REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 1

FEDERAL AGENCIES

FISCAL YEAR 2001 REPORT TO THE CONGRESS 

U.S. GOVERNMENT RECEIVABLES AND

DEBT COLLECTION ACTIVITIES

OF

FEDERAL AGENCIES

I - EXECUTIVE SUMMARY.......................................................................................... 2

A - LEGISLATIVE REQUIREMENT TO REPORT .......................................................................................................... 2

B - SCOPE OF REPORT ................................................................................................................................................. 2

C - ACCOMPLISHMENTS AND SUCCESSES................................................................................................................. 2

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND WRITE-OFFS 3

A - FISCAL YEAR END DATA..................................................................................................................................... 3

1. Receivables and Delinquent Debt ................................................................................................................. 3

2. Collections and Write-offs ............................................................................................................................... 5

3. Analysis for Mandatory Referral to Treasury Under the DCIA............................................................. 6

B - KEY TRENDS.......................................................................................................................................................... 6

III - GOVERNMENT-WIDE COLLECTION ACTIVITIES ...................................... 7

A - USE OF PRIVATE COLLECTION AGENCIES......................................................................................................... 7

1. Description......................................................................................................................................................... 7

2. Referrals ............................................................................................................................................................. 8

3. Collections........................................................................................................................................................... 8

B - TREASURY OFFSET PROGRAM............................................................................................................................. 8

1. Description......................................................................................................................................................... 8

2. Referrals ........................................................................................................................................................... 10

3. Collections ....................................................................................................................................................... 11

C - CROSS-SERVICING............................................................................................................................................... 12

1. Description....................................................................................................................................................... 12

2. Referrals ........................................................................................................................................................... 13

3. Collections ....................................................................................................................................................... 13

D - LITIGATION AT THE DEPARTMENT OF JUSTICE............................................................................................... 13

1. Description........................................................................................................................................................ 13

2. Referrals ............................................................................................................................................................ 14

3. Collections......................................................................................................................................................... 14

IV – SPECIFIC AGENCY ACTIVITIES ..................................................................... 15

A - EDUCATION STUDENT LOANS........................................................................................................................... 15

B - SBA AND HUD LOAN ASSET SALES............................................................................................................... 16

APPENDIX I: FEDERAL RECEIVABLES AND DELINQUENT DEBT............... 17

APPENDIX II: SOURCES OF DATA.......................................................................... 18
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 2

FEDERAL AGENCIES 

I - EXECUTIVE SUMMARY 

A - Legislative Requirement to Report 

The Debt Collection Act of 1982 as amended by the Debt Collection Improvement Act of 

1996 (DCIA) directs the Secretary of the Treasury (Secretary) to report to Congress 

annually on the management of debt collection activities by the head of each Federal 

agency. The report is also to include the information that the agency heads provide to the 

Secretary on the status of loans and accounts receivable that each manages. 

See 31 U.S.C. § 3719. 

B - Scope of Report 

This report summarizes the information provided by Federal agencies concerning their 

receivables as reported to the Department of the Treasury (Treasury) and as contained in 

Treasury’s Report on Receivables Due from the Public (TROR). It includes information 

concerning total receivables, collections on receivables, delinquencies, collections on 

delinquencies and write-offs. It also summarizes key government-wide actions to collect 

delinquent debt, a specific concern that led to the passage of the DCIA. Additionally, this 

report highlights several special and/or unique collection activities and accomplishments 

of certain Federal agencies. 

C - Accomplishments and Successes 

• Through September 30, 2001, $12.2 billion has been collected through Treasury 

offset and cross-servicing programs since the enactment of DCIA in April 1996. 

• The Federal government collected $109.7 billion in fiscal year (FY) 2001 on all its 

nontax receivables, which was $10.3 billion more than FY 2000 collections. 

• At the end of FY 2001, Federal agencies’ compliance with the provisions of the 

DCIA mandating the referral of debts to Treasury improved to 92 percent of eligible 

debts for offset (as compared to 86 percent in 2000) and 74 percent of eligible debt 

for cross-servicing (as compared to 71 percent in 2000). 

• In FY 2001, the Department of Justice (DOJ) collected over $2.9 billion in cash 

recoveries on delinquent debts owed to Federal agencies through its financial 

litigation program. DOJ has collected a total of $10.7 billion through civil litigation 

in the last five fiscal years. 

