FISCAL YEAR 2010 REPORT

TO THE CONGRESS

U.S. GOVERNMENT RECEIVABLES 

AND 

DEBT COLLECTION ACTIVITIES 

OF FEDERAL AGENCIES 

Department of the Treasury

March 2011
FISCAL YEAR 2010 REPORT TO THE CONGRESS 

U.S. GOVERNMENT RECEIVABLES AND 

DEBT COLLECTION ACTIVITIES 

OF 

FEDERAL AGENCIES 

I - EXECUTIVE SUMMARY ..................................................................................................................... 1

A - STATUTORY REQUIREMENT TO REPORT ................................................................................................ 1

B - SCOPE OF REPORT.................................................................................................................................. 1

C - SUMMARY ............................................................................................................................................. 2

D – LEGISLATIVE AGENDA : FMS ................................................................................................................ 3

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND WRITE-OFFS............................. 4

A - FISCAL YEAR-END DATA ...................................................................................................................... 4

1. Receivables and Delinquencies..................................................................................................... 4

2. Write-offs....................................................................................................................................... 7

3. Interest, Penalties and Costs......................................................................................................... 7

B - REFERRAL TO TREASURY UNDER THE DCIA......................................................................................... 8

III - GOVERNMENTWIDE DELINQUENT DEBT COLLECTION ACTIVITIES............................ 9

A - TREASURY OFFSET PROGRAM (TOP) .................................................................................................... 9

1. Description..................................................................................................................................... 9

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

3. Collections FY 2006 – FY 2008 .................................................................................................. 10

4. Collections - FY 2009 – FY 2010 .............................................................................................. 11

B - CROSS-SERVICING ............................................................................................................................... 12

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

2. Referrals....................................................................................................................................... 12

3. Collections..................................................................................................................................... 12

C – HHS’S DEBT COLLECTION CENTER .................................................................................................... 13

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

2. Referrals to PSC.......................................................................................................................... 13

3. Collections by PSC ...................................................................................................................... 13

D - LITIGATION AT THE DEPARTMENT OF JUSTICE (DOJ) ......................................................................... 14

1. Description................................................................................................................................... 14

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

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

E - EDUCATION STUDENT LOANS.............................................................................................................. 15

F - USE OF PRIVATE COLLECTION AGENCIES (PCAS) ............................................................................... 17

1. Description................................................................................................................................... 17

2. Referrals....................................................................................................................................... 17

3. Collections ................................................................................................................................... 18

APPENDIX I: FEDERAL RECEIVABLES AND DELINQUENT DEBT........................................... 19

APPENDIX II: SOURCES OF DATA ..................................................................................................... 20
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

1

I - EXECUTIVE SUMMARY

A - STATUTORY 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. This report includes information that the agency heads provide to the Secretary 

on the status of their accounts receivables, loans, and delinquent debts. 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 

the Treasury Report on Receivables and Debt Collection Activities (TROR). It includes 

information about receivables, collections on receivables, delinquencies, collections on 

delinquencies, and write-offs. 

As a point of clarification, receivables and delinquencies as reported on the TROR do not 

include debts that have been written-off. Debts that are written-off are classified as either 

Currently-Not-Collectible (CNC) or as closed out in the TROR. Though written-off and 

not counted as receivables or delinquencies in the TROR, debts that are classified as 

CNC are included when determining eligibility for mandatory referral to Treasury for 

offset and Cross-Servicing. See Referral to Treasury Under the DCIA, Part II, Section B 

of this report. 

This report also summarizes key governmentwide 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 by certain 

Federal agencies. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

2

C - SUMMARY

 Since the enactment of the DCIA in April 1996, through September 30, 2010, more 

than $47.9 billion has been collected to pay delinquent debts through Treasury’s 

Financial Management Service’s (FMS) Treasury Offset Program (TOP) and CrossServicing Program (Cross-Servicing). 

 Total collections by FMS on delinquent debts through TOP and Cross-Servicing, 

exclusive of the amount collected from offset of the payments made under the 

American Recovery and Reinvestment Act (ARRA), were $5.44 billion in FY 2010. 

