NOTES TO THE FINANCIAL STATEMENTS 86 

Note 4. Loans Receivable, Net and Loan Guarantee Liabilities 

Loans Receivable, net as of September 30, 2022 

Subsidy 

Expense 

Loans Subsidy Loans (Income) 

Receivable, Interest Foreclosed Cost Receivable, for the 

(In billions of dollars) Gross Receivable Property Allowance Net Fiscal Year 

 

Federal Direct Student Loans - 

Education ................................ 1,341.8 86.7 - (611.9) 816.6 385.4 

Disaster Assistance Loans - 

SBA ........................................ 367.0 14.8 - (61.5) 320.3 43.0 

Federal Housing Admin Loans 

- HUD ..................................... 53.8 20.9 0.5 (14.3) 60.9 (0.1) 

Electric Loans - USDA ............. 53.9 - - (2.2) 51.7 0.7 

Federal Family Education 

Loans - Education .................... 80.3 21.6 - (62.1) 39.8 10.8 

All other programs ................... 159.6 4.0 0.8 (19.6) 144.8 0.1 

Total loans receivable ............ 2,056.4 148.0 1.3 (771.6) 1,434.1 439.9 

Loans Receivable, net as of September 30, 2021 

Subsidy 

Expense 

Loans Subsidy Loans (Income) 

Receivable, Interest Foreclosed Cost Receivable, for the 

(In billions of dollars) Gross Receivable Property Allowance Net Fiscal Year 

 

Federal Direct Student Loans - 

Education ................................ 1,292.2 86.5 - (273.9) 1,104.8 93.9 

Disaster Assistance Loans - 

SBA ........................................ 249.2 7.5 - (12.6) 244.1 2.9 

Federal Housing Admin Loans 

- HUD ..................................... 46.2 19.9 0.6 (17.6) 49.1 - 

Electric Loans - USDA ............. 51.0 - - (2.6) 48.4 (0.8) 

Federal Family Education 

Loans - Education .................... 82.0 23.9 - (47.7) 58.2 0.6 

All other programs ................... 159.4 3.2 0.9 (17.1) 146.4 1.3 

Total loans receivable ............ 1,880.0 141.0 1.5 (371.5) 1,651.0 97.9 

Loans Receivable 

Loans receivable consists primarily of direct loans disbursed by the government, receivables related to guaranteed loans 

that have defaulted, and certain receivables for guaranteed loans that the government has purchased from lenders. Direct 

loans are used to promote the nation’s welfare by making financing available to segments of the population not served 

adequately by non-federal institutions, or otherwise providing for certain activities or investments. For those unable to afford 
87 NOTES TO THE FINANCIAL STATEMENTS 

credit at the market rate, federal credit programs provide subsidies in the form of direct loans offered at an interest rate lower 

than the market rate. 

The amount of the long-term cost of post-1991 direct loans equals the subsidy cost allowance for direct loans as of 

September 30. The amount of the long-term cost of pre-1992 direct loans equals the allowance for subsidy amounts (or PV 

allowance) for direct loans. The long-term cost is based on all direct loans disbursed in this fiscal year and previous years that 

are outstanding as of September 30. It includes the subsidy cost of these direct loans estimated as of the time of loan 

disbursement and subsequent adjustments such as modifications, reestimates, amortizations, and write-offs. 

Loans receivable, net includes related interest and foreclosed property. Foreclosed property is property that is 

transferred from borrowers to a federal credit program, through foreclosure or other means, in partial or full settlement of 

post-1991 direct loans or as compensation for losses that the government sustained under post-1991 loan guarantees. Please 

refer to the financial statements of HUD, USDA, and VA for additional information regarding foreclosed property. 

The total subsidy expense/(income) is the cost recognized during the fiscal year. It consists of the subsidy 

expense/(income) incurred for direct loans disbursed during the fiscal year, for modifications made during the fiscal year of 

direct loans outstanding, and for upward or downward reestimates as of the end of the fiscal year. This expense/(income) is 

included in the Statements of Net Cost. 

