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pdfGuaranty Agency Financial Report
(GAFR)
ED Form 2000
Instruction Guide
Revised: September 2015
Federal Student Aid
Guaranty Agency Financial
Reporting Instruction Guide
Office of Federal Student Aid
Union Center Plaza, 830 First Street, N.E. 5th Floor
Fax 202.275.3482
E-mail: mailto:[email protected]
Guaranty Agency Financial Report (GAFR) Guide
Table of Contents
Page
CERTIFICATION ..................................................................................................................10
DEFINITIONS ........................................................................................................................11
GUARANTY AGENCY FINANCIAL REPORT MONTHLY ..................................................12
Reinsurance, Trigger Figure and Collections .......................................................................13
Financial Processing ................................................................................................................16
For Fiscal Month Of Reporting .............................................................................................18
MR – 1 Claims Paid................................................................................................................18
MR 1 Claims Paid - Amount Due To/(From) Guarantor .....................................................20
MR-1-A Defaults - Principal Amount .................................................................................21
MR-1-A Defaults - Other Amounts .....................................................................................21
MR-1-B Exempt/Lender-of-last-resort- Principal Amount .................................................22
MR-1-C Death/Disability - Principal Amount .....................................................................23
MR-1-D Closed School/False Certification - Principal Amount .........................................23
MR-1-E Bankruptcy - Principal Amount .............................................................................24
MR-1-F Unpaid Refunds - Principal Amount ...................................................................25
MR-1-G Discharges .............................................................................................................25
MR-2 Borrower Payment Return (Closed School/False Certification) ..................................27
MR-2 Borrower Payment Return – Amount Due To/(FROM) Guarantor ..........................27
MR-2 Borrower Payment Return - Principal Amount .........................................................27
MR-2 Borrower Payment Return - Accrued Interest ...........................................................27
MR-2 Borrower Payment Return - Other Charges ..............................................................28
MR-3 Status Changes .............................................................................................................28
MR-3 Status Changes - Amount Due To/ (From) Guarantor ..............................................28
MR-3-A Death/Disability - Principal and Interest ...............................................................29
MR-3-B Closed School/False Certification - Principal and Interest ...................................29
MR-3-C Bankruptcy - Principal and Interest .......................................................................30
MR-4 TOP Overpayments ......................................................................................................30
MR-4 TOP Overpayments - Amount Due To/(From) Guarantor ........................................30
MR-4 TOP Overpayments – Principal .................................................................................31
MR-4 TOP Overpayments – Interest Amount .....................................................................31
MR-4 TOP Overpayments – Other Amounts ......................................................................31
MR-5 Repurchases - Current Fiscal Year (CFY) ...................................................................31
MR-5 Repurchases - CFY - Amount Due To/(From) Guarantor ........................................33
MR-5 Repurchases - CFY - Principal Amount ....................................................................33
MR-5 Repurchases - CFY - Accrued Interest Due ED ........................................................34
MR-5 Repurchases - CFY – Other Amounts .......................................................................35
MR-5-A Repurchases - CFY - Defaults...............................................................................35
MR-5-B Repurchases - CFY - Exempt /Lender-Of-Last-Resort .......................................35
MR-5-C Repurchases - CFY – Death/Disability .................................................................36
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MR-5-D Repurchases - CFY - Closed School/False Certification ......................................36
MR-5-E Repurchases - CFY - Bankruptcy (Chapter 7, 11, 12 and 13) ...............................36
MR-6 Repurchases for Reinsurance Claims Paid in Prior Fiscal Year ..................................37
MR-6 Repurchases - PFY - Amount Due To/(From) Guarantor .........................................37
MR-7 Partial Refunds - Current Fiscal Year (CFY)...............................................................38
MR-7 Partial Refunds - CFY - Amount Due To/(From) Guarantor ....................................39
MR-7-A Partial Refunds - CFY - Defaults ..........................................................................39
MR-7-B Partial Refunds - CFY – Exempt/Lender-of-Last-Resort......................................39
MR-7-C Partial Refunds – CFY – Death and Disability .....................................................40
MR-7-D Partial Refunds - CFY - Closed School or False Certification .............................40
MR-7-E Partial Refunds - CFY - Bankruptcy .....................................................................40
MR-8 Partial Refund - Previous Fiscal Year (PFY) ...............................................................40
MR-8 Partial Refunds - PFY, Amount Due To/(From) Guarantor ......................................40
MR- 9 Overstated Claims .......................................................................................................40
MR-9 Overstated Claims - Amount Due To/(From) Guarantor ..........................................41
MR-9-A Overstated Claims - Defaults ................................................................................41
MR-9-B Overstated Claims - Exempt/Lender of Last Resort .............................................41
MR-9-C Overstated Claims - Death/Disability....................................................................41
MR-9-D Overstated Claims - Closed School/False Certification ........................................41
MR-9-E Overstated Claims - Bankruptcy............................................................................41
MR-10 Rehabilitated Loans....................................................................................................42
MR-10 Rehabilitated Loan Refund - Amount Due To/(From) Guarantor ..........................43
MR-10 Rehabilitated Loans - Principal Amount .................................................................43
MR-10-A Rehabilitated Loans- Principal Amount (GA Retention) ...................................43
MR-10-A Rehabilitated Loans - Interest ...........................................................................46
MR-10-A Rehabilitated Loans - Other Charges ..................................................................46
MR-11 FFEL Consolidation Refund ......................................................................................46
MR-11 FFEL Consolidation Refund - Amount Due To/(From) Guarantor ........................46
MR-11 FFEL Consolidation Refund - Principal Amount ...................................................47
MR-11 FFEL Consolidation Refund - Interest Amount ......................................................47
MR-11 FFEL Consolidation Refund – Other Amount ........................................................47
MR-11-A FFEL Consolidation Payoff – Principal Amount ................................................47
MR-11-A FFEL Consolidation Payoff – Interest Amount ..................................................47
MR-11-B FFEL Consolidation GA Retention – Principal Amount ....................................47
MR-11-B FFEL Consolidation GA Retention - Interest Amount .......................................48
MR-11-B FFEL Consolidation GA Retention - Other Amount ..........................................48
MR-12 GA Administrative Wage Garnishment .....................................................................48
MR-12 Administrative Wage Garnishment - Amount Due To/(From) Guarantor ..............49
MR-12 Administrative Wage Garnishment – Principal Amount ........................................51
MR-12 Administrative Wage Garnishment – Interest Amount ...........................................51
MR-12 Administrative Wage Garnishment – Other Amount ..............................................51
MR-12-A Administrative Wage Garnishment –Total Collected - Principal .......................52
MR-12-A Administrative Wage Garnishment –Total Collected – Interest………………. 52
MR-12-A Administrative Wage Garnishment –Total Collected - Other.............................52
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MR-12-B Administrative Wage Garnishment – GA Retention – Principal ........................52
MR-12-B Administrative Wage Garnishment – GA Retention - Interest ...........................52
MR-12-B Administrative Wage Garnishment – GA Retention - Other ..............................52
MR-13 Default Collections ....................................................................................................52
MR-13 Default Collections - Amount Due To/(From) Guarantor.......................................53
MR-13 Default Collections – Principal Amount .................................................................55
MR-13 Default Collections – Interest Amount ....................................................................55
MR-13 Default Collections – Other Amount.......................................................................55
MR-13-A Default Collections –Total Collected - Principal ................................................55
MR-13-A Default Collections –Total Collected - Interest ..................................................55
MR-13-A Default Collections –Total Collected - Other .....................................................55
MR-13-B Default Collections – GA Retention - Principal ..................................................55
MR-13-B Default Collections – GA Retention - Interest ....................................................56
MR-13-B Default Collections – GA Retention - Other .......................................................56
MR-14 Bankruptcy Collections ..............................................................................................56
MR-14 Bankruptcy Collections - Amount Due To/(From) Guarantor ................................57
MR-14 Bankruptcy Collections – Principal Amount...........................................................57
MR-14 Bankruptcy Collections – Interest Amount .............................................................57
MR-14 Bankruptcy Collections – Other Amount ................................................................57
MR-15 Default FFEL Consolidated by DL Fee – Amount Due To/(From) Guarantor .........57
MR-16 Total ...........................................................................................................................58
NON-PAYMENT ACTIVITY (Accounting Data) ...............................................................59
Treasury Offset Program (TOP) ...........................................................................................59
Principal Amounts Column..................................................................................................60
Interest Amounts Column ....................................................................................................60
Other Amounts Column .......................................................................................................60
MR-17 Treasury Offset ........................................................................................................60
MR-18 Non-Federal Share Offset ........................................................................................60
MR-19 Treasury Offset Reversals .......................................................................................61
Status Changes - Account Balance at Conversion................................................................61
Account Balance at Conversion – Principal Amounts Column ...........................................60
Account Balance At Conversion - Interest Amounts Column .............................................62
Account Balance At Conversion - Other Amounts Column................................................62
MR-20 Default/LLR to Death and Disability ......................................................................62
MR-21 Default/LLR to Closed School/False Certification .................................................62
MR-22 Default/LLR to Bankruptcy.....................................................................................63
MR-23 Bankruptcy to Default/LLR.....................................................................................63
Agency Accruals (Accounting Entries) .................................................................................63
Principal Amounts Column..................................................................................................64
Interest Amounts Column ....................................................................................................64
Other Amounts Column…………………………………………………………………... 64
MR-24 Collection Terminations ..........................................................................................63
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MR-25 Compromises………………….……......………………………………………… 65
MR-26 Agency’s Accruals ..................................................................................................65
GUARANTY AGENCY FINANCIAL REPORT MONTHLY/QUARTERLY .........................66
Agency Accruals (Information)..............................................................................................66