• As of September 30, 2001, private collection agencies (PCAs) under contract with the 

Department of Education (Education), the Department of Health and Human Services 

(HHS) and Treasury had referrals of $12.7 billion in Federal debt, and in FY 2001 

these PCAs collected $395.4 million. 

• In FY 2001, the Department of Housing and Urban Development (HUD) and the 

Small Business Administration (SBA) completed loan asset sales of performing and 

nonperforming loans totaling $3 billion in unpaid principal balance. These sales 

generated $2 billion in gross proceeds. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 3 FEDERAL AGENCIES 

• Total collections by Treasury’s Financial Management Service (FMS) on delinquent 

debts through its Treasury Offset Program (TOP) and its Cross-Servicing Program 

were $3.16 billion in FY 2001. This is an increase of $530 million over FY 2000. 

The increase was primarily due to offsets of Advanced Refund Credit Payments (i.e., 

tax rebates) which totaled $471 million in FY 2001. 

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND WRITE-OFFS 

TOTAL RECEIVABLES TOTAL DELINQUENT DEBT 

$350 

$259.1 $273.5 $270.6 $282.0 $289.5 $70 

$60 $300 $51.9 $60.0 $53.3 $58.0 $56.2 

Dollars in Billions $250 

$200 

$150 

$100 

Dollars in Billions $50 

$40 

$30 

$20 

$50 

$0 

$10 

1997 1998 1999 2000 2001 

Fiscal Year 

$0 

1997 1998 1999 2000 2001 

Fiscal Year 

A - Fiscal Year End Data 

1. Receivables and Delinquent Debt 

• The two agencies with the largest total receivables at the end of FY 2001 are the 

Department of Agriculture (USDA) ($103.2 billion) and Education ($83.2 billion). 

Receivables from these two agencies comprise 64.4 percent of the Government’s total 

receivables. 

• Five distinct programs accounted for over $100 billion of USDA receivables: rural 

utilities ($31.4 billion); rural housing ($28.6 billion); Commodity Credit Corporation 

$22 billion); agricultural credit ($9.9 billion); and rural development ($9 billion). 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 4

FEDERAL AGENCIES 

• Student loan programs accounted for almost all of Education’s receivables: direct 

student loans ($71.8 billion), and defaulted guaranteed student loans ($10.4 billion). 

Type of 

Receivable 

Total 

Receivables 

as of 

(in billions) 

Percentage of 

Total 

Receivables 

Delinquencies 

as of 

(in billions) 

Delinquencies 

as a 

Percentage of 

Receivables 

Direct Loan $215.4 74.4 $23 10.7 

Administrative 

* $45.8 15.8 $16.6 36.2 

Defaulted 

Guaranteed 

Loan 

$28.3 9.8 $16.6 58.7 

Totals $289.5 100 $56.2 19.4 

9/30/01 9/30/01 

*Includes fines, penalties and overpayments, etc. 

• Almost three-quarters of the Government’s receivables were direct loans. 

Government-wide, delinquencies as a percentage of receivables varied significantly 

between direct loans, defaulted guaranteed loans, and administrative debts. 

• At the end of FY 2001, $43.8 billion (78 percent) of the Government’s delinquent 

debts were distributed among 6 agencies: Education, Federal Communications 

Commission (FCC), USDA, HHS, Export-Import Bank, and Department of Defense 

(DoD). 

• Debts delinquent less than 180 days totaled $14.8 billion, or 26 percent of the total 

amount of delinquent debts. 

The age of debts more than 180 delinquent at the 

• Debts more than 180 days end of FY 2001 is denoted in the table below.

delinquent totaled $41.4 

billion at the end of FY 

2001, as compared to 

$38.1 billion at the end of 

FY 2000. Agencies 

reporting significant 

changes in FY 2001 were 

Education (an increase of 

$4.3 billion) and FCC (a 

decrease of $2.1 billion). 

Time 

Delinquent 

$ Amount 

of Debts 

(in 

billions) 

Ratio to all 

debts > 180 

days 

delinquent 

(in percent) 

181-365 days 5.6 13.5 

1-2 years 11.1 26.8 

2-6 years 14.7 35.5 

6-10 years 7 16.9 

Over 10 

years 

3 7.2 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 5 FEDERAL AGENCIES 

2. Collections and Write-offs TOTAL COLLECTIONS ON RECEIVABLES 

$101.6 $87.6 $94.2 $99.4 $109.7 

$0 

$20 

$40 

$60 

$80 

$100 

$120 

Dollars in Billions 

1997 1998 1999 2000 2001 

Fiscal Year 

$6.1 $4.5 $7.1 $6.2 $8.5 

$0 

$2 

$4 

$6 

$8 

$10 

Dollars in Billions 

1997 1998 1999 2000 2001 

Fiscal Year 

TOTAL WRITE-OFFS 

• Total collections on 

receivables increased by 

$10.3 billion in 

FY 2001, a 10.4 percent 

increase over FY 2000 

collections. 