The majority of loans receivable programs are provided by Education, SBA, HUD, and USDA. For additional 

information regarding the direct loan programs listed in the tables above, please refer to the financial statements of the 

entities. 

Education has loan programs that are authorized by Title IV of the Higher Education Act of 1965. The William D. Ford 

Federal Direct Loan Program (referred to as the Direct Loan Program), was established in FY 1994 and offered four types of 

educational loans: Stafford, Unsubsidized Stafford, Parent Loan for Undergraduate Students, and consolidation loans. With 

this program, the government makes loans directly to students and parents through participating institutions of higher 

education. Education disbursed approximately $120.4 billion in direct loans to eligible borrowers in FY 2022 and 

approximately $104.8 billion in FY 2021. The COVID-19 relief legislation and administrative actions provided support for 

student loan borrowers by temporarily suspending nearly all federal student loan payments interest free. In addition, all 

federal wage garnishments and collections actions for borrowers with federally held loan in default were halted. To address 

the financial harms of the pandemic by smoothing the transition back to repayment and helping borrowers at highest risk of 

delinquencies or default once payments resume, Education announced broad-based debt relief. Borrowers with loans held by 

Education who received a Pell Grant in college and meet the specified income limits are eligible for up to $20,000 in debt 

relief, while non-Pell Grant recipients who meet the specified income limits are eligible for up to $10,000 in relief. This 

action resulted in an upward modification cost of $361.0 billion in the Direct Loan Program. There was a net negative $23.7 

billion modification adjustment transfer associated with this modification, bringing the total modification cost for the Direct

Loan Broad-Based Debt Relief for $337.3 billion. These loan modification costs are a part of the $338.0 billion increase in 

subsidy cost allowance for Education’s Federal Direct Student Loans. Subsequent to September 30, 2022, a federal court 

order stayed the implementation of the debt relief. For information regarding the status of student loan debt relief refer to 

Note 30—Subsequent Events. 

The SBA makes loans to microloan intermediaries and provides a direct loan program that assists homeowners, renters 

and businesses recover from disasters. The CARES Act provides funding for SBA to offer low-interest EIDLs for working 

capital to small businesses suffering substantial economic injury as a result of COVID-19 that can be used to pay fixed debts, 

payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. Overall, SBA’s credit program 

receivables saw an increase of $76.1 billion from FY 2021 which includes SBA’s direct disaster loan program which saw an 

increase of $76.2 billion. The change in credit program receivables resulted from an increase of $117.8 billion in direct 

disaster loans as a direct result of CARES Act funded loans. 

HUD’s Office of Housing plays a vital role for the nation’s homebuyers, homeowners, renters, and communities 

through its nationally administered programs. It includes FHA and Ginnie Mae. 

USDA’s Rural Development offers direct loans with unique missions to bring prosperity and opportunity to rural areas. 

The Rural Housing programs provide affordable, safe, and sanitary housing and essential community facilities to rural 

communities. Rural Utility programs help improve the quality of life in rural areas through a variety of loan programs for 

electric energy, telecommunications, and water and environmental projects. 

 
 NOTES TO THE FINANCIAL STATEMENTS 88 

Loan Guarantee Liabilities as of September 30, 2022, and 2021 

Principal 

Principal Amount Amount Subsidy Expense 

Loan Guarantee of Loans Under Guaranteed (Income) for the 

Liabilities Guarantee by the U.S. Fiscal Year 

(In billions of dollars) 2022 2021 2022 2021 2022 2021 2022 2021

 

Federal Housing Administration 

Loans - HUD ............................... (39.8) (17.9) 1,533.7 1,503.6 1,368.0 1,344.4 (37.8) (25.2)

Small Business Loans .................. 25.7 227.8 187.9 459.6 163.8 435.3 (5.0) 296.8 

Federal Family Education Loans - 

Education .................................... 10.4 7.3 98.6 116.9 98.6 116.9 11.2 10.1 

Veterans Housing Benefit 

Programs .................................... 9.9 10.9 940.9 862.2 237.3 218.3 (2.2) 0.6 

All other guaranteed loan 

programs .................................... 0.2 2.6 195.0 208.6 178.3 190.9 (2.3) (3.2)

Total loan guarantee liabilities .... 6.4 230.7 2,956.1 3,150.9 2,046.0 2,305.8 (36.1) 279.1 

Loan Guarantee Liabilities 

Loan guarantee programs are also used to promote the nation’s welfare by making financing available to segments of 

the population not served adequately by non-federal institutions, or otherwise providing for certain activities or investments.