Principal Amounts Column..................................................................................................66
Interest Amounts Column ....................................................................................................66
Other Amounts Column .......................................................................................................67
MR-27 Default FFELP Loans Consolidated By Direct Loan Program ...............................67
MR-28 Subrogated Loans ....................................................................................................67
MR-29 Default Loans Transferred Out................................................................................67
MR-30 Default Loans Transferred In ..................................................................................67
MR-31 Other Transactions Affecting Federal Receivable ..................................................67
MR-32 Ending Balance of Defaulted Loans ........................................................................68
Delinquency by Debt ...............................................................................................................70
MR-33 Not Delinquent ........................................................................................................70
MR-34 (1 – 90 Days) ...........................................................................................................70
MR-40 Over 10 Years ..........................................................................................................70
Bankruptcy Reporting ............................................................................................................71
MR-41 Ending Balance on Bankruptcies ............................................................................71
MR-42 Bankruptcies Transferred Out .................................................................................71
GUARANTY AGENCY FINANCIAL REPORT ANNUAL .....................................................72
Loans in Repayment ...............................................................................................................73
AR- 1 Loans Guaranteed (Except Federal Consolidation) ..................................................73
AR- 2 All Loans Canceled (Except Federal Consolidation) ................................................74
AR- 3 Federal Consolidation Loans Guaranteed .................................................................74
AR- 4 Federal Consolidation All Loans Canc1eled .............................................................74
AR- 5 Uninsured Loans .......................................................................................................74
AR- 6 Loans Transferred In .................................................................................................75
AR- 7 Loans Transferred Out ..............................................................................................75
AR- 8 Default Claims Paid ..................................................................................................75
AR- 9 Bankruptcy Claims Paid............................................................................................76
AR-10 Death and Disability Claims Paid ............................................................................77
AR-11 Closed School/False Certification Claims Paid .......................................................77
AR-12 Loans Paid-In-Full ...................................................................................................78
AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans ....................................78
AR-14 Total Loans in Deferment Prior to First Payment………………………………… 78
Financial Report Introduction ...............................................................................................79
Federal Fund............................................................................................................................79
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AR-15 Beginning Balance (from AR-26 as of 9/30/XX)………………………………… 79
AR-16 Investment Income ...................................................................................................79
AR-17 Reinsurance from ED ...............................................................................................80
AR-18 Collections of Defaulted Loans – Reinsurance Complement ..................................80
AR-19 Insurance Premiums .................................................................................................80
AR-20 Other Revenues ........................................................................................................80
AR-21 Claims Expensed to Lenders ....................................................................................81
AR-22 Recall of Federal Funds to the Restricted Account ..................................................81
AR-23 Transfer to Operating Fund for Default Aversion....................................................81
AR-24 Transfer to Operating Fund for Account Maintenance Fee .....................................81
AR-25 Other Expenses ........................................................................................................82
AR-26 Ending Balance ........................................................................................................82
AR-27 Amount transferred from Federal Fund to Operating Fund for Operating Expenses
(Repayable) ..............................................................................................................82
AR-28 Amount received from Operating Fund to Repay Advance for Operating Exp….. 82
Operating Fund .......................................................................................................................83
AR-29 Beginning Balance (from 9/30/XX) .........................................................................83
AR-30 Default Aversion Fee Revenue ................................................................................83
AR-31 Loan Processing and Issuance Fee Revenue ............................................................83
AR-32 Account Maintenance Fee Revenue Received from ED ..........................................83
AR-33 Transfer from Federal Fund for Account Maintenance Fee ....................................83
AR-34 Collections of Defaulted Loans less Reinsurance Complement (GA Collection
Retention) .................................................................................................................83
AR-35 Investment Income ...................................................................................................84
AR-36 Other Revenue (FFEL and Non-FFEL) ...................................................................85
AR-37 Collections of Defaulted Loans (Secretary Equitable Share) ..................................85
AR-38 Operating Expenses..................................................................................................85
AR-39 Other Expenditures (FFEL and Non-FFEL) ............................................................85
AR-40 Ending Balance ........................................................................................................86
Supplemental Information .....................................................................................................86
AR-41 Amount Received from Federal Fund for Operating Expenses (Repayable) .........86
AR-42 Amount Repaid to Federal Fund for Operating Expenses .......................................86
Restricted Account ..................................................................................................................86
AR-43 Beginning Balance (from 9/30/XX) .........................................................................86
AR-44 Recall of Federal Funds from Federal Fund ............................................................86
AR-45 Investment Income on Restricted Account ..............................................................86
AR-46 Investment Income on Restricted Account Expensed for Default Prevention.........87
AR-47 Ending Balance ........................................................................................................87
Balance Sheet Section (Federal Fund) ...................................................................................87
AR-48 Cash, Cash Equivalents and Investments…………………………………………. 87
AR-49 Restricted Account Cash, Cash Equivalents and Investments .................................87
AR-50 Net Investment in Property, Plant, Equipment and Inventory .................................87
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AR-51 Accounts Receivable from the ED……………..…………………………………. 87
AR-52 Other Assets .............................................................................................................87
AR-53 Accounts Payable, Accrued Expenses and Other Current Liabilities…………….. 87
AR-54 Accounts Payable to ED ..........................................................................................88
AR-55 Other Liabilities .......................................................................................................88
AR-56 Allowances and Other Non-Cash Charges to Federal Fund ....................................88
AR-57 Federal Fund Balance ...............................................................................................88
ATTACHMENT A – Federal Fund Itemized Schedule ......................................................89
ATTACHMENT B – Operating Fund Itemized Schedule ..................................................90
ATTACHMENT C – Balance Sheet Section Itemized Schedule ........................................91
ATTACHMENT D – Guaranty Agency List........................................................................92
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INTRODUCTION
Guaranty agencies use the Guaranty Agency Financial Report to request payments from and make
payments to the Department of Education (ED) under the Federal Family Education Loan (FFEL)
Program, which is authorized by Title IV, Part B of the Higher Education Act of 1965, as amended
(HEA). ED also uses this information to monitor the agency’s financial activities, including activities
concerning its federal fund and operating fund. Guaranty agencies perform certain activities in
connection with the following types of loans under the FFEL Program.
The Robert T. Stafford Student Loan Program (also known as Federal Stafford Loans or
Subsidized Stafford Loans)
Federal PLUS Loans,
Federal Supplemental Loans for Students (Federal SLS) ceased originating new loans effective
July 1, 1994,
Federal Consolidation Loans, and
Unsubsidized Stafford Loans for Middle-Income Borrowers (Unsubsidized Stafford Loans).
NOTE: Loans guaranteed under Non-FFEL Programs but administered by the guaranty agency are
not to be included in this report. An example of a non-FFEL program is a student loan program
established by State law and operated entirely with State funds for individuals pursuing a particular course
of study.
Guaranty agencies must maintain detailed records to support each entry on the Guaranty Agency
Financial Report and be able to reconstruct the entries back to individual loan, borrower or lender levels,
or to specific guaranty agency level transactions. This includes keeping accurate records of reinsurance
payments and collections on defaulted loans at the loan and borrower level. All records must be available
for verification by the Secretary of Education or other authorized representatives of the U.S.
Government.
Information on the Guaranty Agency Financial Report must be consistent with and comparable to
relevant information reported to the National Student Loan Data System (NSLDS) by the guaranty
agency.
Guaranty agencies are required to maintain all records in the manner and for the period of time set
forth in the Department’s regulations. Detail records and reports are to be included in the compliance
audit requirements in accordance with 34 CFR 682.410(b) as required in the A-133 Audit Guide.
These instructions provide information on how to complete each item on the Guaranty
Agency Financial Report. However, they do not restate in their entirety the laws, regulations,
and policy bulletins which may apply to an item on the form. The following material should be
consulted when completing this report: The Higher Education Reconciliation Act of 2005
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The Higher Education Act of 1965, as amended, and in particular, Title IV, Part B (20 U.S.C.
1071 et seq.)
The code of Federal Regulations, Department of Education, 34 CFR Part 682, Federal Family
Education Loan Program (formerly Guaranteed Student Loan and PLUS Programs), and 34
CFR Part 668, Student Assistance General Provisions, and
For a complete listing of FSA communications: including FSA Bulletins and Dear Colleague
Letters go to: http://www.ifap.ed.gov
NOTE: The FFEL Program has frequent changes in laws, regulations, and policies. A
guaranty agency is responsible for complying with all current laws, regulations, and policies,
and for ensuring that any information provided on the Guaranty Agency Monthly/Annual
Financial Report conforms to them.
CERTIFICATION
Guaranty agency-related financial transactions are now being recorded electronically in the Federal
Student Aid (FSA) Financial Management System (FMS). By completing the U.S. Department of
Education Organization Participation Agreement (OPA) you are certifying that your Guaranty Agency
Financial Report (ED Form 2000) is a legally binding document that will cover two years. By signing and
returning this form, you will no longer need to mail paper ‘signature pages’ after you submit your Form
2000 electronically. A copy of the OPA can be found on the Financial Partners Portal at
http://fp.ed.gov/fms.html.
Original signature documents should be mailed to:
Federal Student Aid
Finance Office
Financial Management Division
830 First Street, N.E., 5th Floor
Washington, DC 20202-5455
If you have any questions, please contact us at: [email protected]
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DEFINITIONS
Capitalized interest: The FFEL Program allows a lender to convert interest to principal under
certain conditions. This report will refer to this conversion and interest as “interest capitalized by the
lender.” Once the lender capitalizes interest, it is not separately referenced. Instead, the capitalized
interest and the original loan amount together are referred to as principal.