This is the highest amount collected by FMS in a single fiscal year since FMS began 

governmentwide delinquent debt collection programs in 1996. Annual collections 

through these programs have averaged over $4.2 billion during the last five years. An 

additional $14.5 million was collected through TOP from the 2010 economic 

recovery payments for an FMS FY 2010 total of $5.45 billion. 

 

 In FY 2010, the Department of Justice (DOJ) collected $4.8 billion in cash recoveries 

on delinquent debts owed to Federal agencies through its civil litigation program. 

DOJ has collected a total of $17.1 billion through civil litigation in the last five fiscal 

years. 

 In FY 2010, private collection agencies (PCAs) under contract with the Department 

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

FMS had referrals of $35.9 billion in delinquent Federal debt. In FY 2010, these 

PCAs collected $777 million. Student Loan consolidations and rehabilitations 

arranged by PCAs for Education in FY 2010 accounted for an additional $1.7 billion 

reduction of delinquent debt. 

 The Federal Government collected $226.4 billion in FY 2010 on all of its non-tax 

receivables. See Appendix I, Federal Receivables and Delinquent Debt.
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

3

D – LEGISLATIVE AGENDA : FMS

Five proposals to enhance FMS’s debt collection program were contained in the 

President’s 2011 budget: 

1. Authorize the levying of Federal vendor payments to collect Federal tax liabilities 

under the Federal Payment Levy Program prior to the completion of collection 

due process; 

2. Authorize IRS to levy 100% of all vendor payments, including payments for the 

purchase and lease of real estate, to collect delinquent taxes (technical correction). 

3. Authorize the offset of Federal income tax refunds to collect delinquent State 

income taxes for debtors who currently reside in other States; 

4. Authorize the offset of Social Security Administration, Railroad Retirement 

Board, and Black Lung benefits to collect delinquent child support payments; and 

5. Authorize FMS to deduct its fee from amounts collected from tax levies rather 

than the fee coming to FMS out of IRS's appropriation; 

In addition, included in the Department of Labor section of the 2011 budget was a 

proposal to authorize FMS to offset Federal tax refunds to collect all past due, legally 

enforceable State unemployment compensation debts (whether or not resulting from 

fraud). 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

4

0%

50%

100%

Distribution of Receivables and Delinquencies 

as of 9/30/10

Administrative Debt * $79.8 $1 7.7

Defaulted Guarateed

Loans **

$55.6 $4 0.6

Direct Loans $490.3 $4 5.2

Receivables in 

Billio ns

Delinquencies 

in Billions

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND 

WRITE-OFFS

A - FISCAL YEAR-END DATA

1. Receivables, Collections on Receivables, and Delinquencies 

 The FY 2010 total receivables of $625.8 billion represented an increase of 

$100.8 billion from the previous year, and total delinquencies of $103.6 billion 

represented a decrease of $3.7 billion. 

 At the end of FY 2010, Federal loan programs (direct and guaranteed) comprised 

88 percent of total receivables, up from 86 percent at the end of FY 2009. Federal 

loan program delinquencies comprised 83 percent of total delinquencies, down from 

87 percent at the end of FY 2009. 

$164.4 $159.6 $171.4

$222.8 $226.4

$0

$50

$100

$150

$200

$250

$300

Dollars in Billions

2006 2007 2008 2009 2010

Fiscal Year

TOTAL COLLECTIONS ON RECEIVABLES

$318.8 $339.6 $366.6

$525

$625.8

$0

$100

$200

$300

$400

$500

$600

$700

Dollars in Billions

2006 2007 2008 2009 2010

Fiscal Year

TOTAL RECEIVABLES

*Examples: Fines, penalties and overpayments. 

**Receivables amount includes rehabilitated loans. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

5

Note: Federal loan programs are authorized when private sector credit is unavailable or 

inadequate, and a Federal objective is to be achieved. Accordingly, Federal loan 

receivables occur in programs that serve the public interest and are of relatively high risk 

of default. 

 The two agencies with the largest total receivables at the end of FY 2010 were 

Education with $370.7 billion and the Department of Agriculture (USDA) with $112 

billion. Receivables from these two agencies comprise 78 percent of the 

Government’s total receivables (Education at 60 percent and USDA at 18 percent). 

