FISCAL YEAR 2007 REPORT

TO THE CONGRESS

U.S. GOVERNMENT RECEIVABLES 

AND 

DEBT COLLECTION ACTIVITIES 

OF FEDERAL AGENCIES 

Department of the Treasury

May 2008
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

1

FISCAL YEAR 2007 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 ............................................................................................................................................. 2

D - LEGISLATIVE AGENDA .......................................................................................................................... 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 - GOVERNMENT-WIDE DELINQUENT DEBT COLLECTION ACTIVITIES .......................... 9

A - USE OF PRIVATE COLLECTION AGENCIES (PCAS)................................................................................. 9

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

2. Referrals......................................................................................................................................... 9

3. Collections ................................................................................................................................... 10

B - TREASURY OFFSET PROGRAM (TOP) .................................................................................................. 11

1. Description................................................................................................................................... 11

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

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

C - CROSS-SERVICING AT FMS ................................................................................................................. 13

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

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

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

D - HHS’S DEBT COLLECTION CENTER .................................................................................................... 14

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

2. Referrals to PSC.......................................................................................................................... 14

3. Collections at PSC....................................................................................................................... 14

F - LITIGATION AT THE DEPARTMENT OF JUSTICE (DOJ).......................................................................... 15

1. Description................................................................................................................................... 15

2. Referrals....................................................................................................................................... 15

3. Collections ................................................................................................................................... 15

G - EDUCATION STUDENT LOANS ............................................................................................................. 16

APPENDIX I: FEDERAL RECEIVABLES AND DELINQUENT DEBT........................................... 18

APPENDIX II: SOURCES OF DATA ..................................................................................................... 19
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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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. This report includes 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 and Debt Collection Activities (TROR). It includes 

information about total 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 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 referral to Treasury for mandatory 

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

of this report. 

This report 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 by certain 

Federal agencies. 

C - SUMMARY

• Through September 30, 2007, $31.5 billion has been collected to pay delinquent debts 

through the Department of the Treasury’s Financial Management Service’s (FMS) 

Treasury Offset Program (TOP) and Cross-Servicing Program (Cross-Servicing) 

since the enactment of the DCIA in April 1996. 

• Total collections by FMS on delinquent debts through TOP and Cross-Servicing were 

$3.76 billion in FY 2007. This is the highest amount collected by FMS in a single 

fiscal year since FMS began government-wide delinquent debt collection programs in 

1996. Annual collections through these programs have averaged over $3.3 billion 

during the last five years. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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• In FY 2007, the Department of Justice (DOJ) collected $3 billion in cash recoveries 

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

DOJ has collected a total of $15.8 billion through civil litigation in the last five fiscal 

years. 

• In FY 2007, 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 $22.4 billion in delinquent Federal debt. These PCAs collected 

$721 million in FY 2007. 

• The Federal Government collected $159.6 billion in fiscal year (FY) 2007 on all of its 

non-tax receivables. See Appendix I, Federal Receivables and Delinquent Debt.

D - LEGISLATIVE AGENDA

Two proposals to enhance FMS’s debt collection program were included in the 

President’s FY 2009 Budget: 

1. Authorize the offset of Federal tax refund payments to collect delinquent state 

unemployment insurance debts, and

2. Eliminate the 10-year statute of limitations for collection of delinquent Federal 

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

FEDERAL AGENCIES 

 

4

0%

50%

100%

Distribution of Receivables and Delinquencies 

as of 9/30/07

Administrative Debt* $65.6 $15.5

Defaulted Guaranteed

Loans

$37.2 $22.2

Direct Loans $236.7 $27.2

Receivables in 

Billions

Delinquencies 

in Billions

II - GOVERNMENT DEBT PORTFOLIO, COLLECTIONS AND 

WRITE-OFFS

A - FISCAL YEAR-END DATA

1. Receivables and Delinquencies 

• Total receivables increased by $20.9 billion in FY 2007 from the previous year, but 

total delinquencies - $64.9 billion – increased by only $19.4 million. 

• The decrease in the FY 2007 collections on receivables from FY 2006 is attributable, 

in large part, to a $19.6 billion decrease in Education’s debt consolidations, which the 

agency treats as collections. (Please see the Collections Note on Page 5.) 

 

• At the end of FY 2007, Federal loan programs (direct and guaranteed) comprised 81 

percent of total receivables, down slightly from 83 percent at the end of FY 2006. 