Guaranty agency claim interest. Interest calculated by the guaranty agency on the loan principal
while a lender’s insurance claim is being processed by the guaranty agency and which is eligible for
reinsurance from ED. It is paid to the lender by the guaranty agency as part of an insurance claim.
Non-reinsured guaranty agency (GA) interest: Interest that is not reinsured by ED. This category
includes interest that is calculated on the loan principal while a lender’s insurance claim is being processed
by the guaranty agency. This interest must be paid to the lender by the guaranty agency but is not eligible
for reinsurance from ED. However, the Secretary of Education is entitled to an equitable share of any of
this interest collected from a borrower.
Purchased interest: Interest a guaranty agency pays to a lender at the time an insurance claim is paid.
It consists of lender interest, guaranty agency claim interest and non-reinsured GA interest, as defined
above. The guaranty agency must capitalize all purchased interest and treat it as part of the principal
balance.
Accrued interest. Interest calculated by the guaranty agency (not the lender) on the loan principal on
a collection account for collection from the borrower after an insurance claim is paid to a lender.
Principal: Once a claim has been paid to a lender the principal amount of the claim plus the
purchased interest paid to the lender is referred to as principal.
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GUARANTY AGENCY
FINANCIAL REPORT
MONTHLY
1
Chapter
Guaranty agencies report to ED on a monthly basis to request payments for default, bankruptcy,
death, disability, closed school, false certification, and lender of last-resort-loan (default) claims.
This report is also used to report unpaid school refunds and teacher loan forgiveness discharges. An
agency also uses the form to make payments for amounts due ED for collections on default and
lender-of-last-resort loan (default) claims on which reinsurance was paid, and for refunding amounts
previously paid for reinsurance claims. Reference the Financial Management System Guaranty
Agency Guide posted at: http://www.fp.ed.gov/fms.html, for completing the on-line forms.
Prior to July 1, 2006, guaranty agencies were required to file a claim for reimbursement within 45
days after the guaranty agency discharged its insurance obligation on the loan, however, effective for
July 1, 2006 the claim filing time has been reduced to 30 days. In order to provide a mechanism for
guaranty agencies to comply with the 30-day provision, ED has developed a Supplemental Claims
Invoicing process. The supplemental claims process will allow a guaranty agency to report
reinsurance claims on a bi-monthly basis. Procedures for supplemental claims processing are posted
at the link referenced above. The Supplemental Claims Invoice process has no impact on regular
monthly GAFR reporting, i.e., all monthly activity, including the Supplemental Claims Invoice
amounts should be included in the monthly GAFR submission.
The Monthly Report requires summary information only concerning guaranty agency’s claims,
collections, and related activity over a monthly period. A guaranty agency can submit only one
monthly report for any month. Additional submissions for the same monthly period will be rejected
and the agency will be requested to submit the material in its next monthly submission.
After ED accepts an agency’s monthly submission, no further corrections or adjustments can be
made. Errors have to be rectified by submitting the appropriate information in a later submission.
When the monthly report is accepted, the guaranty agency can access their statement of account,
which will reflect the financial activity that has occurred during the month. Any net payment due an
agency in relation to this processing is electronically transferred to the agency’s financial institution
approximately 30 days after ED receives an acceptable report.
Unless otherwise specified, report only on activities on loans guaranteed under the FFEL Program at
the time the loan guarantee was issued and which are eligible for, or on which reinsurance was paid.
Loans guaranteed under other programs administered by the guaranty agency are not to be included in
this report.
Enter all dollar amounts greater than zero to the nearest cent, and include the decimal point.
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Reinsurance, Trigger Figure and Collections
FFEL Program loans that a lender makes to a borrower are insured by a guaranty agency. When a
lender is unable to collect on a loan, it files an insurance claim with the guaranty agency. Guaranty agencies
pay lender insurance claims on defaulted loans and insurance claims submitted by exceptional performers
based on the following chart.
Description
Lender Insurance (Loan 1st
Disbursed Before 10/1/93)
Lender Insurance (Loan 1st
Disbursed On/After 10/1/93
and Before 10/1/98)
Lender Insurance (Loan 1st
Disbursed On/After 10/1/98
and Before 7/1/06)
Lender Insurance (Loan 1st
Disbursed On/After 7/1/06)
and Before 7/1/10)
Lender Insurance for Exempt
Claims (Loan 1st Disbursed
Before 7/1/06)
Lender Insurance for Exempt
Claims (Loan 1st Disbursed
On/After 7/1/06)
Exceptional Performer (Claim
Submitted Before 7/1/06)
Exceptional Performer (Claim
Submitted On/After 7/1/06)
and Before 10/1/07
Exceptional Performer
Designation Eliminated,
effective 10/1/07
Reimbursement
Rate (GA to
Lender)
Reimbursement
Amount to
Lender
Reimbursement
Rate (ED to GA)
$1,000.00
100%
$1,000.00
100%
$1,000.00
$1,000.00
98%
$1,000.00
98%
$980.00
$1,000.00
98%
$980.00
95%
$931.00
$1,000.00
97%
$970.00
95%
$921.50
$1,000.00
98%
$980.00
95%
$931.00
$1,000.00
100%
$1,000.00
100%
$1,000.00
$1,000.00
100%
$1,000.00
95%
$950.00
$1,000.00
99%
$990.00
95%
$940.50
N/A
N/A
N/A
N/A
N/A
Loan
Amount/
Claim Amount
Reimbursement
Amount to GA
Note: This chart does not take into consideration “trigger figures rates,” i.e., when claims exceed 5% or
9% of loans in repayment.
ED reimburses the agency for part of its losses. This report is used to request these reimbursements.
ED reimburses guaranty agencies on the following types of claims:
Default
Exempt and lender-of-last-resort loan (defaults)
Bankruptcy (Chapters 7, 11, 12 and 13)
Death or disability
Closed school or false certification
Unpaid refunds
Discharges (teacher loan forgiveness)
Definitions of each of these claim types are given in the instructions. In general, ED reimburses a
guaranty agency for 100 percent of its losses of all claim types above except default claims, which are
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Guaranty Agency Financial Report (GAFR) Guide
subject to reduced reimbursement rates. For purposes of reinsurance, a guaranty agency’s losses consist
of loan principal, lender interest and guaranty agency claim interest. Non-reinsured GA interest is not
eligible for reinsurance, even though the guaranty agency must pay it to lenders.
Default claims on loan guarantees transferred to a guaranty agency under a plan approved by the
Secretary, regardless of the first disbursement date, are always reimbursed at 100, 90 or 80 percent.
Exempt claims are defined as claims with respect to loans for which it is determined that the borrower
(or the student on whose behalf a parent has borrowed), without the lender’s or the institution’s
knowledge at the time the loan was made, provided false or erroneous information or took actions that
caused the borrower or the student to be ineligible for all or a portion of the loan or for interest benefits
thereon. Exempt claims, on loans disbursed on or after July 1, 2006, are reimbursed for 100 percent of a
guaranty agency’s reinsured losses.
Lender-of-last-resort loans are loans made only to students who are otherwise unable to obtain loans.
A lender-of-last-resort loan (default) claim is one on which the borrower failed to make an installment
payment when due, as defined in the regulations. These claims are always reimbursed for 100 percent of
their reinsured losses.
ED reimburses a guaranty agency (§682.404) for –
100, 90 or 80 percent of its losses on default claims when the loan was first disbursed before
October 1, 1993;
98, 88 or 78 percent of its losses on loans first disbursed on or after October 1, 1993 but
before October 1, 1998; and
95, 85 or 75 percent of its losses on loans first disbursed on or after October 1, 1998.
Default claims are subject to certain “trigger figures” which results in a reduced reimbursement rate.
At the beginning of each federal fiscal year, ED calculates the trigger figure for each guaranty agency. The
trigger figures are equal to 5 percent and 9 percent of the guaranty agency’s loans in repayment at the end
of the prior fiscal year.
When default claim losses exceed 5 percent of the loans in repayment it “triggers” ED to reimburse
the agency for only—
90 percent of its default claim losses on loans first disbursed before October 1, 1993;
88 percent of its default claim losses on loans first disbursed on or after October 1, 1993 but
before October 1, 1998; and
85 percent of its default claim losses on loans first disbursed on or after October 1, 1998.
When default claim losses exceed 9 percent of loans in repayment, it “triggers” ED to reimburse
the agency for only—
80 percent of an agency’s default claim losses on loans first disbursed before October 1, 1993;
78 percent of an agency’s default claim losses on loans first disbursed on or after October 1,
1993 but before October 1, 1998; and
75 percent of an agency’s default claim losses on loans first disbursed on or after October 1,
1998.
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Guaranty Agency Financial Report (GAFR) Guide
These reduced rates are generally referred to as “reduced reimbursement rates.” The difference
between the default claim amount paid to the lender and the “reduced reimbursement rate” is the agency’s
“reinsurance complement.”
Once a default claim is paid to a lender, the guaranty agency becomes the holder of the loan and must
seek to collect on the loan from the borrower. Since ED reimburses a guaranty agency on defaults, the
guaranty agency must return to ED a portion of the amount it collects from the borrower. If ED
reimbursed the guaranty agency at 98, 95, 90, 88, 85, 80, 78, or 75 percent of the default claim paid to the
lender, then the agency’s complement on collections from borrowers would be 2, 5, 10, 12, 15, 20, 22 or
25 percent.