 Two Education programs accounted for most of the agency’s receivables: Federal 

Direct Student Loans ($230.2 billion) and Defaulted Guaranteed Student Loans 

($35.9 billion). 

 Five program areas of the USDA accounted for over $107 billion of its receivables: 

Rural Electric & Telephone Revolving Fund ($44.2 billion), Rural Housing Insurance 

Fund ($27.4 billion), Rural Development Insurance Fund ($14.7 billion), Commodity 

Credit Corporation ($13.1 billion) and Farm Service Agency ($8.1 billion). 

Comments on Receivables Data 

 Contributing to the FY 2010 increase in total receivables were a $76.8 billion increase 

at Education and a $7.4 billion increase at the Department of Housing and Urban 

Development (HUD). Education’s direct student loan portfolio has grown 

significantly over the last several years and this trend is continuing. That portfolio 

has increased from $71.8 billion at the end of FY 2001 to $230.2 billion at the end of 

FY 2010, and by $73.4 billion in FY 2010 alone. The HUD increase was due, in part, 

to the rise in defaults on mortgages contained in securities guaranteed by the 

Government National Mortgage Association (Ginnie Mae). 

 Collections Note: Education breaks out its loan consolidations from the amount it 

reports as Collections on Receivables in the TROR. Previously, Education had 

reported those consolidations with collections because it considers them to be 

collections, pursuant to its regulations. Therefore, Education’s consolidations have 

been added to its collections in this report to arrive at the total agency and 

governmentwide collections amount. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

6

Additional Delinquent Debt Data

 In spite of the increase in total 

receivables, there was a 

$3.6 billion, or 4 percent, decrease 

in delinquencies, to a total of 

$103.6 billion. The chart to the 

right provides the breakdown, in 

billions, of those delinquencies by 

age. 

 

 At the end of FY 2010, 

$90.5 billion (88 percent) of the 

Government’s delinquent debts 

were distributed among five 

agencies: Education, the Small Business Administration (SBA), the Department of 

Defense (DOD), the Social Security Administration (SSA), and USDA, as shown in 

the following table: 

 

 

 

 

Delinquencies (in billions) 

Agency FY 2010 

% Change 

from 

FY 2009 

Education $71.5 +29%

SBA $5.9 +42%

DOD $5.2 +10%

SSA $4.2 +5%

USDA $3.7 +5%

TOTAL OF ABOVE $90.5 +26%

TOTAL GOV’T $103.6 -4%

0 %

20%

40%

60%

80%

100 %

Aging of Government-wide Delinquencies 

> 10 yrs $9.2 $9.6 $11.4 $9.2 $11.3

6 -1 0 yrs $4.7 $5.0 $6.1 $4.5 $5.6

2 -6 yrs $12.3 $12.0 $12.7 $20.5 $22.9

1 81 days-2 y rs $18.1 $18.6 $23.2 $24.1 $29.7

1 -1 80 days $20.6 $19.6 $21.1 $48.9 $34.3

2006 2007 2008 2009 2010
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

7

$10.1

$6.4

$9.4

$9.6

$11.4

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Dollars in Billions

2006 2 007 2008 2009 2010

Fiscal Year

TOTAL WRITE-OFFS

2. Write-offs 

 Total write-offs in FY 2010 increased 

from FY 2009 by $1.8 billion, or 19%. 

 The Office of Management & Budget 

(OMB) monitors the Federal program 

agencies’ write-off policies and 

practices (See OMB Circular No. A129). Also, FMS has published 

guidance on write-off and provides 

ongoing training to the agencies on the 

topic. 

 While OMB guidance generally

requires write-off when debts are two years delinquent, agencies do not write off 

debts when material collections can be documented to occur after two years. 

 The largest increases in write-offs were at the Department of the Treasury, up $1.6 

billion, primarily in its Automotive Industry Financing Program, and the Federal 

Trade Commission, up $1.1 billion, due to its classification of a large segment of its 

delinquent debt portfolio as Currently Not Collectible. 

