FISCAL YEAR 2009 REPORT

TO THE CONGRESS

U.S. GOVERNMENT RECEIVABLES 

AND 

DEBT COLLECTION ACTIVITIES 

OF FEDERAL AGENCIES 

Department of the Treasury

March 2010
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

1

FISCAL YEAR 2009 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 - SUMMARY ............................................................................................................................................. 3

D – LEGISLATION ........................................................................................................................................ 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 ................................................................................................................................... 10

B - CROSS-SERVICING AT FMS ................................................................................................................. 11

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 at 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 

 

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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 on 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 

 

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C - SUMMARY

 Since the enactment of the DCIA in April 1996, through September 30, 2009, 

$42.5 billion has been collected to pay delinquent debts through Treasury’s Financial 

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

Program (Cross-Servicing). 

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

exclusive of offset of the 2009 stimulus and economic recovery payments, were $4.86 

billion in FY 2009. 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 $3.9 billion during the 

last five years. An additional $279 million was collected through TOP from the 2009 

stimulus and economic recovery payments for an FMS FY 2009 total of $5.1 billion. 

 

 In FY 2009, the Department of Justice (DOJ) collected $2.9 billion in cash recoveries 

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

DOJ has collected a total of $15.9 billion through civil litigation in the last five fiscal 

years. 

 In FY 2009, 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 $30.9 billion in delinquent Federal debt. These PCAs collected 

$786 million in FY 2009. 

 The Federal Government collected $222.8 billion in FY 2009 on all of its non-tax 

receivables. See Appendix I, Federal Receivables and Delinquent Debt.

D – LEGISLATIVE AGENDA : FMS

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

President’s 2010 budget: 

1. Expansion of the exception to the requirement for pre-levy collection due process 

to include levies issued to collect federal tax liabilities from federal vendor 

payments. 

2. Technical Correction to authorize the Internal Revenue Service to levy 100 

percent of all vendor payments, including payments for the purchase and lease of 

real estate, to collect delinquent taxes. 

3. Expansion of the tax refund offset program to authorize FMS to collect all State 

unemployment insurance debts, not only the debts 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 9/30/09

Administrative Debt* $73.6 $14.7

Defaulted Guaranteed

Loans

$47.9 $34.0

Direct Loans $403.5 $58.4

Receivables in 

Billions

Delinquencies 

in Billions

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND 

WRITE-OFFS

A - FISCAL YEAR-END DATA

1. Receivables and Delinquencies 

 The FY 2009 total receivables of $525 billion represented an increase of $158.5 

billion from the previous year, and total delinquencies of $107.2 billion represented 

an increase of $32.7 billion. 

 At the end of FY 2009, Federal loan programs (direct and guaranteed) comprised 86 

percent of total receivables, up from 82.4 percent at the end of FY 2008. Federal loan 

programs comprised 87 percent of total delinquencies, also up from 78 percent at the 

end of FY 2008. 

$145.0

$164.4 $159.6 $171.4

$222.8

$0

$50

$100

$150

$200

$250

$300

Dollars in Billions

2005 2006 2007 2008 2009

Fiscal Year

TOTAL COLLECTIONS ON RECEIVABLES

$310.3 $318.8 $339.6 $366.6

$525

$0

$100

$200

$300

$400

$500

$600

Dollars in Billions

2005 2006 2007 2008 2009

Fiscal Year

TOTAL RECEIVABLES

*Examples: Fines, penalties and overpayments. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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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. As these receivables increase, normally delinquencies will correspondingly 

increase. 

 The two agencies with the largest total receivables at the end of FY 2009 are 

Education ($242.6 billion) and the Department of Agriculture (USDA) ($109.5 

billion). Receivables from these two agencies comprise 67 percent of the 

Government’s total receivables (Education-47 percent and USDA 21 percent). 

 Two types of Education receivables accounted for almost all of its receivables: 

Federal Direct Student Loans ($209.2 billion), and Defaulted Guaranteed Student 

Loans ($32.5 billion). 