The guaranty agency is also allowed to retain—
30 percent of the amount of collections received prior to October 1, 1993;
27 percent of the amount of collections received on or after October 1, 1993 and before
October 1, 1998;
24 percent of the amount of collections received on or after October 1, 1998 and before
October 1, 2003;
23 percent of the amount of collections received on or after October 1, 2003 and before
October 1, 2007, and
16 percent of the amount of collections received on or after October 1, 2007.
The amount of the collections, which a guaranty agency must return to ED, is referred to as the
“Secretary’s (of Education) equitable share” of collections. The formula for calculating the Federal share
of collections is [total collected less reinsurance complement less GA retention = Federal share of
collections].
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Financial Processing
When ED accepts an agency’s monthly report, the system generates a statement of account that
provides financial information related to its monthly submission. This statement is a summary of all
monthly activity reported since the last statement was generated. Examples of information the statement
provides are: the amount of money ED owes the agency for reinsurance and other claims; the agency’s
standing in relation to a reduction in its reimbursement percentage (the “trigger figure”); and the amount
of money the agency owes ED for collections on defaulted loans.
Reinsurance claim transactions are considered by ED to occur on the date a guaranty agency’s
monthly report is paid by electronic funds transfer (EFT) by ED.
An agency’s “trigger figure” is adjusted for the fiscal year in which the approval date falls. This is not
necessarily the same fiscal year in which:
the guaranty agency paid the claim to the lender;
the guaranty agency reported the transactions to ED; or
the guaranty agency received the reinsurance payment from ED.
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Trigger figure calculation formula
Loans In Repayment2
5% Trigger = Loans In Repayment * 5%
9% Trigger = Loans In Repayment * 9%
Amount Requested Fiscal Year to Date (FYTD)3
Dollars Paid Fiscal Year to Date4
Rehabilitated Loans Applied - FYTD5
Rehabilitated Loans Unapplied – Carry Over CFY5
Rehabilitated Loans Applied – PFY6
Refunds Applied – FYTD7
Refunds Unapplied – Carry Over CFY8
Refunds Applied – PFY9
Trigger Basis Amount10
Percent of Request Paid11
Trigger Rate12
$683,877,349.00
$ 34,193,867.45
$ 61,548,961.41
$ 19,826,542.97
$ 19,346,754.82
$ 1,327,585.47
$
32,696.30
$ 17,986,473.05
97.58%
2.63%
Loans In Repayment [AR-1 (-) AR-2 (+) AR-3 (-) AR-4 (-) AR-5 (+) AR-6 (-) AR-7 (-) AR-8 (-) AR-9
(-) AR-10 (-) AR-11 (-) AR-12 (-) AR-13 (-) AR-14]
2
3
Amount Requested Fiscal Year To Date = FYTD Total MR-1-A, “Other Amounts.”
4
Dollars Paid Fiscal Year To Date = FYTD Total MR-1-A, “Principal Amount”.
Rehabilitated Loans Applied FYTD = FYTD Total MR-10, “Default Principal Amount”, until GA hits
5% trigger.
5
5 Rehabilitated
Loan Unapplied – Carry Over CFY. After GA hits 5% trigger, rehabilitated loans will be
stored for credit to the next fiscal year.
6 Rehabilitated
Loan Applied – PFY. This field will be populated when a GA hits the 5% trigger in the
prior fiscal year and they had an amount in “Rehabilitated Loan Unapplied – Carry Over CFY.”
7 Refunds
Applied FYTD = FYTD Total MR-7-A, Partial Refunds, Defaults, Principal Amount + FYTD
MR-5-A, Repurchases CFY, Defaults, Principal Amount, if GA has a repurchase agreement.
8 Refunds
Unapplied = Carry Over CFY. After GA hits 5% trigger, refunds will be stored for credit to
the next fiscal year.
9 Refunds
Applied = Carry Over PFY. This field will be populated when a GA hit the 5% trigger in the
prior fiscal year and they had an amount in “Refunds Unapplied – Carry Over CFY.”
10 Trigger
Basis Amount = Dollars Paid FYTD less Rehabilitated Loans Applied less Refunds Applied.
11 Percent
of Request Paid = Dollars Paid FYTD/Amount Requested FYTD.
12 Trigger
Rate = (Trigger Basis Amount/Loans in Repayment)*100.
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Collections, on defaulted loans, are considered submitted to ED on the date the monthly report is
received by ED. Amounts due the agency are sent to the agency’s financial institution via electronic funds
transfer (ACH) within 30 days after the date of receipt of an error-free report. ED will process an
agency’s forms in the order they are accepted.
ED may offset the amounts that a guaranty agency owes ED against amounts ED owes the agency.
In most cases, this will result in the agency receiving an electronic funds transfer for the difference. In
those cases where the agency still owes ED money after offset, then the agency’s monthly statement will
reflect the balance due ED. The agency may also elect to have the balance deducted from by Account
Maintenance Fees payments that are processed during the applicable reporting period. Otherwise, the
GA should remit funds owed to ED within two business days of submitting the monthly report.
An agency must submit payments to ED via Fedwire or on-line via Pay.gov.
For additional information or instructions, contact the Guaranty Agency Reporting Team via e-mail at
[email protected].
Please consult the Guaranty Agency User Guide for accessing the Financial Management System
(FMS) when completing the GAFR web application. The user guide can be found at this site:
http://www.fp.ed.gov/fms.html
For Fiscal Month Of Reporting
When entering the federal fiscal month and federal fiscal year of the month through which activity is
being reported always use numbers to stand for the federal fiscal month and year and enter the date as
MM/CCYY. An example of the fiscal month and federal fiscal year is as follows: October 2005 =
01/2006 and September 2006 = 12/2006
Line items MR-1 through MR-23 contain guaranty agency monthly activity and all activity from prior
periods being reported at this time. Line items MR-24 through MR-26 contain guaranty agency monthly
activity only.
MR – 1 Claims Paid
This section is used to request reimbursement for default and other FFEL program claims paid by
the guaranty agency to lenders for loan principal and interest. The categories of FFEL program
claims are: default, exempt (include claims where the student has been convicted of, or plead nolo
contendere or guilty to, a crime involving fraud in obtaining title IV student aid and claims where the
borrower is a victim of identity theft), lender-of-last-resort, bankruptcy, death, disability, closed
school, false certification, unpaid refunds and (teacher loan forgiveness) discharges.
Include the original reimbursement request and any additional reimbursement requests. Additional
reimbursement requests are used in situations where either the lender or the guaranty agency did not
receive the full payment, to which they were legally entitled, when the claim was originally processed,
by the guaranty agency or ED. Also, use this section to request additional reinsurance
reimbursement on a default claim when the status changes to exempt and the guaranty agency is
entitled to 100 percent reimbursement.
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If the agency receives a borrower payment from the lender after the date of the lender’s claim
payment, reduce the reinsurance claim request amount (MR-1-A, Claims Paid) and the lender claim
amount (MR-1-A, Other Amounts) by the payment amount.
If the agency receives a borrower payment from the lender after the guaranty agency requests
reimbursement from ED, treat the payment as a refund and report the payment amount in MR-7,
Partial Refunds-CFY if the reinsurance is paid in the current fiscal year. If the reinsurance is paid in a
prior fiscal year, report the payment amount in MR-8, Partial Refunds-PFY.
If the agency receives a payment directly from the borrower, after the date of the lenders’ claim
payment, treat the payment as a collection and report these amounts in MR-12, GA Administrative
Wage Garnishment, MR-13, Default Collections, or MR-14, Bankruptcy Collections, as appropriate.
If the guaranty agency paid a default or lender-of-last-resort loan (default) claim to a lender because
the borrower could not be located, then it can request reimbursement on the loan only if the agency
certifies that the lender has made a diligent attempt to locate the borrower through the use of
reasonable skip-tracing techniques, including contact with the school the borrower attended, in
accordance with the HEA and ED regulations. The guaranty agency must certify that skip-tracing
attempts were made at the time reimbursement is requested.
This amount reported in MR-1, Claims Paid does not include amounts paid to lenders for other
items such as late charges, collection costs, and attorney’s fees. Also excluded is non-reinsured GA
interest.
The Secretary pays accrued interest on a bankruptcy claim if the guaranty agency was required to
hold the loan until it was discharged in bankruptcy. A bankruptcy claim paid to a lender prior to July
23, 1992 may meet this condition. A Chapter 7, 11 or 12 bankruptcy claim paid to the lender when
the borrower filed for discharge on the grounds of undue hardship, and the loan is subsequently
discharged, also meets this condition. For such a bankruptcy claim, the guaranty agency is entitled to
receive interest, which accrued (but was held in forbearance) on the discharged loan from the date
the guaranty agency paid the lender through the earlier of:
60 days after the date the loan was discharged or
The date the agency’s reinsurance claim is paid by ED.
The lender should repurchase bankruptcy claims paid to lenders prior to July 23, 1992, on which the
borrower has not filed for a hardship discharge, and the reinsurance amount has been returned to
ED.
In the case where the agency submits its claim less than 60 days after the loan was discharged, the
agency will be unable to calculate the total amount of accrued interest due because it does not know
the date that ED will authorize the reinsurance claim to be paid. Therefore, the agency may calculate
the amount of interest that accrued through the date the agency files the reinsurance claim and report
it in this item. After the agency received payment from ED for the claim, the agency may calculate
the additional interest that has accrued from the date the agency submitted the claim through the
earlier of the date ED authorized payment of the claim or the 60th day after the loan was discharged.
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Unless an agency is, otherwise, notified by ED, the date ED authorized payment of a claim is the
date the agency received the payment. The additional interest amount may be claimed in this item.