3. Interest, Penalties and Costs 

Agencies charge interest, penalties and administrative costs on receivables in accordance 

with applicable loan documents and statutory requirements. See, e.g., 31 U.S.C. §3717. 

Of the $625.8 billion in receivables at the end of FY 2010, $20.6 billion represents 

unpaid interest, penalties and administrative costs. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

8

$0

$20

$40

$60

$80

$100

In Billions

 Debts Required to be Referred to Treasury

Starting Amount $69.8 $61.6 $71.7 $83.3 $97.7

TOP $35.5 $35.6 $44.8 $49.8 $60.2

Cross-Servicing $10.0 $9.6 $10.9 $12.4 $17.6

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

B - REFERRAL TO TREASURY UNDER THE DCIA

 The DCIA specifically mandates that Federal agencies refer non-tax debts more than 

180 days delinquent to Treasury for collection through its Treasury Offset (TOP) 

and/or Cross-Servicing programs. 

Certain debts are not eligible for referral to Treasury for either TOP or CrossServicing. Debts that are ineligible for both TOP and Cross-Servicing include those 

under appeal or in forbearance, litigation, foreclosure, or bankruptcy. Debts owed by 

foreign sovereigns are exempt from both TOP and Cross-Servicing. Additional 

exemptions from Cross-Servicing include debts at PCAs, debts being collected by 

internal offset, and debts exempted from Cross-Servicing by Treasury. In the chart 

below, these ineligible and exempt debts are subtracted from the “Starting Amount,” 

which is comprised of debts more than 180 days delinquent including those classified 

as Currently-Not-Collectible, to determine the debts required to be referred for TOP 

offset and Cross-Servicing. 

 As of the end of FY 2010, debts required to be referred to TOP increased by $10.4 

billion, and debts required to be referred to Treasury for Cross-Servicing increased by 

$5.2 billion from FY 2009, as reported by the agencies in the TROR. FMS and the 

agencies continue to work cooperatively to confirm the accurate reporting of these 

debts. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

9

III - GOVERNMENTWIDE DELINQUENT DEBT COLLECTION 

ACTIVITIES

A - TREASURY OFFSET PROGRAM (TOP) 

1. Description

Offset

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

debtor’s overdue Federal non-tax debt, child support obligation, and/or State debt. 

Offset referrals and collections are indicated in the chart and tables on the next two pages. 

For FY 2010, the collections are broken out between total amounts collected, which 

include amounts collected by offset of the economic recovery (ERP) payments authorized 

by the ARRA, and amounts collected from offset of other payments. 

Reciprocal Offset Agreements with States 

Under a provision in the DCIA, Treasury and the States are authorized to enter into 

reciprocal agreements to collect each other's debts. Under these agreements, Treasury 

can collect unpaid State debt by offsetting Federal non-tax payments, and States can 

collect delinquent Federal non-tax debt by offsetting State payments. Four States, New 

York, Maryland, New Jersey, and Kentucky have signed such agreements with Treasury 

and are participating in the program. Several other States have expressed interest in the 

program. 

Federal Payment Levy Program 

The Federal Payment Levy Program (FPLP) is the program whereby delinquent Federal 

income tax debts are collected by levying non-tax payments, as authorized by the 

Taxpayer Relief Act of 1997. Continuous tax levy collections are indicated in the table 