Federal loan programs comprised 76 percent of total delinquencies, also down 

slightly from 78 percent at the end of FY 2006. 

$119.6

$121.9

$145.0 $164.4 $159.6

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

Dollars in Billions

2003 2004 2005 2006 2007

Fiscal Year

TOTAL COLLECTIONS ON RECEIVABLES

$312.3 $310.8 $310.3 $318.8 $339.6

$0

$50

$100

$150

$200

$250

$300

$350

$400

Dollars in Billions

2003 2004 2005 2006 2007

Fiscal Year

TOTAL RECEIVABLES

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

FEDERAL AGENCIES 

 

5

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 2007 are 

Education ($131.7 billion) and the Department of Agriculture (USDA) ($104.8 

billion). Receivables from these two agencies comprise 70 percent of the 

Government’s total receivables (Education 39 percent and USDA 31 percent). 

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

Federal Direct Student Loans ($107.2 billion), and Defaulted Guaranteed Student 

Loans ($23.7 billion). 

• Five program areas of the USDA accounted for almost $99 billion of its receivables: 

Rural Electric & Telephone Revolving Fund ($37.8 billion), Rural Housing Insurance 

Fund ($25.4 billion), Commodity Credit Corporation ($16.7 billion), Rural 

Development Insurance Fund ($12.1 billion), and Farm Service Agency ($6.8 

billion). 

Analysis of Receivables Data 

• Total receivables increased in FY 2007, in part because write-offs went down during 

the last two fiscal years after a substantial increase in FY 2005. During FY 2007, 

Federal agencies wrote off $6.4 billion in receivables, compared to $16.1 billion in 

FY 2005 and $10.1 billion in FY 2006. (Please see the discussion of write-offs on 

Page 7.) Another factor was a $10.4 billion increase reported by the Department of 

Health & Human Services due, in large part, to the first time recording of a receivable 

for Medicare Part D overpayments to plans in 2006. 

 

• Also, Education’s direct student loan portfolio has grown significantly over the last 

several years and this trend is continuing. Education’s direct loan portfolio has 

increased from $71.8 billion at the end of FY 2001 to $107.2 billion at the end of FY 

2007, and by $6.2 billion in FY 2007 alone. 

• Collections Note: In a previous fiscal year (FY 2006), Education began to break out 

its loan consolidations from the amount it reports as Collections on Receivables in the 

Treasury Report on Receivables (TROR). It had previously 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 government-wide collections amount. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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Additional Delinquent Debt Data

Total delinquencies were 

essentially unchanged from the 

previous fiscal year, increasing by 

only 0.03% or $19.4 million. 

There was a slight increase in the 

amount of debts more than 2 years 

delinquent. However, the overall 

trend over the last three fiscal 

years has been downward in this 

age category. Debts between 2 

and 6 years delinquent decreased 

by $297 million. 

 

• At the end of FY 2007, $54.8 

billion (85 percent) of the 

Government’s delinquent debts 

were distributed among six agencies: Education, the Department of Defense (DOD), 

the Social Security Administration (SSA), USDA, HHS, and the Small Business 

Administration (SBA). 

 

 

 

 * Funds Appropriated to the President 

 

 

Delinquencies (in millions) 

Agency FY 2007 

% Change 

from 

FY 2006 

Education $39,233 1.7%

SSA $3,509 7.6%

HHS $2,302 10.2%

FATP* $1,560 7.9%

DOD $4,450 (9%)

USDA $3,253 (13.1%)

SBA $2,012 (36.2%)

EX-IM BANK $1,926 (4.2%)

0%

20%

40%

60%

80%

100%

Aging of Government-wide Delinquencies 

> 10 yrs $10.4 $10.9 $7.1 $9.2 $9.6

6-10 yrs $12.4 $12.8 $8.0 $4.7 $5.0

2-6 yrs $14.6 $15.0 $15.4 $12.3 $12.0

181 days-2 yrs $17.9 $14.8 $14.8 $18.1 $18.6

1-180 days $14.8 $17.5 $16.7 $20.6 $19.6

2003 2004 2005 2006 2007
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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$7.2 $7.2

$16.1

$10.1

$6.4

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Dollars in Billions

2003 2004 2005 2006 2007

Fiscal Year

TOTAL WRITE-OFFS

2. Write-offs 

• Total write-offs in FY 2007 decreased 

from FY 2006 by $3.7 billion to a level 

closer to the amounts reported in FY 

2003 and FY 2004. 