For those to whom non-federal financial institutions are reluctant to grant credit because of the high risk involved, federal 

credit programs guarantee the payment of these non-federal loans and absorb the cost of defaults. 

The amount of the long-term cost of post-1991 loan guarantees outstanding equals the liability for loan guarantees as of 

September 30. The amount of the long-term cost of pre-1992 loan guarantees equals the allowance for subsidy amounts (or 

PV allowance) and the liability for loan guarantees. The long-term cost is based on all guaranteed loans disbursed in this 

fiscal year and previous years that are outstanding as of September 30. It includes the subsidy cost of the loan guarantees 

estimated as of the time of loan disbursement and subsequent adjustments such as modifications, reestimates, amortizations, 

and write-offs. 

The total subsidy expense/(income) is the cost of loan guarantees recognized during the fiscal year. It consists of the 

subsidy expense/(income) incurred for guaranteed loans disbursed during the fiscal year, for modifications made during the 

fiscal year of loan guarantees outstanding, and for upward or downward reestimates as of the end of the fiscal year of the cost

of loan guarantees outstanding. This expense/(income) is included in the Statements of Net Cost. 

The majority of the loan guarantee programs are provided by HUD, SBA, Education and VA. For additional 

information regarding the guaranteed loan programs listed in the tables above, please refer to the financial statements of the 

entities. 

HUD’s Office of Housing promotes equal housing opportunities. It includes FHA who provides mortgage insurance on 

mortgages for single family mortgage loans made by FHA-approved lenders as well as providing mortgage insurance on 

multifamily rental housing, healthcare facilities and single-family Title I manufactured housing and property improvement 

loans. FHA strives to meet the needs of many first-time and minority homebuyers who, without the FHA guarantee, may find 

mortgage credit to be unaffordable or simply unavailable. These programs are a critical component of FHA’s efforts to meet 

the nation’s need for decent, safe, and affordable housing. Due to COVID-19 the CARES Act provided borrowers with 

federally backed mortgage loans a 60-day foreclosure moratorium and a right to forbearance of loan payments for up to one 

year for homeowners experiencing financial hardship. FHA’s Loan Guarantee Liability decreased $21.9 billion primarily due 

to upward and downward reestimates, increases in claim payments, decreases in interest fees received and decreases in 

negative subsidy payments. Overall, anticipated cash inflows are projected to exceed cash outflows. 

The SBA provides guarantees that help small businesses obtain bank loans and licensed companies to make investments 

in qualifying small businesses. The loan guarantee PPP provides loan forgiveness for eligible small businesses, individuals, 

and nonprofits if proceeds were used in accordance with the law. Eligible expenses include payroll, rent, utility payments and 

other limited uses. SBA’s Loan Guarantee Liabilities decreased $202.1 billion primarily due to PPP loan forgiveness to 

lenders. 
89 NOTES TO THE FINANCIAL STATEMENTS 

Education has loan programs that are authorized by Title IV of the Higher Education Act of 1965. The FFEL Program 

was established in FY 1965 and operates through state and private, nonprofit guaranty agencies that provided loan guarantees 

on loans made by private lenders to eligible students. The Student Aid and Fiscal Responsibility Act, which was enacted as 

part of the Health Care Education and Reconciliation Act of 2010 (P.L. 111-152), eliminated the authority to guarantee new 

FFEL after June 30, 2010. 

VA operates the following loan guarantee programs: Housing Guaranteed Loans and Loan Sale Guarantees. The Home 

Loans program provides loan guarantees to veterans, service members, qualifying dependents, and limited non-veterans to 

purchase homes and retain homeownership with favorable market terms. 

For additional information regarding the CARES Act refer to the financial statements of SBA, Education, HUD and 

Note 29—COVID-19 Activity.