on the next page. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

10

$37.48

$88.31

$ 6. 13

$13 9.71

$45.05

$92.89

$7.92

$ 156 .4 1

$ 49 .18

$ 100 .10

$ 10.33

$ 171. 59

$6 7.16

$10 7.86

$9.55 $2.06

$ 186 .11

$94.54

$110 .16

$11. 45 $2 .18

$203.90

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

Dollars in Billions

TO TAL DEBT REFERRALS TO THE TREASURY O FFSET PRO GRAM

Federal Tax $139.71 $156.41 $171.59 $186.11 $203.90

O ther State Debt N/A N/A N/A $2.06 $2.18

State Income Tax $6.13 $7.92 $10.33 $9.55 $11.45

Child Support $88.31 $92.89 $100.10 $107.86 $110.16

Federal Nontax Debt $37.48 $45.05 $49.18 $67.16 $94.54

Sep. 2006 Sep. 2007 Sep. 2008 Sep. 2009 Sep. 2010

2. Referrals 

3. Collections FY 2006 – FY 2008 (In Millions) 

Type of Collection FY 2006 FY 2007 FY 2008 

Without 

Stimulus 

Administrative Offset* $144 $187 $244 

Tax Refund Offset – Child 

Support $1,582 $1,696 $1,989 

Tax Refund Offset – Federal 

Non-tax Debt $989 $1,195 $1,373 

Tax Refund Offset – State 

Income Tax Debt $216 $219 $289 

Continuous Tax Levy $303 $343 $400 

Total Collected $3,234 $3,640 $4,295 

 

*Offset of nontax payments (i.e., payments other than tax refunds) to collect 

delinquent State and Federal debts. 

NOTE: This table does not include collections made in the State Reciprocal Offset 

Program (Other State Debt), which was implemented at the end of FY 2008. This data is 

presented in a separate FY 2009-10 table on the next page.

$271.6

$302.2

$331.2

 $422.2 

$372.7 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

11

4. Collections - FY 2009 – FY 2010 (In Millions) 

Type of Collection FY 2009 

Without 

Stimulus or 

ERP 

FY 2010 

With 

ERP* 

FY 2010 

Without 

ERP 

Administrative Offset – Child 

Support $5 $8.3 $5.7 

Administrative Offset – 

Federal Non-tax Debt $299 $312.8 $306.2 

Administrative Offset – State 

Income Tax Debt $7 $9.1 $6.9 

Administrative Offset – Other 

State Debt (Reciprocal 

Program) 

$8 $7.4 $4.3 

Administrative Offset – 

Continuous Tax Levy $497 $617.9 $617.9 

Tax Refund Offset – Child 

Support $2,042 $2,086 $2,086 

Tax Refund Offset – Federal 

Nontax Debt $1,385 $1,852 $1,852 

Tax Refund Offset – State 

Income Tax Debt $363 $435.1 $435.1 

Total Collected 

$4,586 $5,328 $5,314 

* TOP collections, including administrative offset of the Economic Recovery payments 

(ERP) disbursed under the American Recovery and Reinvestment Act. ERP payments 

are not offset by Continuous Tax Levy or Tax Refund Offset. Therefore, those amounts 

are the same in both FY 2010 columns. 

NOTE: “Administrative Offset – Federal Non-tax Debt” includes collections in the 

amount of $12.4 million of Federal non-tax debt by States under the Federal-State 

Reciprocal Offset Program. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

12

CROSS-SERVICING REFERRALS

$17.7

$8.1 $9.3

$11.5

$13.9

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

Dollars in 

Billions

$8.1 $9.3 $11.5 $13.9 $17.7

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

$25.3

$78.2

$28.0

$20.5

$74.6

$36.1

$27.3

$82.8

$69.8

$60.7

$132.1

$116.5

$32.9

$90.3

$79.2

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

Dollars in Millions

CROSS-SERVICING & PRIVATE COLLECTION 

AGENCY (PCA) COLLECTIONS 

TOP $28.0 $36.1 $69.8 $116.5 $79.2

PCA $78.2 $74.6 $82.8 $132.1 $90.3

DMS $25.3 $20.5 $27.3 $60.7 $32.9

FY 

2006

FY 

2007

FY 

2008

FY 

2009

FY 

2010

B – TREASURY CROSS-SERVICING 

1. Description 

Cross-Servicing is the process whereby agencies refer delinquent Federal non-tax debts 

to FMS’s Debt Management Services (DMS) for collection. Treasury utilizes a variety of 

collection tools once agencies refer their debts. Collection tools include Treasury 

demand letters, telephone calls to debtors, referral of debts to TOP, credit bureau 

reporting, use of PCAs, referral of debts to DOJ for litigation, and administrative wage 

garnishment (AWG). The total collected in FY 2010 was $202,590,191. 