• The substantial increase in write-offs in 

FY 2005 resulted from 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. 

• Write-offs increased at many individual agencies in FY 2007. Among those were 

Education ($255.5 million), the Department of Veterans Affairs (VA) ($122.2 

million), the Pension Benefit Guaranty Corporation ($47.3 million), the Department 

of Housing & Urban Development (HUD) ($21.2 million), and the Overseas Private 

Investment Corporation ($20.6 million). 

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 $339.6 billion in receivables at the end of FY 2007, $8.5 billion represents unpaid 

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

FEDERAL AGENCIES 

 

8

$0.0

$20.0

$40.0

$60.0

$80.0

In Billions

 Debt Eligible for Referral to Treasury

Starting Amount $67.8 $68.2 $66.6 $69.8 $61.6

TOP Eligibility $33.4 $31.8 $33.8 $35.5 $35.6

Cross-servicing Eligibility $10.1 $7.7 $8.9 $10.0 $9.6

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

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 TOP and/or Cross-Servicing. 

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

required by law. Debts exempt from both TOP and Cross-Servicing include those in 

appeals or forbearance; debts in litigation or that have been referred for litigation to 

DOJ; debts in foreclosure or in bankruptcy; and foreign sovereign debts. Additional 

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

internal offset, and debts exempted from Cross-Servicing by Treasury. These 

exemptions are subtracted from the “Starting Amount” (debts more than 180 days 

delinquent plus those classified as Currently-Not-Collectible) to determine “TOP 

Eligibility” and “Cross-Servicing Eligibility.” 

The decrease in the FY 2007 “Starting Amount” from FY 2006 is attributable, to a large extent, 

to a change in the way the Social Security Administration reported its written-off debt. The 

change resulted in an $8.8 billion decrease in SSA’s debts in the status of Currently Not 

Collectible. 

• At the end of FY 2007, debts eligible for referral to TOP increased by $118.8 million, 

and debts eligible for Cross-Servicing decreased by $362 million from amounts 

reported in FY 2006. During FY 2007, 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 

 

9

III - GOVERNMENT-WIDE DELINQUENT DEBT COLLECTION 

ACTIVITIES

A - 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 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 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 Cross-Servicing, 

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 bureaus, 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. 

2. Referrals 

 Referrals to PCAs 

(in millions) 

Agency FY 2005 FY 2006 FY2007 

HHS $45 $68 $69

FMS $2,280 $3,500 $3,341

Education $11,376 $13,952 $18,982

Totals $13,701 $17,520 $22,392
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

10

3. Collections 

 Collections by PCAs 

 (in millions) 

Agency FY2005 FY 2006 FY 2007 

HHS $10.1 $9.6 $7.4

FMS* $80.3 $78.2 $74.6

Education* $603.1 $651.8 $639

Totals $693.5 $739.6 $721

*Includes collections by administrative wage garnishment 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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B - 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 income tax 

debt. Offset referrals and collections are indicated in the charts on the next page. 

Federal Payment Levy Program 

The Federal Payment Levy Program (FPLP) is a 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. 

Reciprocal Offset Agreements with States 

In January 2007, FMS published a regulation to implement a provision in the DCIA that 

authorizes Treasury and the states 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, signed 

agreements and are participating in a pilot program with Treasury, which began in June 

2007. As of December 31, 2007, New Jersey had successfully offset 358 State payments 

for $255,188.10 and Maryland had successfully offset 886 State payments for 

$371,441.38. On the other side, FMS had offset 1,978 Federal vendor payments for 

$4,297,774.74 for New Jersey debts and 2,660 Federal non-tax payments for 

$4,616,630.90 for Maryland debts. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

12

$31.58

$75.12

$4.13

$80.44

$34.34

$79.63

$5.26

$105.42

$35.63

$84.61

$5.76

$129.53

$37.48

$88.31

$6.13

$139.71

$45.05

$92.89

$7.92

$156.41

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

Dollars in Billions

TOTAL DEBT REFERRALS TO THE TREASURY OFFSET PROGRAM

Federal Tax $80.44 $105.42 $129.53 $139.71 $156.41

State Income Tax $4.13 $5.26 $5.76 $6.13 $7.92

Child Support $75.12 $79.63 $84.61 $88.31 $92.89

Federal Nontax Debt $31.58 $34.34 $35.63 $37.48 $45.05 

Sep. 2003 Sep. 2004 Sep. 2005 Sep. 2006 Sep. 2007

2. Referrals 

3. Collections 

Collections Through TOP In Millions of Dollars 

Type of Collection FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 

Administrative Offset* $88 $109 $123 $144 $179 

Tax Refund Offset – Child 

Support (excluding tax 

rebates) 