• Agencies that reported 

significant increases in 

collections were FCC (an 

increase of $5.1 billion), 

Education (an increase of 

$2.1 billion), and SBA (an 

increase of $1.2 billion). 

• Over 60 percent of all 

collections in FY 

2001 were made on 

administrative 

receivables. 

Collection rates 

varied significantly by 

type of receivable. 

• Total write-offs increased by $2.3 billion 

in FY 2001, a 37.1 percent increase over 

FY 2000 write-offs. USDA write-offs 

increased by $1.9 billion over FY 2000 

write-offs. 

• Agencies charge interest, penalties, and 

administrative costs on receivables in 

accordance with applicable loan 

documents and statutory requirements. 

See 31 U.S.C. 3717. 

billion in receivables at the end of FY 

2001, $8.8 billion represents unpaid 

interest, penalties, and administrative costs. 

Type of 

Receivable 

Collection 

s in FY 

2001 

(in 

billions) 

Percentage 

of all FY 

2001 

collections 

Collection 

Rate* 

Direct Loan $33.9 30.9 15.7 

Administrative $69.5 63.4 151.7 

Defaulted 

Guaranteed 

Loan 

$6.3 5.7 22.3 

Totals $109.7 100 37.9 

*Figured by dividing collections by year end receivables 

Of the $289.5 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 6 FEDERAL AGENCIES 

3. Analysis for Mandatory Referral to Treasury Under the DCIA 

Debts Eligible for Referral to TOP and Cross-Servicing 

($ in billions) 

For FY 2000 

(As of 

9/30/99) 

For FY 2001 

(As of 9/30/00) 

For FY 2002 

(As of 

9/30/01) 

Total CNC* and Debt > 180 

Days Delinquent but < 10 years 

Delinquent 

$59.2 $61.8 $63.3 

Eligible to Refer for Offset $31.3 $31.3 $33.5 

Eligible to Refer for CrossServicing $6.4 $6.9 $7.2 

*“Currently Not Collectible” – delinquent debts written off but not closed out (see Appendix I). 

• The DCIA specifically mandates that Federal agencies, with certain exemptions, 

transfer nontax debt more than 180 days delinquent to Treasury for collection through 

offset and/or cross-servicing. 

• Each year, an analysis is done to determine the dollar amount of delinquent debts 

eligible for referral to Treasury for offset and cross-servicing in the upcoming fiscal 

year. For FY 2001, this analysis has been incorporated as part of agencies’ reporting 

for the TROR, and provides referral eligibility information for FY 2002. 

• In the analysis, delinquent debts reported as currently not collectible (CNC) are added 

to debts reported as more than 180 days but less than 10 years delinquent to 

determine the starting amount for calculating the amounts eligible for referral. 

• Certain debts are not eligible for referral to Treasury for either offset or crossservicing because of various exemptions permitted under the DCIA or otherwise 

required by law. Debts exempt from both offset and cross-servicing include those in 

bankruptcy, appeals, or forbearance; debts referred to DOJ for litigation; or 

foreclosure and foreign/sovereign debts. Additional exemptions from cross-servicing 

include debts at private collection agencies, debts eligible for internal offset, and 

debts exempted from cross-servicing by Treasury. 

B - Key Trends 

• Growth in the Federal Government’s portfolio in the last few years can be attributed 

to increases in Education’s receivables. Education’s receivables rose $13.2 billion in 

FY 2001 to $83.2 billion, as compared to $70 billion at the end of FY 2000, and 

$57.3 billion at the end of FY 1999. Education’s receivables represented 28.7 percent 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 7

FEDERAL AGENCIES 

of the Government’s total receivables at the end of FY 2001, up from 21.2 percent at 

the end of FY 1999. 

• Education’s ratio of delinquencies to receivables declined to 23.1 percent at the end 

of FY 2001 after being fairly constant in FY 1999 (26.75 percent) and FY 2000 

(26.66 percent). 