2. Referrals 

3. Collections 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

13

$1.80 $1.79 $1.81 $1.60 $1.42

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Dollars in billions

Referrals to PSC

$1.80 $1.79 $1.81 $1.60 $1.42

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

$463.2

$351.4

$291.5 $353.20 $401.0

$0.0

$200.0

$400.0

$600.0

$800.0

Dollars in Millions

PSC Collections

$463.2 $351.4 $291.5 $353.20 $401.0 

FY 

2006

FY 

2007

FY 

2008

FY 

2009

FY 

2010

C – HHS’S DEBT COLLECTION CENTER 

1. Description 

The Program Support Center (PSC), Debt Collection Center, established in 1995, is a 

component within HHS that collects debts on a fee-for-service basis for 11 different 

agencies within HHS and several agencies outside of HHS. PSC receivables do not 

include amounts totaling in excess of $6.8 billion referred to Treasury for CrossServicing. The PSC serves as the HHS conduit for referrals to Treasury for both TOP 

and Cross-Servicing. Collections since inception of the PSC debt collection program 

have totaled in excess of $5 billion. 

2. Referrals to PSC 

3. Collections by PSC 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

14

$3.6

$3.0 $2.8 $2.9

$4.8

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Dollars in Billions

FY

2006

FY

2007

FY

2008

FY

2009

FY

2010

CASH COLLECTIONS FROM CIVIL LITIGATION 

AT DOJ 

D - LITIGATION AT THE DEPARTMENT OF JUSTICE (DOJ) 

1. Description 

When a 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. FMS’s Cross-Servicing Program also has the 

option to refer agency debts to DOJ. 

2. Referrals 

3. Collections

Fiscal 

Year 

Total Civil 

Referrals - new 

debts opened 

Value of New 

Debts 

(in billions) 

2006 7,913 $6.1 

2007 9,718 $5.0 

2008 11,559 $3.8 

2009 11,088 $5.2 

2010 11,531 $7.6 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

15

E - EDUCATION STUDENT LOANS

 Since November 1998, Treasury has exempted student loan debts owed to the 

Department of Education from mandatory transfer to Treasury for Cross-Servicing, 

based on Education’s demonstrated expertise in collecting those debts. Federal 

Student Aid debt collection activities at Education are centralized in its Default 

Resolution Group (DRG). DRG services Education's defaulted student loans (loans 

delinquent more than 270 days). Additionally, DRG collects on student grant 

overpayments, although they represent a relatively small amount of DRG’s total 

delinquent debt portfolio. Once a loan reaches default status, use of the full range of 

debt collection tools, outlined in Education’s own statutes and the DCIA, is 

authorized. Education also uses thirty-three Guaranty Agencies (GAs), 

intermediaries between it and the many lending institutions, to collect defaulted loans 

in the Federal Family Education Loan Program (FFELP). By statute and regulations, 

GAs use the same tools as DRG. 

 Total defaulted student loan receivables (principal and interest) serviced by DRG and 

the GAs have increased from $32.9 billion at FY 2006 year-end to $57.9 billion at 

FY 2010 year-end; and collections have increased from $6.295 billion in FY 2006 to 

$10.240 billion in FY 2010. 

Education’s Use of Debt Collection Tools 

(Rounded to the Nearest Million)

Collection Tools FY 2006 

Collections 

FY 2007 

Collections

FY 2008 

Collections

FY 2009 

Collections 

FY 2010 

Collections 

Private Collection Agency 

(PCA) $410 $368 $376 $318 $300

PCA - AWG $241 $271 $296 $317 $339

PCA - Consolidations $196 $155 $212 $367 $367

PCA - Rehabilitations $902 $1,252 $1,406 $1,348 $1,347

Litigation (DOJ) $16 $13 $11 $9 $8.9

Internal Offset $.3 $.1 $.1 $.1 $.1

AWG – Includes DRG and GAs $341 $435 $522 $607 $621

Treasury Offset – Includes 

DRG and GA $671 $844 $1,374 $1,120 $1,408

Other Tools at Education – 

Includes DRG and GAs $619 $643 $704 $718 $736

Total Loan Consolidations – 

Includes DRG and GAs $1,628 $1,168 $1,360 $1,930 $2,039

Total Loan Rehabilitations – 

includes DRG and GAs $1,269 $1,771 $2,315 $2,018 $3,127

 The totals for each of the PCA categories include debts from the DRG portfolio only. 