$1,428 $1,487 $1,580 $1,582 $1,696 

Tax Refund Offset – Federal 

Non-tax Debt (excluding tax 

rebates) 

$1,025 $974 $990 $989 $1,195 

Tax Refund Offset – State 

Income Tax Debt (excluding 

tax rebates) 

$152 $218 $232 $216 $219 

Tax Refund Offset – Tax 

Rebates** $207 -- -- -- -- 

Continuous Tax Levy $89 $114 $197 $303 $343 

Total Collected $2,990** $2,902 $3,123 $3,234 $3,632 

 *Collection of Federal non-tax debts and child support debts by offsetting Federal non-tax 

payments. 

 **Tax rebate offsets for FY 2003 are for offsets of advance child tax credit payments.

$186.59 $191.27

$224.64

$255.54

$271.63 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

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CROSS-SERVICING REFERRALS

$9.3

$7.9 $7.5 $8.2 $8.1

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

Dollars in 

Billions

$7.9 $7.5 $8.2 $8.1 $9.3 

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

$35.2

$73.3

$25.7

$32.6

$70.4

$24.7

$49.9

$80.3

$27.8

$25.3

$78.2

$28.0

$20.5

$74.6

$36.1

$0.0

$50.0

$100.0

$150.0

$200.0

Dollars in Millions

CROSS-SERVICING & PRIVATE COLLECTION 

AGENCY (PCA) COLLECTIONS 

TOP $25.7 $24.7 $27.8 $28.0 $36.1

PCA $73.3 $70.4 $80.3 $78.2 $74.6

DMS $35.2 $32.6 $49.9 $25.3 $20.5

FY 

2003

FY 

2004

FY 

2005

FY 

2006

FY 

2007

C - CROSS-SERVICING AT FMS

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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$1.42 $1.31 $1.45

$1.80 $1.79

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Dollars in billions

Referrals to PSC

$1.42 $1.31 $1.45 $1.80 $1.79 

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

$545.5 $544.6

$453.9 $463.2

$351.40

$0.0

$200.0

$400.0

$600.0

$800.0

Dollars in Millions

PSC Collections

$545.5 $544.6 $453.9 $463.2 $351.40 

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

D - 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. 

2. Referrals to PSC 

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

FEDERAL AGENCIES 

 

15

$3.1

$2.5

$3.6 $3.6

$3.00

$0.0

$1.0

$2.0

$3.0

$4.0

Dollars in Billions

FY

2003

FY

2004

FY

2005

FY

2006

FY

2007

CASH COLLECTIONS FROM CIVIL LITIGATION 

AT DOJ 

F - LITIGATION AT THE DEPARTMENT OF JUSTICE (DOJ) 

1. Description 

DOJ serves as the Federal Government’s “collector of last resort.” 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) 

2003 11,557 $2.1 

2004 7,165 $2.5 

2005 6,723 $5.0 

2006 7,913 $6.1 

2007 9,718 $5.0 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

16

G - 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 Borrower 

Services-Collections (BSC). BSC services Education's defaulted student loans (loans 

delinquent more than 270 days). Use of the full range of debt collection tools outlined 

in Education’s own statutes and the DCIA is authorized once the loan reaches default 

status. Additionally, BSC collects on student grant overpayments, which represent a 

very small amount of BSC’s total delinquent debt portfolio. 

• Total student loan receivables (principal and interest) serviced by BSC have increased 

from $13.975 billion at FY 2003 year-end to $23.1 billion at FY 2007 year-end; and 

collections have increased from $1.617 billion in FY 2003 to $2.675 billion in FY 

2007. 