 Five program areas of the USDA accounted for over $104 billion of its receivables: 

Rural Electric & Telephone Revolving Fund ($43.4 billion), Rural Housing Insurance 

Fund ($26.1 billion), Commodity Credit Corporation ($13.8 billion), Rural 

Development Insurance Fund ($13.9 billion), and Farm Service Agency ($7.4 

billion). 

Comments on Receivables Data 

 Contributing to the FY 2009 increase in total receivables were a $145.2 billion 

increase in direct and guaranteed loans at Education, a $56.6 billion increase at 

Treasury resulting primarily from the Troubled Asset Relief Program (TARP), and a 

$10.5 billion increase at the National Credit Union Administration due to the 

agency’s financial assistance to the corporate credit union system under its Corporate 

Stabilization Program. 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 $209.2 billion at the end of 

FY 2009, and by $85.6 billion in FY 2009 alone. 

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

reports as Collections on Receivables in the Treasury Report on Receivables (TROR). 

At one time, it had reported those consolidations with collections because it considers 

them to be collections. 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 

 

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Additional Delinquent Debt Data

 With the increase in total 

receivables, there was also an 

increase in total delinquencies, 

which rose by 43.9 percent or 

$32.7 billion. The chart to the 

right provides the breakdown, in 

billions, of those delinquencies by 

age. 

 

 At the end of FY 2009, $96.8 

billion (91 percent) of the 

Government’s delinquent debts 

were distributed among six 

agencies: Education, Treasury, the Department of Defense (DOD), the Small 

Business Administration (SBA), the Social Security Administration (SSA), and 

USDA. 

 

 

 

 

* The large percentage increase in Treasury’s FY 2009 delinquencies was due to the 

sharp rise in new receivables in the Automotive Industry Financing Program component 

of the Department’s Troubled Asset Relief Program (TARP). TARP was established 

under the Emergency Economic Stabilization Act of 2008 (EESA) to ensure the overall 

stability and liquidity of the financial system. 

Delinquencies (in billions) 

Agency FY 2009 

% Change 

from 

FY 2008 

Education $55.6 +16%

Treasury $24.8 +119,805% *

DOD $4.7 +2%

SBA $4.2 +79%

SSA $3.9 +6%

USDA $3.5 +6%

TOTAL OF ABOVE $96.8 +32%

TOTAL GOV’T $107.2 +44%

0%

20%

40%

60%

80%

100%

Aging of Government-wide Delinquencies 

> 10 yrs $7.1 $9.2 $9.6 $11.4 $9.2 

6-10 yrs $8.0 $4.7 $5.0 $6.1 $4.5 

2-6 yrs $15.4 $12.3 $12.0 $12.7 $20.5 

181 days-2 yrs $14.8 $18.1 $18.6 $23.2 $24.1 

1-180 days $16.7 $20.6 $19.6 $21.1 $48.9 

2005 2006 2007 2008 2009
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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$16.1

$10.1

$6.4

$9.4 $9.6

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Dollars in Billions

2005 2006 2007 2008 2009

Fiscal Year

TOTAL WRITE-OFFS

2. Write-offs 

 Total write-offs in FY 2009 remained 

steady, increasing only slightly from 

FY 2008 by $169 million. 

 The amount of write-offs in FY 2005 

was high because of a greater 

adherence by agencies to established 

write-off policy (See OMB Circular 

No. A-129). Beginning in the third 

quarter of FY 2004, OMB began to 

specifically monitor the Federal 

program agencies’ write-off policies 

and practices. Also, FMS published 

additional guidance on write-off that year and continues to provide ongoing training 

to the agencies on the topic. Specifically, there were substantial one-time write-offs 

in FY 2005 by the Federal Communications Commission (FCC) and the Department 

of Energy. 

 OMB continues to monitor agency adherence to write-off policy. However, it should 

be noted that, 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 USDA ($472 million, up 48 percent) and 

the Environmental Protection Agency (EPA) ($285 million, up 6,251 percent). The 

largest decrease was at Education ($862 million, down 32 percent). 