Education does not require GAs to report the amounts collected by PCAs, 

specifically. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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 The Internal Offset numbers in the above table represent the remaining collections 

through Education’s former Federal Employee Salary Offset Program. DRG now 

participates in the TOP Federal Salary Offset program, so this will be the last year 

that this category is reported in the Education section. 

 Recoveries from TOP increased by 29 percent, from FY 2009 to FY 2010. Education 

works with its GAs to ensure all eligible debts are certified in the TOP process in 

order to increase the use of this tool. 

 Education still relies heavily on PCAs and refers every eligible debt as quickly as 

possible to one of its 22 PCAs. As a last resort, Education uses AWG to collect its 

debts, primarily through its PCAs. 

 The FY 2010 consolidation increase followed from the increase in the overall loan 

portfolio. 

 Rehabilitation of a loan, which results when a debtor makes at least nine (9) full 

payments of an agreed amount, is the preferred collection method after payment of 

the debt in full. Total rehabilitation recoveries increased over $1 billion dollars from 

FY 2009. 

 Education ran a pilot program with Treasury in FY 2010 for salary offset of Federal 

employee borrowers who have defaulted loans. The pilot was used to work out the 

procedures for the due process requirement and ensure the system could handle the 

full volume of Federal employee borrowers in the Education portfolio. In September, 

2010, Education began due process for all of the Federal employee borrowers in the 

default portfolio. In FY 2010, Education collected approximately $180,000 in 

Federal salary offsets from the pilot program. 

 Education suspended its matching program with HHS’s National Directory of New 

Hires (NDNH) Database as of March 2009, which was the end of the period covered 

by the Memorandum of Understanding (MOU) between the two agencies. Education 

has been working with HHS on the MOU and the new procedures that must be 

implemented in order to meet legal requirements. 

 Education reinstated use of the IRS Skip Trace tool that had been suspended due to 

security concerns. The new process and security features were tested and production 

began in February 2010. However, the current MOU has lapsed and Education is 

working with IRS to execute a new one. The last monthly run of this service was 

done in July 2010. 

NOTE: This year, Education augmented the information provided to Treasury by 

reporting all recoveries from the entire Title IV portfolio of defaulted debt, thus providing 

a more complete picture of the tools being used to collect on student loans. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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F - USE OF PRIVATE COLLECTION AGENCIES (PCAS) 

1. Description 

 Education, FMS, and HHS have each established contracts with PCAs to collect non-tax 

debts owed to the Federal Government. PCAs assist Federal agencies in many ways, 

including establishing repayment agreements and resolving debts administratively by 

determining that a debtor is deceased, disabled, bankrupt, or out of business. 

 Education uses PCAs to assist in collecting the defaulted student loan debts in its 

portfolio. It relies heavily on PCAs and refers every eligible debt to one of its twentytwo PCAs. Education’s PCAs also initiate Education’s use of AWG as a debt collection 

tool. The total collections by Education’s PCAs, listed in a table on the next page, are 

cash payments, AWG payments, and Consolidations and Rehabilitations of loans that 

were done by the PCAs. In prior years, Education had reported only cash transactions, 

which included cash and AWG payments. That data is included in a second table. 

 

 FMS’s PCA contracts are used as part of its Cross-Servicing Program. Debts that are 

not collected or resolved, generally within 30 days after referral to FMS for CrossServicing, are referred to one of its five PCAs for collection action. FMS's PCAs also 

utilize AWG as an effective collection tool. 

 HHS’s PCA contract is administered by its PSC Debt Collection Center, which provides 

centralized debt collection services for HHS’s agencies, and several other 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. A new PCA contract was awarded during FY 2008, but the PSC 

assumed all existing repayment agreements. PCA collections were lower than in 

previous years since the new contractor did not receive those existing debts with 

established agreements. Referrals were lower due to a decrease in the overall receivable 

base, a greater emphasis on cross servicing referrals, and the referral of non-performing 

cases for collection through litigation. 

