

processing purposes, ED refers to a guaranty agency by a three-digit code (GA code) or by the 

name of the principal State in which it does business (GA State name). ED sometimes also refers 

to a guaranty agency by a two-letter abbreviation (GA abbreviation) based on the guaranty agency 

State name. Agencies that no longer guarantee loans or have closed or merged with other 

agencies are noted with an asterisk.

The Roman numerals in parentheses in some guaranty agency‘s State names are used to 

distinguish between agencies in States which have more than one guaranty agency involved in the 

Federal Family Education Loan Program. The numerals are assigned from low to high in the order 

in which the guaranty agencies signed insurance agreements with the Secretary of Education. This 

list is in alphabetical order by GA State name.

Code; GA State Name, GA Abbreviation; Legal Name:

701* Alabama, AL

Alabama Commission on Higher Education

804* Arizona, AZ

Arizona Education Loan Program

705 Arkansas, AR

Student Loan Guarantee Foundation of Arkansas

706 California, CA

Education Credit Management Corporation - California

708 Colorado, CO

Colorado College Access Network 

709* Connecticut, CT

Connecticut Student Loan Foundation

710* Delaware, DE

Delaware Postsecondary Education Commission

711* District of Columbia (I), DG

District of Columbia Student Loan Insurance Program 

611* District of Columbia (II), DC

Higher Education Assistance Foundation - District of Columbia Region

712 Florida, FL

Florida Student Financial Assistance Foundation

713 Georgia, GA

Georgia Higher Education Assistance Corporation

815* Hawaii, HI

Hawaii Education Loan Program
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 91 of 92

716* Idaho, ID

Student Loan Fund of Idaho, Inc.

717 Illinois, IL

Illinois Student Assistance Commission

718* Indiana, IN

State Student Assistance Commission of Indiana

719 Iowa, IA

Iowa College Aid Commission

620* Kansas, KS

Higher Education Assistance Foundation - Kansas Region

721 Kentucky, KY

Kentucky, Higher Education Assistance Authority

722 Louisiana, LA

Louisiana Office of Student Financial Assistance

723 Maine, ME

Finance Authority of Maine

724* Maryland, MD

Maryland Higher Education Loan Corporation

725 Massachusetts, MA

Massachusetts Higher Education Assistance Corporation

726 Michigan, MI

Michigan Higher Education Assistance Authority

627* Minnesota (I), MN

Higher Education Assistance Foundation

727* Minnesota (II), MM

Norstar Guarantee, Inc.

728* Mississippi, MS

Mississippi Guaranteed Student Loan Agency

729 Missouri, MO

Coordinating Board for Higher Education 

730 Montana, MT

Guarantee Student Loan Program 

631* Nebraska (I), NB

Higher Education Assistance Foundation - Nebraska Region

731 Nebraska (II), NE

Nebraska Student Loan Program

733 New Hampshire, NH

New Hampshire Higher Education Assistance Foundation

734 New Jersey, NJ

New Jersey Higher Education Assistance Authority

735 New Mexico, NM

Student Loan Guarantee Corporation

736 New York, NY

New York State Higher Education Services Corporation

737 North Carolina, NC

North Carolina State Education Assistance Authority
G u a r a n t y A g e n c y F i n a n c i a l R e p o r t ( G A F R ) G u i d e

Revised: June 2011 Page 92 of 92

738 North Dakota, ND

North Dakota Guaranteed Student Loan Program

739* Ohio, OH

Ohio Student Loan Commission

740 Oklahoma, OK

Oklahoma Guaranteed Student Loan Program

741* Oregon, OR

Oregon State Scholarship Commission

742 Pennsylvania, PA

Pennsylvania Higher Education Assistance Agency

772* Puerto Rico, PR

Puerto Rico Higher Education Assistance Corporation

744 Rhode Island, RI

Rhode Island Higher Education Assistance Authority

745 South Carolina, SC

South Carolina Loan Corporation

746* South Dakota, SD

Education Assistance Corporation

747 Tennessee, TN

Tennessee Student Assistance Corporation

948* Texas (I), TC

Texas Higher Education Coordinating Board

748 Texas (II), TX

Texas Guaranteed Student Loan Corporation 

800 USA Funds, UF

United Student Aid Funds, Inc.

749 Utah, UT

Utah Higher Education Assistance Authority

750 Vermont, VT

Vermont Student Assistance Corporation

778* Virgin Islands, VI

Virgin Islands Joint Boards of Education

751* Virginia, VA

Virginia State Education Assistance Authority

753 Washington, WA

Northwest Education Loan Association

654* West Virginia, WV

Higher Education Assistance Foundation - West Virginia - Region

755 Wisconsin, WI

Great Lakes Higher Education Corporation

656* Wyoming, WY

Higher Education Assistance Foundation - Wyoming Region

927 Minnesota, MB

Education Credit Management Corporation I

951 Minnesota, MV

Educational Credit Management Corporation II