• USDA’s receivables and delinquencies have remained fairly constant over the last 

three fiscal years. Receivables and delinquencies totaled $103.4 billion and $6.4 

billion, respectively, at the end of FY 1999; $104.7 billion and $6.3 billion, 

respectively, at the end of FY 2000; and $103.1 billion and $6.2 billion, respectively, 

at the end of FY 2001. 

FY 1999 FY 2000 FY 2001 

Debts >180 days delinquent $38.5 billion $38.1 billion $41.4 billion 

As a % of total receivables 14.2 13.5 14.4 

• At the end of FY 2001, debts more than 180 days delinquent in comparison to total 

receivables rose to FY 1999 levels after declining slightly in FY 2000. 

Detailed data for 12 specific agencies for FY 2001 can be found on the Federal 

Receivables and Delinquent Debt table in the Appendix I. 

III - GOVERNMENT-WIDE COLLECTION ACTIVITIES 

A - Use of Private Collection Agencies 

1. Description 

• Education, Treasury, and HHS have each established contracts with private collection 

agencies (PCAs) to collect debts owed to the Federal Government. In addition to 

collecting debts, PCAs also help Federal agencies establish repayment agreements and 

resolve debts administratively (e.g., by determining if a debtor is bankrupt, disabled or 

deceased). 

• Education uses PCAs to collect its portfolio of defaulted student loan debts. Education 

relies heavily on PCAs and refers every eligible debt to one of its seventeen PCAs as 

quickly as possible. Education’s PCAs also implement Education’s use of 

administrative wage garnishment as a debt collection tool. 

• Treasury’s PCA contract is administered by FMS and is used as part of its crossservicing program. Debts which are not collected or resolved within 30 days after 

transfer to FMS for cross-servicing are referred to a PCA for collection action. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 8 FEDERAL AGENCIES 

• HHS’ PCA contract is administered by its Program Support Center (PSC), which 

provides centralized debt collection services for HHS’ agencies and bureaus, and several 

Federal agencies. PSC refers debts to its PCA if payment in full is not made or a 

repayment agreement has not been established within 45 days after the PSC receives the 

debt for collection action. 

2. Referrals 

• At the end of FY 2001, 

$12.7 billion in Federal 

debts were referred to 

PCAs for collection 

action. This represents a 

19.8 percent increase in 

referrals from the end of 

FY 1999. 

3. Collections 

Referrals to PCAs 

Agency FY1999 

(in millions) 

FY2000 

(in millions) 

FY2001 

(in millions) 

HHS $90 $317 $378 

FMS $2,504 $2,613 $3,645 

Education $8,000 $9,100 $8,700 

Totals $10,594 $12,030 $12,723 

• Collections by PCAs 

have increased at all three 

agencies in the last two 

fiscal years. Total PCA 

collections were $395.4 

million in FY 2001, a 

53.1 percent increase 

over FY 1999 collections. 

Collections by PCAs 

Agency FY1999 

(in millions) 

FY2000 

(in millions) 

FY2001 

(in millions) 

HHS $5.3 $7.5 $16.6 

FMS $14.9 $21.8 $27.8 

*Includes collections by administrative wage garnishment 

B - Treasury Offset Program (TOP) 

1. Description 

• Offset is a program whereby Federal payments are reduced or "offset" to satisfy a 

person's overdue Federal debt, child support obligation, or state income tax debt. A 

payee's name and taxpayer identification number are matched against a Treasury/FMS 

database of delinquent debtors for automatic offset of funds. Offset funds are then used 

to satisfy payment of the delinquent debt to the extent allowed by law. 

• For FY 2001, payment types subject to offset include Office of Personnel Management 

retirement payments, Internal Revenue Service tax refunds, vendor payments, Federal 

employee travel payments, some Federal salary payments, and Social Security benefit 

payments. 

Education* $238 $322 $351 

Totals $258.2 $351.3 $395.4 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 9 FEDERAL AGENCIES 

• Offset of Federal salary payments through TOP has been implemented in partnership 

with USDA’s National Finance Center, a salary paying agency, and is intended to 

provide a more efficient process than the non-centralized salary offset process currently 

used by Federal agencies. The Department of Interior was just recently incorporated into 

the process, and other salary paying agencies (such as DoD, U. S. Postal Service and the 

Department of Veterans Affairs) will be incorporated into the process over the next 

several years. 