Education’s Use of Debt Collection Tools 

(in millions)

Collection Tools FY 2003 

Collections 

FY 2004 

Collections

FY 2005 

Collections

FY 2006 

Collections 

FY 2007 

Collections 

Private Collection Agency $322 $362 $378 $410 $368

Litigation (DOJ) $27 $22 $18 $16 $13

Internal Offset $2 $2 $1 $3 $1

AWG (at Education and PCAs) $150 $186 $237 $251 $281

Treasury Offset $398 $389 $415 $402 $465

Other Tools at Education $59 $59 $50 $51 $46

Total Loan Consolidations 

(at Education and at PCAs) $290 $206 $197 $224 $179

Total Loan Rehabilitations 

(at Education and at PCAs) $369 $587 $786 $954 $1,322

• Recoveries from TOP increased by 16 percent, from FY 2006 to FY 2007. Education 

still relies heavily on PCAs and refers every eligible debt as quickly as possible to 

one of its 17 PCAs. Education effectively uses AWG to collect debts, primarily 

through its PCAs. Education also uses loan consolidations and loan rehabilitations to 

further reduce delinquencies by moving debts back into current repayment status. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

17

• PCAs rehabilitated $1.252 billion in defaulted loans in FY 2007, up significantly 

from the $954 million in FY 2006. New laws enacted as of July 1, 2006 allow 

borrowers to rehabilitate if they make 9 consecutive on-time monthly payments in a 

10 month period, which is the preferred method for borrowers to cure defaults (other 

than paying the debt in full). The PCAs have also exceeded Education’s 

expectations in this area. Education has found that the reduction in regular collection 

from $410 million in FY 2006 to $368 million in FY 2007 is due to the larger 

rehabilitation volume. 

• Education has continued its successful matching program with HHS’s National 

Directory of New Hire Database that, for FY 2007, resulted in the capture of new 

debtor location information on over 1.148 million accounts. Use of the New Hire 

Database led to an additional $511 million in student loan recoveries. 

• BSC did not receive the software components to its updated system that were needed 

to participate in TOP salary offset. This was due to a series of new congressional 

changes which became a higher priority. BSC is currently in negotiations to 

determine when a new system will be functional. At the same time, it continues to 

work with the current contractor to implement in the legacy system. Currently, there 

are no implementation dates. In the interim, Education uses all other available debt 

collection tools to collect debts owed by Federal employees. 
REPORT TO CONGRESS: RECEIVABLES AND DEBT COLLECTION ACTIVITIES OF 

FEDERAL AGENCIES 

 

18

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 2007. The table groups all other agencies into a single category. At the 

end of FY 2007, 95 percent of the receivables belonged to the 11 agencies listed in the 

table below. 

Federal Receivables and Delinquent Debt

as of September 30, 2007 

(in millions) 

Agency Ending 

Balance 

Collections Writeoffs Delinquencies Delinquencies 

> 180* 

 Currently 

Not 

Collectible 

Education $131,735 $17,884 $908 $39,233 $24,059 $371

USDA $104,807 $27,312 $821 $3,253 $2,813 $1,038

HHS $17,674 $29,195 $718 $2,302 $1,666 $7,969

SSA $14,253 $2,971 $986 $3,509 $2,495 $273

SBA $13,240 $2,374 $662 $2,012 $1,778 $1,346

HUD $10,307 $4,364 $189 $297 $178 $362

DOD $8,150 $19,658 $351 $4,450 $3,872 $250

EX/IM1 $7,278 $1,640 $93 $1,926 $1,826 $0

AID2 $6,653 $666 $2 $582 $576 $0

Energy $4,023 $5,620 $.10 $139 $106 $2,111

FATP3 $3,221 $922 $5 $1,560 $1,546 0

All Other $18,262 $47,001 $1,650 $5,618 $4,579 $2,353 

Gov’t 

Total $339,603 $159,607 $6,385 $64,881 $45,494 $16,073

1

Export Import Bank 

2

Agency for International Development 

3

Funds Appropriated to the President 

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

written off during FY 2007. 

“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. 
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 Due From the Public – Fourth Quarter 

2007, 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, Borrower Services-Collections 

 Department of the Treasury, Financial Management Service 

 Department of Health and Human Services, Program Support Center 

B & C & D – Treasury Offset Program & Cross-Servicing & Other Debt Collection 

 Activities at FMS 

 Source – Department of the Treasury, Financial Management Service 

E – HHS Debt Collection Center 

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

F – Litigation at the Department of Justice 

Source – Department of Justice, Office of Debt Collection Management 

G – Education Student Loans 

 Source - Department of Education, Borrower Services-Collections