If the guaranty agency is holding a bankruptcy claim paid to a lender and the Bankruptcy Court
proceedings have been concluded without the loan being discharged, then the guaranty agency may
not file for reinsurance on the loan as a bankruptcy. Instead, the loan goes back into repayment, with
any interest that accrued during the bankruptcy proceedings being capitalized. The loan must either
be repurchased by a lender or collected on by the guaranty agency in accordance with program
regulations. If the loan later goes into default, the guaranty agency may file a default reinsurance
claim with ED at that time.
For a loan on which a bankruptcy claim is paid to a lender on or after July 23, 1992 and the guaranty
agency was not required to hold the claim, the guaranty agency can file for reinsurance at once. The
guaranty agency is not entitled to interest that accrues on such a bankruptcy claim between the time
the guaranty agency paid the lender and ED pays the agency.
MR 1 Claims Paid - Amount Due To/ (From) Guarantor
This amount is the total reimbursement the guaranty agency is requesting from ED (original and
additional requests) for all types of claims (i.e., default, exempt, lender-of-last-resort, death,
disability, closed school, false certification, bankruptcy, unpaid refunds and teacher loan
forgiveness discharges). This is a system-calculated field that does not allow guaranty agency
input.
Example: The guaranty agency payment to the lender is $9,800, based on the lenders’
requested amount of $10,000 on a default loan (not exempt or LLR) first disbursed on or
after 10/1/98 and before 7/1/06 (i.e., 95% reinsurance reimbursement rate); a $2,000
death/disability claim request from the lender; and a $100 borrower payment from the
lender after the lender’s default claim was paid but prior to guaranty agency’s request for
reinsurance. The guaranty agency’s reporting would be as follows:
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ITEM
NO.
CATEGORY
MR-1
Claims Paid
MR-1-A
Defaults – Net
AMOUNT
DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
OTHER
AMOUNTS
$11,210.00
$9,210.00
M MR-1-B Ex Exempt/Lender-of-last-resort
$9,800.00
$ 0.00
MR-1-C
Death/Disability
$2,000.00
MR-1-D
Closed School/False Certification
$ 0.00
MR-1-E
Bankruptcy
$ 0.00
MR-1-F
Unpaid Refunds
$ 0.00
MR-1-G
Discharges
$ 0.00
MR-1-A Defaults - Principal Amount
Enter amounts for default claims (original and additional requests) for this reporting period. A
default claim is one on which the borrower and endorser, if any, or joint borrowers on a PLUS
or Consolidation loan, failed to make an installment payment when due, or to meet other terms
of the promissory note, if the Secretary or guaranty agency finds it reasonable to conclude that
the borrower or endorser, if any, no longer intend to honor the obligation to repay—
for loans delinquent before 10/7/98, provided that this failure persists for (1) 180
days for a loan payable in monthly installments; or (2) 240 days for a loan payable in
less frequent installments or
for loans delinquent on/after 10/7/98, provided that this failure persists for (1) 270
days for a loan payable in monthly installments; or (2) 330 days for a loan payable in
less frequent installments.
Also, include in this line item any request for reinsurance for loans that default after transfer
from an insolvent agency under a plan approved by the Secretary.
The total reimbursement request amount from ED is calculated by multiplying amounts paid to
lenders, for default claims, by the appropriate reinsurance reimbursement rate (based on date of
the loans first disbursement) and taking into consideration whether or not the agency has hit
either their 5% or 9% trigger.
MR-1-A Defaults - Other Amounts
This line item is the total amount of original and additional payments made by the guaranty
agency to lenders for default claims. The amount should include principal and interest paid to
lenders, and guaranty agency claim interest, for default claims.
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Example: The guaranty agency payment to the lender is $9,800, based on the lender
requested amount of $10,000 on a default (not exempt or LLR) loan first disbursed on or
after 10/1/98 and before 7/1/06 (i.e., .95% reinsurance reimbursement rate). The guaranty
agency’s reporting would be as follows:
ITEM
NO.
CATEGORY
MR-1
Claims Paid
MR-1-A
Defaults – Net
AMOUNT
DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
OTHER
AMOUNTS
$9,310.00
$9,800.00
$9,310.00
MR-1-B Exempt/Lender-of-last-resort- Principal Amount
Enter amounts for exempt and lender-of-last-resort (default) claims (original and additional
requests) for this reporting period.
Exempt claims are filed in situations where the lender determines that the borrower or the
student on whose behalf a parent has borrowed, without the lender or school’s knowledge at the
time the loan was made, provided false or erroneous information or took actions that caused the
student or borrower to be ineligible for all or a portion of a loan. Also include claims where the
student has been convicted of, or plead nolo contendere to, a crime involving fraud in obtaining
title IV student aid and cases where the borrower is a victim of identity theft. Exempt claims are
exempt from the agency’s reinsurance trigger calculation, are insured at 100 percent and are
reimbursed at 100 percent for loan disbursements made on/after July 1, 2006.
Lender-of-last-resort loans are loans made only to students who are otherwise unable to obtain
loans. A lender-of-last-resort (default) claim is one on which the borrower and endorser, if any,
failed to make an installment payment when due, or to meet other terms of the promissory note.
Lender -of-last-resort loans are always reimbursed at 100%.
Example: The lender’s request to the guarantor is $1,000 on an exempt claim that was first
disbursed on or after 7/1/06, and a lender-of-last-resort claim for $5,000. The amount
reported in MR-1-B would be $1,000plus $5,000. The guaranty agency’s reporting on would
be as follows:
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CATEGORY
ITEM
NO.
AMOUNT DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
MR-1
Claims Paid
MR-1-A
Defaults – Net
MR-1-B
Exempt/Lender-of-last-resort
MR-1-C
Death/Disability
$0.00
MR-1-D
Closed School/False Certification
$ 0.00
MR-1-E
Bankruptcy
$ 0.00
MR-1-F
Unpaid Refunds
$ 0.00
MR-1-G
Discharges
$ 0.00
INTEREST
AMOUNT
OTHER
AMOUNTS
6,000.00
0.00
6,000.00
MR-1-C Death/Disability - Principal Amount
Enter amounts for death and total disability claims (original and additional requests) for this
reporting period. A death claim is one on which the loan is discharged due to the borrower’s
death. This includes a Federal PLUS loan for a death claim paid to a lender when a student, on
whose behalf a parent received the Federal PLUS loan, dies. A disability claim is one on which
the loan is conditionally discharged due to the total and permanent disability of the borrower.
If a death or disability claim is filed after a default claim was paid to the lender, and the
reinsurance claim was paid at less than 100 percent of principal and interest, then the
complement of the reinsurance may be requested using MR-3, Status Change. If a death or
disability claim is filed after a default or lender-of-last-resort loan (default) claim was paid at 100
percent, even though no further reinsurance is due the agency, this change in status is reported in
the Non-Payment Activity section, MR-20, Default/Lender of Last Resort to Death or
Disability.
Beginning July 1, 2013, upon notification by the Department that the borrower qualifies for a
Total and Permanent Disability (TPD) Discharge, the guaranty agency notifies the borrower of
the discharge and refunds any payments that were made to the GA on or after the effective date
of the discharge or effective date of the grant of disability by the Veterans Administration. The
refund should be reported on this line item.
MR-1-D Closed School/False Certification - Principal Amount
Enter amounts for closed school or false certification claims (original and additional requests) for
this reporting period. A closed school claim is one on which a claim is paid to a lender because
the student was unable to complete the program in which the student was enrolled due to the
closure of the institution. A false certification claim is one on which a claim is paid to a lender
because the student’s eligibility to borrow under the FFEL Program was falsely certified by an
eligible institution of higher education.
If the borrower files a closed school and/or a false certification claim, after a default claim was
paid to the lender, and the reinsurance claim was paid at less than 100 percent of principal and
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interest, the complement of the reinsurance may be requested using line MR-3, Status Change.
If the borrower files a closed school or false certification claim after a default or lender-of-lastresort loan (default) claim was paid to the lender and the reinsurance claim was paid at 100
percent, even though no further reinsurance is due the agency, this change in status to closed
school or false certification must be reported in the Non-Payment Activity section, MR-21,
Default/Lender of Last Resort to Closed School/False Certification.
MR-1-E Bankruptcy - Principal Amount
Enter amounts for Chapter 7, 11, 12 and 13 claims (original and additional requests) for this
reporting period.
Chapter 7, and 11 bankruptcy claims are paid to a lender if:
the borrower has been in repayment status over 7 years from the date on which the
bankruptcy petition is filed for cases commencing before October 8, 1998 or
the borrower begins an action to receive a discharge on the grounds of undue
hardship.
Chapter 12 and 13 bankruptcy claims are claims paid to a lender when a borrower files for relief
under those chapters of the U.S. Bankruptcy Code.
If the borrower files for bankruptcy after a default claim was paid to the lender, and the
reinsurance claim was paid for less than 100 percent of principal and interest, then the
complement of the reinsurance may be requested using line MR-3, Status Change. If the
borrower files for bankruptcy after a default or lender-of-last-resort loan (default) claim was paid
to the lender and the reinsurance claim was paid at 100 percent, even though no further
reinsurance is due the agency, this change in status to bankruptcy must be reported in the NonPayment Activity section, MR-22, Default/Lender of Last Resort to Bankruptcy.
During the course of the bankruptcy proceedings, the agency must report and return to ED, any
amounts received at the direction of the Bankruptcy Court in MR-14, Bankruptcy Collections.
Once bankruptcy proceedings are concluded and the loan is discharged, the agency must report
and return to ED any amounts received at the direction of the Bankruptcy Court in MR-14,
Bankruptcy Collections.