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 $525 billion in receivables at the end of FY 2009, $14.6 billion represents unpaid 

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

FEDERAL AGENCIES 

 

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$0

$20

$40

$60

$80

$100

In Billions

 Debts Required to be Referred to Treasury

Starting Amount $66.6 $69.8 $61.6 $71.7 $83.3 

TOP $33.8 $35.5 $35.6 $44.8 $49.8 

Cross-Servicing $8.9 $10.0 $9.6 $10.9 $12.4 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

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. 

 At the end of FY 2009, debts eligible for referral to TOP increased by $5 billion, and 

debts eligible for Cross-Servicing increased by $1.6 billion from amounts reported in 

FY 2008 During FY 2009, FMS and the reporting agencies continued to work 

cooperatively to improve the accuracy of these eligibility numbers. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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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 

person's overdue Federal non-tax debt, child support obligation, and/or state debt. 

Offset referrals and collections are indicated in the charts on the next two pages. For FY 

2008 and FY 2009, the collections are broken out between total amounts collected, which 

include amounts collected by offset of the stimulus and economic recovery (ERP) 

payments, 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. Two states, 

Maryland and New Jersey, have signed such agreements with Treasury and are 

participating in the program. New York has signed an agreement and began participation 

in January 2010. Kentucky is preparing for participation by January 2011. 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 chart 

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

FEDERAL AGENCIES 

 

10

$35.63

$84.61

$5.76

$129.53

$37.48

$88.31

$6.13

$139.71

$45.05

$92.89

$7.92

$156.41

$49.18

$100.10

$10.33

$171.59

$67.16

$107.86

$9.55 $2.06

$186.11

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

Dollars in Billions

TOTAL DEBT REFERRALS TO THE TREASURY OFFSET PROGRAM

Federal Tax $129.53 $139.71 $156.41 $171.59 $186.11 

Other State Debt N/A N/A N/A N/A $2.06 

State Income Tax $5.76 $6.13 $7.92 $10.33 $9.55 

Child Support $84.61 $88.31 $92.89 $100.10 $107.86

Federal Nontax Debt $35.63 $37.48 $45.05 $49.18 $67.16 

Sep. 2005 Sep. 2006 Sep. 2007 Sep. 2008 Sep. 2009

2. Referrals 

3. Collections FY 2004 – FY 2008 

FY 2004 – FY 2008 Collections Through TOP In Millions of Dollars 

Type of Collection FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 

With 

Stimulus 

FY 2008

Without

Stimulus 

Administrative Offset* $109 $123 $144 $187 $244 $244 

Tax Refund Offset – Child 

Support $1,487 $1,580 $1,582 $1,696 $2,830 $1,989 

Tax Refund Offset – Federal 

Non-tax Debt $974 $990 $989 $1,195 $1,948 $1,373 

Tax Refund Offset – State 

Income Tax Debt $218 $232 $216 $219 $378 $289 

Continuous Tax Levy $114 $197 $303 $343 $400 $400 

Total Collected $2,902 $3,123 $3,234 $3,640 $5,800 $4,295 

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

delinquent State and Federal debts. 

NOTE: This chart 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 chart on the next page.

$255.53 

$271.60

$302.2

$331.20

$372.74 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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4. Collections - FY 2009 

FY 2009 Collections Through TOP in Millions of Dollars 

Type of Collection FY 2009 

With 

Stimulus 

FY 2009 

Without 

Stimulus 

FY 2009 

With 

ERP 

FY 2009 

Without 

ERP 

Administrative Offset – Child 

Support 

N/A N/A $5 $5 

Administrative Offset – 

Federal Non-tax Debt 

N/A N/A $524 $299 

Administrative Offset – State 

Income Tax Debt 

N/A N/A 

$13 $7 

Administrative Offset – Other 

State Debt 

N/A N/A 

$12 $8 

Administrative Offset – 

Continuous Tax Levy 

N/A N/A 

$497 $497 

Tax Refund Offset – Child 

Support $2,066 $2,042 N/A N/A 

Tax Refund Offset – Federal 

Nontax Debt $1,400 $1,385 N/A N/A 

Tax Refund Offset – State 

Income Tax Debt $368 $363 N/A N/A 

Total Collected $3,834 $3,790 $1,051 $816 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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CROSS-SERVICING REFERRALS