• Offset of Social Security benefits payments, which began in May 2001, has been 

implemented in stages to insure that payment recipients receive appropriate notices of 

potential offsets, as well as the opportunity to take action to avoid offsets. 

• In January 2000, FMS began collecting state income tax debts by offsetting Federal 

income tax refunds, as authorized by the 1998 Internal Revenue Service Restructuring 

and Reform Act. 

• In July 2000, FMS initiated Continuous Tax Levy, a program whereby delinquent 

Federal income tax debts are collected by levying nontax payments, as authorized by 

the 1997 Taxpayer Relief Act. The Continuous Tax Levy Program has recently been 

expanded to include Social Security benefit payments. Continuous Tax Levy is 

accomplished through a process almost identical to that of offset, that is, matching of 

delinquent debtor data with payment record data and automated collection of the debt 

at the time of payment. 
2.6

REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 10 FEDERAL AGENCIES 

2. Referrals 

TOTAL DEBT REFERRALS TO THE TREASURY OFFSET PROGRAM 

$16.92 

$41.20 

$23.28 

$47.15 

$26.84 

$52.73 

$0.39 

$54.69 

$28.78 

$68.37 

$2.37 

$82.53 

$0.00 

$50.00 

$100.00 

$150.00 

$200.00 

Dollars in Billions 

Federal Tax N/A N/A $54.69 $82.53 

State Income Tax N/A N/A $0.39 $2.37 

Child Support $41.20 $47.15 $52.73 $68.37 

Federal Nontax Debt $16.92 $23.28 $26.84 $28.78 

Sep. 1998 Sep. 1999 Sep. 2000 Sep. 2001 

$70.4 

$134.6 

6 

$182.618 

$58.1 

• As of September 30, 2001, the largest component of TOP’s delinquent debtor database 

was the $82.53 billion in Federal income tax debts submitted for continuous tax levy. 

• Efforts by states, HHS’ Office of Child Support Enforcement (OCSE), and FMS to refer 

more delinquent child support obligations to TOP have resulted in referrals exceeding 

$68 billion as of September 30, 2001, a 66 percent increase in referrals from September 

30, 1998. 

• As of September 30, 2001, $28.8 billion, or 92 percent, of the amount of Federal 

debts eligible for referral for offset has been referred, up from the 86 percent of 

eligible debts referred as of September 30, 2000. Referrals of state income tax debts 

rose by nearly $2 billion, an increase of 600 percent from the end of FY 2000. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 11

FEDERAL AGENCIES 

3. Collections 

• Total collections through TOP were $3.12 billion in FY 2001. Since enactment of the 

DCIA in April 1996, $12.1 billion has been collected through TOP. The chart below 

summarizes collections through TOP for the last four fiscal years. 

Collections Through TOP In Millions of Dollars 

Type of Collection FY 1998 FY 1999 FY 2000 FY 2001 

Administrative Offset* $4 $6 $17 $25 

Tax Refund Offset – Child Support 

(excluding tax rebates) 

$1,165 $1,343 $1,389 $1,377 

Tax Refund Offset – Federal Nontax 

Debt 

$864 $1,259 $1,167 $1,147 

Tax Refund Offset – State Income 

Tax Debt (excluding tax rebates) 

N/A N/A $23 $79 

Tax Refund Offset – Tax Rebates N/A N/A N/A $471 

Continuous Tax Levy N/A N/A $0.01 $16 

Total Collected $2,033 $2,608 $2,597** $3,117** 

(excluding tax rebates) 

*Collection of Federal nontax debts and child support debts by offsetting Federal 

nontax payments. 

**Numbers do not add correctly due to rounding. 

• Total collections in FY 2001 increased significantly as a result of offsets of Advanced 

Refund Credit Payments (i.e., tax rebates) which totaled $471 million in FY 2001. 

Offsets of tax rebates were $263.9 million for child support obligations, $191.5 

million for Federal nontax debts, and $15.3 million for state tax debts. 

• Administrative offset collections significantly increased in the last two fiscal years. 

Collections are expected to continue to increase in FY 2002 as a result of the inclusion 

of Social Security payments in TOP to collect Federal nontax debt beginning May 2001. 

• Tax refund offset collections (not including tax rebates) for both child support debts and 

Federal nontax debts have remained relatively constant over the last three fiscal years. 

The large increase in collections beginning in FY 1999 is due to the efficiencies and 

improvements realized in the merger of tax refund offset into the TOP process beginning 

January 1999. 