If the loan is not discharged, it must either be repurchased by a lender or collected on by the
guaranty agency in accordance with program regulations. The loan reverts to an “in repayment”
status at the lender. If the borrower does not repay the loan after the repurchase, then the loan
could go into default. The guaranty agency could pay a default claim on it and file a default
reinsurance claim using MR-1. This assumes all applicable lender and guaranty agency policies
concerning defaulted loans were followed.
In addition to arranging the lender’s repurchase of the loan, the agency must refund to ED any
bankruptcy reinsurance payment it received and report it on MR-5, Repurchases - CFY (current
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Guaranty Agency Financial Report (GAFR) Guide
fiscal year) or MR-6, Repurchases - PFY (prior fiscal year). Also, report the account balance at
conversion (from bankruptcy to default) in MR-23, Bankruptcy to Default/Lender-of-last-resort,
if the loan was originally purchased as a default and collections resume due to dismissal of the
bankruptcy proceedings.
MR-1-F Unpaid Refunds - Principal Amount
Enter amounts for unpaid (school) refunds (original and additional requests) for this reporting
period. An unpaid refund, in the case of an open or closed school, is a discharge of a former or
current borrower’s (and any endorser’s) obligation to repay that portion of a FFEL loan
(disbursed on or after January 1, 1986) equal to the refund that should have been made by the
school. Include in this amount any accrued interest and other charges associated with the unpaid
refund, which are also discharged.
In accordance with the unpaid refund provisions, calculate the amount paid to lenders for these
refunds. Add to this figure the amount of the reinsurance complement requested by the agency
on loans it holds for which the borrower qualifies for an unpaid refund.
Also, see MR-31, Other Transactions Affecting Federal Receivable, to report the federal receivable portion
of unpaid refund discharges on guaranty agency held loans.
MR-1-G Discharges
This line item will be used to request reimbursement due to teacher loan forgiveness discharges
and partial discharges of consolidation loans.
Teacher loan forgiveness is a discharge of a borrower’s obligation to repay up to $5,000 or up to
$17,500 of their outstanding student loan balances. Forgiveness is available to a borrower who
has no outstanding loan balance under the FFEL Program or the Direct Loan Program on
October 1, 1998 or has no outstanding loan balance on the date he or she obtains a loan after
October 1, 1998. The Secretary pays the guaranty agency a percentage of the discharge that is
equal to the complement of the reinsurance percentage paid on the loan. The payment may also
include interest that accrues on the discharged amount during the period from the date the
guaranty agency received payment from the Secretary to the date on which the guaranty agency
determines that the borrower is eligible for the teacher loan forgiveness.
A partial discharge of a Consolidation loan occurs when a loan was obtained jointly by a married
couple if one of the borrowers dies or becomes totally and permanently disabled. The amount
of the Consolidation loan that is discharged is equal to the portion of the outstanding balance of
the Consolidation loan, as of the date the borrower died or became totally and permanently
disabled, attributable to any of that borrower's loans that would have been eligible for discharge.
In accordance with the teacher loan forgiveness provisions and the partial discharge of
Consolidation loans provisions, calculate the amount paid to lenders for discharges. Add to this
figure the amount of the reinsurance complement requested by the agency on loans it holds for
which the borrower qualifies for teacher loan forgiveness discharge or partial discharge of a
Consolidation loan.
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Enter amounts for teacher loan forgiveness discharges and partial discharges of Consolidation
loans, (original and additional requests) for this reporting period.
Example: A guaranty agency pays lenders for three teacher loan forgiveness discharges:
Borrower
Amount
#1
#2
#3
$ 5,000,00
3,000.00
5,000.00
Subtotal
13,000.00
In addition, the guaranty agency has two requests for teacher loan forgiveness discharges on
loans they hold:
Borrower
#4
#5
Subtotal
Amount
$ 1,000,00
$ 500.00
Reinsurance
Reimbursement
1000 - (1000*98%)
500 - (500*95%)
GA
Complement
$20.00
$25.00
$45.00
The amount entered in MR-1-G, Discharges, Principal Amount is $13,045.00.
CATEGORY
ITEM
NO.
MR-1
Claims Paid
MR-1-A
Defaults – Net
MR-1-B
AMOUNT DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
INTEREST
AMOUNT
OTHER
AMOUNTS
$30, 525.00
$9,500.00
Exempt/Lender-of-last-resort
$10,000.00
$5,980.00
MR-1-C
Death/Disability
$2,000.00
MR-1-D
Closed School/False Certification
$ 0.00
MR-1-E
Bankruptcy
$ 0.00
MR-1-F
Unpaid Refunds
$ 0.00
MR-1-G
Discharges
$13,045.00
Also, see MR-31, Other Transactions Affecting Federal Receivable, to report the federal receivable portion of
teacher loan forgiveness discharges and partial discharges of Consolidation loans, on guaranty agency held loans.
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MR-2 Borrower Payment Return (Closed School/False Certification)
This category is used to refund collections, including wage garnishment collections, to a guaranty
agency, which were received on a closed school or false certification claim and returned to the
borrower after reinsurance was paid. These collections must be returned by the guaranty agency
to the borrower. Also, include amounts for collections received by the lender, and returned to
the borrower by the guaranty agency after claim payment. This policy applies only to a loan,
disbursed in whole or in part, on or after January 1, 1986. This is a supplemental request for
reinsurance, directly related to borrower payments and not a line item for initial reporting of
closed school/false certification reinsurance requests.
This situation is most likely to occur on accounts that were originally paid as defaults where the
borrower made payments to the guaranty agency, and subsequently there was a change in status
to closed school or false certification. Under this situation, if the original default claim was
reported in MR-1, Claims Paid, and was paid at less than 100 percent and the agency reported it
in MR-3, Status Change, for supplemental insurance, the reporting in this Section would be at
the 100 percent reimbursement rate.
On closed school or false certification claims, all collections received by the lender and returned
to the borrower by the agency before reinsurance was paid are reported in MR-1, Claims Paid.
The borrower is entitled to a full refund of these collections and ED must refund the entire
collection amount to the guaranty agency. Collections refer to collection of: principal, purchased
interest (lender interest, guaranty agency claim interest and non-reinsured GA interest), accrued
interest, and any collection charges permitted by law, regulation, or the borrower’s promissory
note.
MR-2 Borrower Payment Return – Amount Due To/ (FROM) Guarantor
MR-2, Borrower Payment Return - Amount Due To/ (From) Guarantor is the sum of amounts
reported in MR-2, Principal Amount, Interest Amount, and Other Amounts. This is a systemcalculated field that does not allow guaranty agency input.
MR-2 Borrower Payment Return - Principal Amount
Enter amount of collections that were applied to the portion of each borrower’s account that
represents principal and purchased interest. Do not include amounts paid for other charges such
as collection costs, late charges and attorney’s fees.
MR-2 Borrower Payment Return - Accrued Interest
Enter amount of collections that were applied to the portion of each borrower’s account that
represents accrued interest.
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MR-2 Borrower Payment Return - Other Charges
Enter amount of collections that were applied to the portion of the borrower’s account that
represents other charges. Include collection costs, late charges and attorney’s fees.
MR-3 Status Changes
This category is used for reporting on default claims originally paid at a reduced reinsurance rate
but which are now eligible for full reimbursement because the borrowers’ claim status has
changed. Though a guaranty agency may be paid at a reduced reinsurance rate on a default
claim, the agency is entitled to receive reimbursement for 100 percent of principal, lender
interest, and guaranty agency claim interest on the following types of claims:
Death or disability;
Closed school, and false certification, and
Bankruptcy
If a guaranty agency pays a default claim for which it receives less than 100 percent reinsurance,
and the status of the borrower claim changes to one of those listed above, the guaranty agency
can recoup the rest of its losses from ED by requesting supplemental reinsurance on the line
items below.
Reinsurance default claims paid at 100 percent, and lender-of-last-resort loan (default) claims are
not eligible for supplemental reinsurance if the borrower’s claim status changes because there is
no loss for the agency to recoup. To request additional reinsurance on a default claim when the
status changes to exempt (for loans disbursed on or after July 1, 2006), report the additional
amount in MR-1-B, Exempt/Lender of Last Resort.
Although this category is used to request the additional portion due the guaranty agency, the
account balance at conversion must also be reported in MR-20 through MR-23. ED uses this
information for accounting and other reporting purposes.
MR-3 Status Changes - Amount Due To/ (From) Guarantor
MR-3, Status Changes, Amount Due To/(From) Guarantor, is the total amount of the unpaid
principal and interest portion of the default claim that the guaranty agency paid to the lender that
was not reimbursed by ED and is still outstanding at the time this supplemental request is
submitted to ED. This total amount is the sum of amounts reported in MR-3-A, Unpaid
Principal and Unpaid Interest through MR-3-C. This is a system-calculated field that does not
allow guaranty agency input.
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Example:
Borrower Status Original Claims
Changes
Paid to Lender
Default To
Principal Amount
Original Claims
Paid to Lender
Interest Amount
ED Payment
ED Payment to Additional
Additional
to GA
GA Interest
Amount due Amount due
Principal
Amt.
GA - Principal GA - Interest
Amt.
Borrower #1
D/D
$4,000 @ 95%
$1,000 @ 95%
$3,800.00
$950.00
$200.00
$50.00
Borrower #2
CS/FS
$900 @ 98%
$100 @ 98%
$882.00
$98.00
$18.00
$2.00
Borrower #3
Bankruptcy
$1,000 @ 95%
$500 @ 95%
$950.00
$475.00
$50.00
$25.00
5,900.00
1,600.00
$5,632.00
$1,523.00
$268.00
$77.00
Reporting on GAFR:
CATEGORY
AMOUNT DUE
TO/(FROM)
GUARANTOR
$345.00
ITEM
NO.