$12.2

$8.2 $8.1

$9.3

$11.5

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

Dollars in 

Billions

$8.2 $8.1 $9.3 $11.5 $12.2 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

$49.9

$80.3

$27.8

$25.3

$78.2

$28.0

$20.5

$74.6

$36.1

$27.3

$82.8

$69.8

$60.7

$132.1

$116.5

$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 $27.8 $28.0 $36.1 $69.8 $116.5

PCA $80.3 $78.2 $74.6 $82.8 $132.1

DMS $49.9 $25.3 $20.5 $27.3 $60.7

FY 

2005

FY 

2006

FY 

2007

FY 

2008

FY 

2009

B - 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). 

2. Referrals 

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

FEDERAL AGENCIES 

 

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$1.45 $1.80 $1.79

$1.81 $1.60

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Dollars in billions

Referrals to PSC

$1.45 $1.80 $1.79 $1.81 $1.60 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

$453.9 $463.2

$351.4 $291.5 $353.20

$0.0

$200.0

$400.0

$600.0

$800.0

Dollars in Millions

PSC Collections

$453.9 $463.2 $351.4 $291.5 $353.20 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

C – HHS’S DEBT COLLECTION CENTER 

1. Description 

The Program Support Center (PSC), established in 1995, is an operating division 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 $6.2 billion referred to Treasury for Cross-Servicing. 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 $4.6 billion. 

2. Referrals to PSC 

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

FEDERAL AGENCIES 

 

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$3.6 $3.6

$3.0 $2.8 $2.9

$0.0

$1.0

$2.0

$3.0

$4.0

Dollars in Billions

FY

2005

FY

2006

FY

2007

FY

2008

FY

2009

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) 

2005 6,723 $5.0 

2006 7,913 $6.1 

2007 9,718 $5.0 

2008 11,559 $3.8 

2009 11,088 $5.2 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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E - EDUCATION STUDENT LOANS

 Since November 1998, Treasury has exempted student loan debts collected by 

Education from mandatory transfer to Treasury for Cross-Servicing, based on 

Education’s demonstrated expertise in collecting student loan debts. Federal Student 

Aid debt collection activities at Education are centralized in Education’s Default 

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

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

represent a relatively small amount of DRG’s total delinquent debt portfolio. 

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

have increased from $17.4 billion at FY 2005 year-end to $24.4 billion at FY 2009 

year-end; and collections have increased from $2.082 billion in FY 2005 to $3.074 

billion in FY 2009. 

Education’s Use of Debt Collection Tools 

(in millions)

Collection Tools FY 2005 

Collections 

FY 2006 

Collections

FY 2007 

Collections

FY 2008 

Collections 

FY 2009 

Collections 

Private Collection Agency $378 $410 $368 $376 $318

Litigation (DOJ) $18 $16 $13 $11 $9

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

AWG (at Education and PCAs) $237 $251 $281 $304 $324

Treasury Offset $415 $402 $465 $758 $501

Other Tools at Education $50 $51 $46 $42 $37

Total Loan Consolidations 

(at Education and at PCAs) $197 $224 $179 $236 $325

Total Loan Rehabilitations 

(at Education and at PCAs) $786 $954 $1,322 $1,480 $1,559

 Recoveries from TOP decreased by 34 percent, from FY 2008 to FY 2009. The 

decrease was due to the reduction in offset opportunities that were available from the 

stimulus payments in the previous year. Education still relies heavily on PCAs and 

refers every eligible debt as quickly as possible to one of its 17 PCAs. Education has 

been increasing the use of loan rehabilitation over loan consolidation over the past 

five years. The FY 2009 consolidation increase was due to a short stoppage of 

rehabilitations in the Federal Family Education Loan (FFEL) program because of an 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

16

inability to sell those loans. This problem was quickly addressed and resolved. As a 

last resort, Education uses AWG to collect its debts, primarily through its PCAs. 