• In fiscal year 2001, total TOP collections for delinquent child support obligations from 

both tax and non-tax payments were $1.64 billion, an increase of $250 million over 

fiscal year 2000 collections. Delinquent child support obligations are currently matched 

against tax refund payments, Treasury-disbursed vendor payments and Office of 

Personnel Management civil service retirement payments. FMS has initiated a phasedin centralized federal salary offset program as part of TOP, and federal salary payments 

are now available for collection of delinquent child support obligations through TOP. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 12

FEDERAL AGENCIES 

• Total collections of state income tax debts by offsetting Federal tax refunds (including 

offsets of tax rebates) quadrupled to $94.5 million in FY 2001. 

• Collections under Continuous Tax Levy, which began in July 2000, totaled $16.5 

million in FY 2001, a substantial increase from the $98,300 collected in FY 2000. The 

Internal Revenue Service (IRS) maintains control over which Federal tax debts can be 

collected through the levy process. Most debts referred to FMS for Continuous Tax 

Levy are referred for the purpose of matching with payment data, but have not been 

activated by IRS for collection. 

C - Cross-Servicing 

1. Description 

• Cross-servicing is the process whereby agencies refer Federal nontax debts more than 

180 days delinquent to FMS for collection. Treasury applies a variety of collection 

tools once agencies refer their debts. Collection tools include: (1) Treasury demand 

letters; (2) telephone calls to debtors; and (3) referral of debts to TOP, credit bureaus, 

one or more of the PCAs on Treasury's contract, and DOJ for litigation. 

• In FY 2001, FMS added administrative wage garnishment (AWG) as a debt 

collection tool available to Federal agencies through cross-servicing. AWG has a 

great potential for increasing collections, and FMS will be encouraging Federal 

agencies to authorize the use of this debt collection tool through cross-servicing. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 13 FEDERAL AGENCIES 

2. Referrals CROSS-SERVICING REFERRALS 

• The calculation of the amount of 

debts eligible for referral is described 

in this report in Section II A-3, above. 

Historically, the calculation for crossservicing referrals was cumulative 

from the beginning of the program. 

As of March 31, 2001, the calculation 

of cross-servicing referrals has been 

modified/reduced to exclude those 

debts no longer actively collected. 

$6.8 $6.4 $6.9 

$2.9 $4.6 $5.1 

$0.0 

$2.0 

$4.0 

$6.0 

$8.0 

$10.0 

Dollars in 

Billions 

Eligible for 

Referral 

$6.8 $6.4 $6.9 

Referred by 

End of FY 

$2.9 $4.6 $5.1 

FY 1999 FY 2000 FY 2001 

• Referral rates of eligible debt have continually increased over the last three fiscal 

years from 43 percent at the end of FY 1999 to 74 percent at the end of FY 2001. 

3. Collections CROSS SERVICING & PRIVATE COLLECTION 

• Since1997, FMS and the PCAs have 

brought in $130.1 million in 

collections. 

• In FY 2001, FMS and its PCAs 

collected a total of $56.8 million, an 

increase of $15.7 million (38 percent) 

over FY 2000 collections. 

D - Litigation at the Department of Justice 

1. Description 

$ DOJ serves as the Federal government’s “collector of last resort.” When a Dollars in Millions 

$8.5 

$14.9 

$10.9 

$21.8 

$8.4 

$18.6 

$27.8 

$10.4 

$0.0 

$20.0 

$40.0 

$60.0 

AGENCY (PCA) 

TOP N/A $8.4 $10.4 

PCA $14.9 $21.8 $27.8 

FMS $8.5 $10.9 $18.6 

FY 1999 FY 2000 FY 2001 

COLLECTIONS 

Federal agency cannot collect a debt administratively using debt collection tools 

such as those available under the DCIA, the agency may refer the debt to DOJ to 

pursue enforced collection through the courts. 

$ With judicial oversight, DOJ enforces collection by seizing bank, stock and 

similar accounts from debtors, garnishing a higher percentage of debtors’ wages 

than AWG allows, and by seizing and selling debtor-owned real estate and other 

property in some cases. The courts can also assist in establishing and enforcing 

payment arrangements for some debtors. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 14

FEDERAL AGENCIES 

$ DOJ incorporates administrative debt collection tools such as TOP into the array 

of litigation tools available to enforce the collection of debts. 