MR-3
PRINCIPAL
AMOUNT
INTEREST
AMOUNT
Status Changes
MR-3-A
Death/Disability
$200.00
$50.00
MR-3-B
Closed School/False Certification
$18.00
$2.00
MR-3-C
Bankruptcy
$50.00
$25.00
OTHER
AMOUNTS
MR-3-A Death/Disability - Principal and Interest
In the appropriate column (principal amount or interest amount) enter the amount for default
claims for which supplemental reinsurance is being requested due to a change in status of the
default claim to a death or disability claim. Enter the unpaid principal and interest portions of
death and disability claims that the guaranty agency paid to the lender that were not reimbursed
by ED and are still outstanding at the time this supplemental reinsurance request is submitted.
Example: The guaranty agency files a default reinsurance claim for $1000 for a loan first
disbursed on or after October 1, 1993 but before October 1, 1998. The reinsurance request
is for the amount of the claim paid to the lender that is the “loss” the agency incurred. The
guaranty agency is paid 98 percent of this request or $980. The agency has not reached the
trigger for default reinsurance payments for the current fiscal year and is eligible for 98
percent reinsurance on its losses, for a total of $980. The borrower becomes totally and
permanently disabled the following year. The guaranty agency may now use this Category to
request payment of the $20 (2 percent not paid in reinsurance).
Also, report the account balance at conversion (from default to death and disability) in MR-20, Default/Lender of
Last Resort to Death and Disability.
MR-3-B Closed School/False Certification - Principal and Interest
In the appropriate column (principal amount or interest amount) enter the amount of default
claims for which supplemental reinsurance is being requested due to a change in status of the
default claim to a closed school or false certification claim (include supplemental requests for
claims where the borrower is a victim of identity theft). Enter the unpaid principal and interest
portions of closed school or false certification claims that the guaranty agency paid to the lender
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that were not reimbursed by ED and are still outstanding at the time this supplemental
reinsurance request is submitted.
Also, report the account balance at conversion (from default to closed school/false certification)
in MR-21, Default/Lender of Last Resort to Closed School/False Certification.
MR-3-C Bankruptcy - Principal and Interest
In the appropriate column (principal amount or interest amount) enter the amount for default
claims for which supplemental reinsurance is being requested due to change in status of the
default claim to a bankruptcy claim. Enter the unpaid principal and interest portions of
bankruptcy claims that the guaranty agency paid to the lender that were not reimbursed by ED
and are still outstanding at the time this supplemental reinsurance request is submitted.
If a borrower files for bankruptcy after a default claim was paid to the lender, and the reinsurance
claim was paid at less than 100 percent of principal and interest, the guaranty agency may claim
reimbursement for the complement of the reinsurance in this category.
Also, report the account balance at conversion (from default to bankruptcy) in MR-22,
Default/Lender of Last Resort to Bankruptcy.
During the course of the bankruptcy proceedings, the agency must return and report to ED any
amounts received at the direction of the Bankruptcy Court on line MR-14, Bankruptcy
Collections. Do not net them from the amount reported here. Once bankruptcy proceedings are
concluded and:
a repayment plan is established the agency must report and return to ED any amounts
received at the direction of the Bankruptcy Court on line MR-14, Bankruptcy Collections
the loan is not discharged, it must either be repurchased by a lender or collected on by the
guaranty agency in accordance with program regulations, and the agency must refund to
ED any additional bankruptcy reinsurance payment it received and report it on either
MR-7, Partial Refund – CFY or MR-8, Partial Refund – PFY, as appropriate.
Also, report the account balance at conversion (from bankruptcy to default) in MR-23 Bankruptcy to
Default/Lender of Last Resort.
MR-4 TOP Overpayments
The Treasury Offset Program (TOP) category reports activity on accounts after offsets have
occurred. Overpayment refunds are made to borrowers by the guaranty agency when the offset
amount exceeds the balance (principal and interest) due on the borrower’s account.
MR-4 TOP Overpayments - Amount Due To/ (From) Guarantor
MR-4, TOP Overpayments - Amount Due To/ (From) Guarantor is that portion of the offset
that is in excess of the balance due on the defaulted borrower’s account that was refunded to the
borrower. This amount is the sum of amounts reported in MR-4, Principal Amount, Interest
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Amount and fees (reported in the Other Amounts column) and will be automatically
calculated. This is a system-calculated field that does not allow guaranty agency input.
MR-4 TOP Overpayments – Principal
Enter amount refunded for this TOP offset activity that was applied to the portion of each
borrower’s account that represents principal and purchased interest. If the amount of the TOP
offset results in the borrower overpaying the amount due on the borrower’s account, and then
report that portion of the overpayment, which cannot be correctly charged to any category in
this item.
Do not include amounts for other costs such as collection costs, late charges and attorney’s fees
because they cannot be collected through the TOP offset process.
MR-4 TOP Overpayments – Interest Amount
Enter amount refunded for this TOP offset activity that is applied to the portion of each
borrower’s account that represents accrued interest.
MR-4 TOP Overpayments – Other Amounts
Enter amount refunded for this TOP offset activity that is applied to the portion of each
borrower’s account that represents the TOP processing fee.
MR-5 Repurchases - Current Fiscal Year (CFY)
This category is used to refund to ED (“repurchases”) the amount paid a guaranty agency on a
reinsurance claim because the reinsurance claim was not valid. In conjunction with this, the
insurance claim the guaranty agency paid the lender may not be valid, and the lender may be
required to refund the amount of the insurance claim to the guaranty agency.
Examples: A borrower moves to study in a foreign country, but the borrower’s
request for an in-school deferment is misplaced. The lender cannot contact the
borrower and believes the loan should be in repayment. The lender files a default claim.
The guaranty agency pays the claim and receives reinsurance from ED. The agency
finally locates the borrower and determines the borrower should not have been placed
in default. The guaranty agency arranges for the lender to repurchase the loan. The
agency then provides a full refund of the default reinsurance claim to ED.
The guaranty agency files a reinsurance claim for bankruptcy with ED and is paid. The
guaranty agency then receives a notice from the Bankruptcy Court informing the agency that
bankruptcy proceedings have been concluded and that the loan was not discharged. The
guaranty agency must arrange for the lender to repurchase the loan and provide a full refund
of the bankruptcy reinsurance claim to ED. The lender must place the borrower back in
repayment although the borrower could subsequently default on the loan.
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A guaranty agency must file a refund if it determines that it made an invalid reinsurance
claim. An agency must also file a refund on any bankruptcy claim where the bankruptcy
proceedings were concluded and the Bankruptcy Court does not discharge the loan. For
example a refund would be required if the borrower does not comply with the requirements
of the Wage Earner Plan and the Bankruptcy Court dismisses the case.
A guaranty agency must file a full refund of reinsurance to ED within 45 days of:
receiving a notice from the Bankruptcy Court informing the agency that bankruptcy
proceedings have been concluded and that a loan on which ED paid a bankruptcy
reinsurance claim was not discharged or
In all other cases, unless otherwise directed, the date that the agency discovers that a
full refund of reinsurance is due to ED.
Full refunds of default claims are refunds to ED for the full amount of the default reinsurance.
Refunds are reduced by borrower payments forwarded to ED. If a default reinsurance claim was
paid to the guaranty agency at a reduced reinsurance rate, the refund to ED must be made at that
rate. Amount remitted = (outstanding principal * reinsurance reimbursement rate). The effect of
a full refund of a default claim on a guaranty agency’s “trigger figure” depends upon whether the
agency has a repurchase agreement with ED:
If a guaranty agency has a repurchase agreement:
ED reduces the total of default claims paid which are subject to the reinsurance
trigger by the amount of the refund. This rule applies if the refund is for a reinsurance
default claim paid during the current federal fiscal year. Once the guaranty agency has
exceeded its trigger for the current federal fiscal year, subsequent full refunds do not
affect the trigger calculation. Instead, the refund amount is credited against default
claims paid to the guaranty agency in the following federal fiscal year.
Full refunds of a reinsurance default claim paid during a previous federal fiscal year
do not affect any trigger calculations.
If a full refund of a default claim is made more than 30 days after the guaranty agency
received the reinsurance payment, the agency must pay ED interest on the
repurchased loan. The interest rate is the rate specified on the borrower’s promissory
note. Report the unpaid interest from the date of the reinsurance payment until the
date the refund is reported to ED.
A repurchase agreement covers default claims. It does not apply to exempted,
bankruptcy, death and disability, closed school, false certification, or lender-of-lastresort loan claims because these claims do not affect a guaranty agency’s trigger
figure.
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If a guaranty agency does not have a repurchase agreement:
A full refund has no effect on the agency’s reinsurance trigger calculation and.
A guaranty agency is not required to pay interest on full refunds.
Repurchases have two sections. The columns are the same for each section. Each section has
five line items and the items are the same for each section. The purpose of the two sections is to
enable ED to properly process current and prior fiscal year refunds of guaranty agencies, which
have repurchase agreements with ED, and for ED’s accounting procedures. Repurchase
agreements provide for different treatment of reinsurance claims paid in a current fiscal year and
in prior fiscal years.
For the items in this section enter the information requested in each column, for the claims
included in the reporting period, using the following definitions.