 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. Of the total amount of defaulted loan rehabilitations indicated in the 

chart on the previous page, Education’s PCAs rehabilitated $1.485 billion in FY 

2009, up 5.54 percent from the $1.407 billion in FY 2008. 

 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. HHS 

changed the requirements for its NDNH agreements. As a result, Education 

postponed the matching for the remainder of FY 2009 while it worked to meet the 

revised requirements for FY 2010. 

 DRG is in the process of working with Treasury on a new pilot with TOP to offset 

federal employees who have defaulted on student loans. The pilot is planned to begin 

in April 2010 and run through the end of the fiscal year. It is being used to test and 

evaluate processing flows and to estimate the percentage of those federal employee 

debtors receiving offset notices who will request a hearing. 

NOTE: The Education PCA and Student Loans sections of this report account for 

collections on Education’s defaulted portfolio. Loan types include loans that have been 

assigned to Education from Guaranty Agencies in the FFEL program, defaulted William 

D. Ford direct loans, assigned Perkins loans, and overpayments from grants. 
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 seventeen 

PCAs. Education’s PCAs also initiate Education’s use of administrative wage 

garnishment as a debt collection tool. 

 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 administrative wage garnishment as an effective collection tool. 

 HHS’s PCA contract is administered by its Program Support Center (PSC), 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 in FY 

2008 and FY 2009 from previous years since the new contractor did not receive those 

existing debts with established agreements. 

2. Referrals 

 Referrals to PCAs 

(in millions) 

Agency FY 2007 FY2008 FY 2009 

HHS $69 $35 $51

FMS $3,341 $4,454 $6,379

Education $18,982 $23,863 $24,470

Totals $22,392 $28,352 $30,900
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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3. Collections 

 Collections by PCAs 

 (in millions) 

Agency FY 2007 FY 2008 FY 2009 

HHS $7.4 $3.8 $2.2

FMS* $74.6 $82.8 $149.2

Education* $639 $672 $635

Totals $721 $758.6 $786.40

*Includes collections by administrative wage garnishment 
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, delinquencies, 

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

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

at the end of FY 2009. The table groups all other agencies into a single category. At the 

end of FY 2009, 95 percent of the receivables belonged to the 11 agencies listed in the 

table below. 

Federal Receivables and Delinquent Debt

as of September 30, 2009 

(in millions) 

Agency Ending 

Balance 

Collections Writeoffs Delinquencies Delinquencies 

> 180* 

 Currently 

Not 

Collectible 

Education $242,551 $24,828 $1,211 $55,612 $35,626 $335

USDA $109,523 $23,977 $1,456 $3,541 $3,070 $1,320

Treasury $62,104 $28,707 $4 $24,801 $5 $5

SBA $15,149 $1,642 $1,798 $4,168 $3,682 $4,814

SSA $15,000 $3,561 $1,077 $3,970 $2,856 $248

NCUA1 $10,918 $11,435 $0 $.4 $0 $0

HHS $9,736 $35,209 $1,164 $2,076 $1,676 $10,258

DOD $9,208 $17,855 $359 $4,736 $4,424 $238

HUD $9,082 $4,882 $58 $507 $376 $349

EX/IM2 $7,715 $1,174 $.4 $2,040 $1,909 $0

AID3 $5,456 $552 $13 $457 $447 $0

All Other $28,603 $68,945 $2,416 $5,245 $5,256 $6,409 

Gov’t 

Total $525,045 $222,767 $9,556 $107,153 $59,327 $23,966

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

written off during FY 2009. 

“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 

3

 Agency for International Development 
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 and 

Appendix I

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

Quarter 2009, as reported by Federal agencies to the Department of the 

Treasury. 

Part III – Governmentwide 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