$ DOJ supplements its litigation resources by contracting with private counsel in 15 

judicial districts, and it plans to expand this program to additional districts in the 

future. 

2. Referrals 

$ Federal creditor agencies 

determine when to refer debts to 

DOJ. Both the numbers of debts 

referred and their value vary 

greatly from year to year for this 

reason. 

$ Debt referrals vary greatly in 

amount, complexity and 

collectibility. Referrals include 

loans with clear debtor liability 

as well as multi-jurisdictional 

fraud cases that require extensive 

investigation over a period of 

years to be resolved. 

Fiscal 

Year 

Total Civil 

Referrals- new 

debts opened 

Value of New 

Debts 

(in Billions) 

1997 45,592 $1.1 

1998 44,876 $2.8 

1999 88,228 $2.8 

2000 50,572 $5.6 

2001 24,357 $5.4 

CASH COLLECTIONS FROM CIVIL LITIGATION 

3. Collections AT DOJ 

$4.0 

$ The amount DOJ collects in 

any fiscal year includes $3.0 

recoveries for debt referred 

in prior fiscal years. $2.0 

• DOJ has collected $10.7 $1.0 

billion from civil litigation 

over the last five fiscal $0.0 

$2.0 

$1.2 $1.5 

$3.1 $2.9 

years. FY FY FY FY FY 

1997 1998 1999 2000 2001 

$ DOJ has placed a greater emphasis on using its own litigation resources in recent 

years to pursue those who defraud America’s taxpayers. Much of the increase in 

the amounts collected by DOJ in recent years reflects the success of these efforts. 

• More than 50 percent of the funds DOJ collects are received as electronic fund 

transfers. DOJ also accepts credit card payments and payments in foreign currency. 

In FY 2001, DOJ implemented a new program called EZPay that debits debtor bank 

accounts on a schedule authorized by the debtor. Dollars in Billions 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 15 FEDERAL AGENCIES 

IV – SPECIFIC AGENCY ACTIVITIES 

A - Education Student Loans 

• Since November 1998, Treasury has exempted student loan debts collected at 

Education from the mandatory transfer to Treasury for cross-servicing, based on 

Education’s demonstrated expertise in collecting student loan debts. The Office of 

Postsecondary Education debt collection activities are centralized in the Debt 

Collection Service (DCS); and the DCS utilizes the full range of debt collection tools 

outlined in the DCIA and Education’s own statutes. 

• Total defaulted student loan receivables serviced by Education have increased from 

$9.7 billion FY 1998 year-end to $11.9 billion FY 2001 year-end. Total delinquencies 

have increased from $9.2 billion FY 1998 year-end to $10.95 FY 2001 year-end, and 

collections have increased dramatically from $720 million in FY 1998 to $1.4 billion 

in FY 2001. 

Education’s Use of Debt Collection Tools 

Collection Tools 

FY 1998 

Collections 

(in 

millions) 

FY 1999 

Collections 

(in 

millions) 

FY 2000 

Collections 

(in 

millions) 

FY 2001 

Collections 

(in 

millions) 

Private Collection 

Agency $96 $191 $228 $229 

Litigation (DOJ) $13 $19 $25 $30 

Internal Offset $7 $5 $4 $3 

AWG (at agency and 

PCAs) $47 $71 $110 $134 

Treasury Offset $275 $505 $431 $450 

Other at Agency $103 $83 $65 $64 

Total Loan 

Consolidations (at 

agency and at PCAs) 

$172 $336 $389 $464 

• TOP remains Education’s most effective debt collection tool. Education relies heavily 

on PCAs and refers every eligible debt as quickly as practicable to one of its 

seventeen PCAs. Education effectively uses administrative wage garnishment 

(AWG) to collect debts, primarily through its PCAs that collected $122 million of the 

$134 million collected through AWG in FY 2001. Education also uses loan 

consolidations to further reduce delinquencies. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 16 FEDERAL AGENCIES 

• Collections by PCAs and through the use of AWG have steadily increased over the 

last four years. Regarding PCAs, Education also tracks collection costs as a percent 

of collections. These costs have shown a declining trend from 19 percent in FY 1998 

to 16.9 percent in FY 2001. 

• Education has successfully implemented a matching program with HHS and the 

National Directory of New Hire Database that, for FY 2001, resulted in the capture of 

new debtor location information on over 500,000 accounts that led to an additional 

$150 million in student loan recoveries. 