2. Referrals 

 Referrals to PCAs 

(in millions) 

Agency FY2008 FY 2009 FY 2010 

HHS $35 $51 $17

FMS $4,454 $6,379 $6,984

Education $23,863 $24,470 $28,845

Totals $28,352 $30,900 $35,846
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

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3. Collections 

 

Total Collections by PCAs 

(in millions) 

Excluding Education’s Consolidations 

and Rehabilitations 

Agency FY 2008 FY 2009 FY 2010 

HHS $3.8 $2.2 $1.7

FMS* $82.8 $132.1 $90.3

Education* $672.0 $635.0 $685.0

Totals $758.8 $769.3 $777.0

 *Includes collections by AWG 

 

 Total Collections by PCAs 

 (in millions) 

 Including Education’s Consolidations 

 and Rehabilitations 

Agency FY 2008 FY 2009 FY 2010 

HHS $3.8 $2.2 $1.7

FMS* $82.8 $132.1 $90.3

Education* $2,291 $2,416 $2,354

Totals $2,377.6 $2,550.1 $2,446

*Includes collections by AWG 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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APPENDIX I: FEDERAL RECEIVABLES AND DELINQUENT DEBT

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

delinquencies greater than 180 days, and debts that have been written off and classified as 

Currently-Not-Collectible (CNC) for the agencies with the highest ending balances at the 

end of FY 2010. The table groups all other agencies into a single category. At the end of 

FY 2010, 75 percent of the receivables belonged to the 11 agencies listed in the table 

below. 

Federal Receivables and Delinquent Debt

as of September 30, 2010 

(in millions) 

Agency Ending 

Balance 

Collections Writeoffs Total 

Delinquencies 

Delinquencies 

> 180* 

 Currently 

Not 

Collectible 

Education $370,742 $52,729 $1,357 $71,494 $43,608 $584

USDA $112,030 $25,196 $910 $3,721 $3,128 $1,451

Treasury $17,946 $14,408 $1,603 $14 $5 $6

SBA $16,626 $1,925 $2,741 $5,913 $5,236 $6,376

HUD $16,479 $7,604 $31 $1,724 $1,351 $329

SSA $15,213 $3,650 $986 $4,157 $3,026 $214

HHS $11,171 $34,392 $630 $1,966 $1,304 $11,410

DOD $10,996 $9,335 $453 $5,191 $4,616 $476

NCUA1 $10,202 $4,120 $0 $.06 $0 $0

EX/IM2 $8,872 $1,324 $202 $2,109 $1,883 $0

Energy $7,066 $5,364 $.95 $116 $105 $2,085

All Other $156,942 $66,353 $2,443 $7,150 $5,005 $5,511 

Gov’t 

Total $625,758 $226,400 $11,357 $103,555 $69,267 $28,442

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

written off during FY 2010. 

“Currently-Not-Collectible” (CNC) represents the dollar amount of all debts that 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 or collected. 

 

* Does not include write-offs reported as CNC. 

 

1

 National Credit Union Administration 

2

 Export-Import Bank 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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APPENDIX II: SOURCES OF DATA 

 

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

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

Source – Treasury Report on Receivables and Debt Collection Activities – Fourth 

Quarter 2010, as reported by Federal agencies to the Department of the 

Treasury. 

Part III – Governmentwide Delinquent Debt Collection Activities

A & B – Treasury Offset & Cross-Servicing Programs

 Source – Department of the Treasury, Financial Management Service 

C – HHS Debt Collection Center 

 Source – Department of Health and Human Services, Program Support Center 

D – Litigation at the Department of Justice 

Source – Department of Justice, Office of Debt Collection Management 

E – Education Student Loans 

 Source - Department of Education, Default Resolution Group 

F – Use of Private Collection Agencies 

 Sources – Department of Education, Default Resolution Group 

 Department of the Treasury, Financial Management Service 

 Department of Health and Human Services, Program Support Center 

Appendix I – Federal Receivables and Delinquent Debt

Source – Treasury Report on Receivables and Debt Collection Activities – Fourth 

Quarter 2010, as reported by Federal agencies to the Department of the 

Treasury.