B - SBA and HUD Loan Asset Sales 

Small Business Administration Dept. of Housing and Urban 

Fiscal Year Development

Unpaid 

Principal 

Balance 

Gross 

Proceeds 

Unpaid 

Principal 

Balance 

Gross 

Proceeds 

1999 $332 million $195 million 0 0 

2000 $1.2 billion $530 million $480 million $ 467 million 

2001 $2.4 billion $1.55 billion $623 million $432 million 

TOTALS $3.9 billion $2.2 billion $1.1 billion $899 million 

• SBA and HUD have established loan asset sales programs to sell performing and 

nonperforming loans to the public. SBA’s asset sales program has included the sale 

of direct loans and defaulted guaranteed loans. HUD’s Federal Housing 

Administration is taking action to sell HUD’s entire inventory of single family and 

multifamily mortgage notes held by the Secretary of HUD. 

• Over the last three fiscal years, SBA and HUD have sold $5 billion in loan assets and 

collected $3.1 billion in gross proceeds from these sales. Each sale has resulted in the 

collection of more than the estimated value of holding the loan assets to maturity. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 17

FEDERAL AGENCIES 

APPENDIX I: FEDERAL RECEIVABLES AND DELINQUENT DEBT 

The table below presents the ending balances, collections, write-offs, delinquencies, and 

delinquencies greater than 180 days for the credit agencies with the highest ending 

balances at the end of FY 2001. The table groups all other agencies into a single 

category. At the end of FY 2001, more than 93 percent of the receivables belonged to the 

12 agencies listed in the tables below. The balance is owed to the remaining 52 agencies 

(grouped into the “all other” category). 

Federal Receivables and Delinquent Debt 

as of September 30, 2001 

(Dollars in Millions) 

Agency Ending 

Balance 

Collections Writeoffs Delinquencies Delinquencies 

> 1801 

Currently 

Not 

Collectible 

USDA $103,170 $20,879 $4,351 $6,222 $5,860 $537 

Education $83,199 $9,353 $629 $19,203 $9,866 $13,114 

HUD $12,788 $5,638 $144 $1,249 $1,069 $0 

EXIM $12,359 $1,908 $22 $4,360 $2,193 $0 

SSA $11,437 $2,383 $941 $1,066 $536 $7,025 

HHS $10,828 $14,433 $645 $5,680 $4,978 $2,696 

AID $9,729 $884 $1 $691 $670 $0 

Energy $6,773 $4,895 $33 $2,291 $2,223 $0 

FCC $6,646 $5,627 $33 $5,265 $5,102 $33 

SBA $5,389 $3,799 $542 $1,437 $1,416 $173 

DoD $4,997 $11,486 $685 $3,078 $2,517 $34 

VA $3,797 $2,268 $206 $1,406 $1,112 $0 

All Other $18,392 $26,151 $244 $4,275 $2080 $109 

Gov’t 

Total $289,504 $109,704 $8,476 $56,223 $41,423 $23,721 

Amounts reported as write-offs represent the dollar amount of uncollectible receivables 

written off during FY 2001. 

“Currently Not Collectible” (CNC) represents the dollar amount of all debts which have 

been written off by the agency but not yet closed out. Debts classified as CNC for any 

reporting period continue to be reported in that category in subsequent reporting periods 

until closed out. 

1

 Does not include delinquencies reported as Currently Not Collectible. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 18 FEDERAL AGENCIES 

APPENDIX II: SOURCES OF DATA 

Data contained in this report was obtained from the following sources: 

Part II – Government Debt Portfolio, Collection and Write-offs and 

Appendix I 

Source – Treasury Report on Receivables Due From the Public – Fourth Quarter 

2001, as reported by Federal agencies to the Department of the Treasury. 

Part III – Government-Wide Collection Activities 

A – Use of Private Collection Agencies 

Sources – Department of Education, Debt Collection Service 

Department of the Treasury, Financial Management Service 

Department of Health and Human Services, Program Support Center 

B & C – Treasury Offset Program and Cross-Servicing 

Source – Department of the Treasury, Financial Management Service 

D – Litigation at the Department of Justice 

Source – Department of Justice, Office of Debt Collection Management 

Part IV – Specific Agency Activities 

A – Education Student Loans 

Source - Department of Education, Debt Collection Service 

B – SBA and HUD Loan Asset Sales 

Sources – U.S. Small Business Administration 

Department of Housing and Urban Development