MR-5 Repurchases - CFY - Amount Due To/ (From) Guarantor
MR-5, Repurchases - CFY - Amount Due To/ (From) Guarantor, is the total dollar amount of
current fiscal year repurchased claims for the reporting period for which the guaranty agency is
making a full refund of reinsurance. This amount is the sum of MR-5-A through MR-5-E,
Principal Amount, Interest Amount, and Other Amounts, as applicable. This is a systemcalculated field that does not allow guaranty agency input.
MR-5 Repurchases - CFY - Principal Amount
Enter the outstanding principal amount net of any complement for each type of claim for:
principal,
lender interest,
guaranty agency claim interest,
collection cost for closed school or false certification claims,
allowable outstanding collection costs on rehabilitated loans that subsequently default,
for closed school or false certification claims the amount of collections the agency
returned to the borrower at the time the claim was paid to the lender, and
accrued interest on a bankruptcy claim if the guaranty agency was required to hold the
loan until it was discharged in bankruptcy.
The Secretary pays accrued interest on a bankruptcy claim if the guaranty agency was required to
hold the loan until it was discharged in bankruptcy. A bankruptcy claim paid to a lender prior to
July 23, 1992 may meet this condition. A Chapter 7 or 11 bankruptcy claim paid to the lender
when the borrower filed for discharge on the grounds of undue hardship, and the loan is
subsequently discharged, also meets this condition. For such a bankruptcy claim, the guaranty
agency is entitled to receive interest that accrued (but was held in forbearance) on the discharged
loan from the date the guaranty agency paid the lender through the earlier of:
60 days after the date the loan was discharged or
the date the agency’s reinsurance claim is authorized to be paid by ED
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The lender must repurchase claims paid to lenders prior to July 23, 1992, on which the borrower
has not filed for a hardship discharge, and reinsurance must be returned to ED. In the case
where the agency submits its claim less than 60 days after the loan was discharged, the agency
will be unable to calculate the total amount of accrued interest due because it does not know the
date that ED will authorize the reinsurance claim to be paid. Therefore, the agency may calculate
the amount of interest that accrued through the date the agency files the reinsurance claim and
report it in this column. After the agency receives payment from ED for the claim, the agency
may calculate the additional interest that has accrued from the date the agency submitted the
claim through the earlier of the date that ED authorized payment of the claim or the 60th day
after the loan was discharged. Unless ED notifies the agency, the date ED authorizes payment of
a claim is the date the agency receives the payment.
If the guaranty agency is holding a bankruptcy claim paid to a lender and the Bankruptcy Court
proceedings have been concluded without the loan being discharged, then the guaranty agency
may not file a claim on the loan as a bankruptcy. Instead, the loan goes back into repayment,
with any interest that accrued during the bankruptcy proceedings being capitalized. The loan
must either be repurchased by a lender or collected by the guaranty agency in accordance with
program regulations.
If the loan later goes into default, the guaranty agency may file a default reinsurance claim with
ED at that time.
For a loan on which a bankruptcy claim is paid to a lender on or after July 23, 1992, and the
guaranty agency was not required to hold the claim, the guaranty agency can file for
reimbursement at once. As with a reimbursement of a death or disability claim, the guaranty
agency is not entitled to any interest, which accrues on such a bankruptcy claim between the time
the guaranty agency paid the lender and the time ED pays the agency.
This amount does not include amounts paid to lenders for other items such as late charges,
collection cost, and attorney’s fees. It also excludes non-reinsurance GA interest. If the nonreinsured GA Interest amount has been capitalized the agency must reduce this amount and
report it in the Other Amounts column. For closed school or false certification claims,
outstanding principal includes any collection costs paid by ED.
MR-5 Repurchases - CFY - Accrued Interest Due ED
Enter the amount of outstanding accrued interest due ED on default claims calculated at the rate
specified on each defaulted borrower’s promissory note. This applies only if:
it is a default claim;
the guaranty agency has a repurchase agreement with ED; and
the refund is made over 30 days after the reinsurance payment.
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The unpaid interest due ED is calculated from the date the original reinsurance reimbursement
payment was received until the date the refund is reported to ED. Interest need not be paid on a
default claim which is refunded within 30 days of the date reinsurance was paid. If no interest is
due on any of the default claims being refunded, enter a zero. If the agency does not have a
repurchase agreement with ED enter zero.
The total refund due ED for this line item is theoutstanding principal (net of any complement) plus
outstanding accrued interest due ED
MR-5 Repurchases - CFY – Other Amounts
Enter the amount of outstanding non-reinsured GA interest which is the outstanding amount as
calculated by the guaranty agency on the loan principal while a lender’s insurance claim is being
processed by the guaranty agency, but which was not eligible for reinsurance from ED.
Though this interest must be paid to the lender by the guaranty agency as part of an insurance
claim, it is not subject to reinsurance by ED. However, the Secretary of Education is entitled to
an equitable share of any of this interest collected from a borrower.
If non-reinsured GA interest is capitalized in the outstanding principal net of any complement,
the agency must reduce the outstanding principal by the original amount of non-reinsured GA
interest. Reduce the amount reported in the Principal Amount and report the original amount of
non-reinsured GA interest in the Other Amounts column.
MR-5-A Repurchases - CFY - Defaults
Enter the amount related to default claims being refunded in full for which reinsurance was paid
during the current fiscal year for this reporting period. A default claim is one on which the
borrower and endorser, if any, or joint borrowers on a PLUS or Consolidation loan, failed to
make an installment payment when due, or failed to meet other terms of the promissory note, if
the Secretary or guaranty agency finds it reasonable to conclude that the borrower or endorser, if
any, no longer intends to honor the obligation to repay, provided that failure persists:
For loans delinquent before 10/7/98:
--180 days for a loan payable in monthly installments and
--240 days for a loan payable in less frequent installments;
For loans delinquent on/after 10/7/98:
--270 days for a loan payable in monthly installments or
--330 days for a loan payable in less frequent installments.
MR-5-B Repurchases - CFY - Exempt /Lender-Of-Last-Resort
Enter the amount related to exempt and lender-of-last-resort claims being refunded for which
reinsurance was paid during the current fiscal year for this reporting period. An exempt claim is
one on which the borrower defaulted after the lender determined that the borrower or student
failed to establish eligibility for the loan. Also include claims where the student has been
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convicted of, or plead nolo contendere to, a crime involving fraud in obtaining title IV student
aid or in cases where the borrower is a victim of identity theft. Exempt claims on loans first
disbursed before July 1, 2006 were subject to reduced reimbursement and the reinsurance
complement should be reduced from amounts reported here. Lender-of-last-resort loans are
loans made only to students who are otherwise unable to obtain loans. A lender-of-last-resort
loan (default) claim is one on which the borrower and endorser, if any, failed to make an
installment payment when due, or to meet other terms of the promissory note.
This is only a general description of exempted and lender-of-last-resort claims. Refer to
appropriate regulations and policy bulletins for specifics.
MR-5-C Repurchases - CFY – Death/Disability
Enter the amount related to death and total disability claims being refunded in full for which a
claim was paid during the current fiscal year for this reporting period. A death claim is one on
which the balance of the loan is canceled due to the borrower’s death. This includes a Federal
PLUS loan death claim paid to a lender when a student, on whose behalf a parent received the
Federal PLUS loan, dies. A disability claim is one on which the balance of the loan is
conditionally discharged due to the total and permanent disability of the borrower.
MR-5-D Repurchases - CFY - Closed School/False Certification
Enter the amount related to closed school or false certification claims being refunded in full for
which reinsurance was paid during the current fiscal year for this reporting period. A closed
school claim is one on which a claim is paid to a lender because the student was unable to
complete the program in which the student was enrolled due to the closure of the institution. A
false certification claim is one on which a claim is paid to a lender because the student’s eligibility
to borrow under the FFEL Program was falsely certified by an eligible institution of higher
education.
MR-5-E Repurchases - CFY - Bankruptcy (Chapter 7, 11, 12 and 13)
Enter the amount related to Chapter 7, 11, 12 and 13 bankruptcy claims being refunded in full
for which reinsurance was paid during the current fiscal year for this reporting period.
Chapter 7 and 11 bankruptcy claims are paid to a lender if:
The borrower has been in repayment status for over 7 years from the date on which
the bankruptcy petition is filed for cases commencing before October 8, 1998, or
The borrower begins an action to receive a discharge on the grounds of undue
hardship.
Chapter 12 or 13 bankruptcy claims are claims paid to lender when a borrower files for relief
under those chapters of the U.S. Bankruptcy Code. During the course of the bankruptcy
proceedings, the agency must report and return to ED, any amounts paid at the direction of the
Bankruptcy Court. These amounts are not refunds.
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If the bankruptcy proceedings are concluded and the loan is discharged, then the agency must
report and return to ED, any amounts paid at the direction of the Bankruptcy Court. These
amounts are not refunds.
If the bankruptcy proceedings are concluded and the loan is not discharged, then the agency
must refund in full the outstanding amount of the reinsurance bankruptcy payment it received
from ED. The guaranty agency also must arrange for a lender to repurchase the loan. The loan
reverts to an “in repayment” status at the lender. If the borrower does not repay the loan after
repurchase, then the loan could go into default. The guaranty agency could pay a default claim
on it and file a default reinsurance claim. This assumes all applicable lender and agency policies
concerning defaulted loans were followed.
If the borrower defaulted prior to filing bankruptcy and:
the reinsurance claim was paid at only 98, 95, 90, 88, 85, 80, 78 or 75 percent of
principal and interest and the complement of the reinsurance was paid under MR-3
C, Status Changes, when the borrower filed bankruptcy, and
the bankruptcy proceedings are concluded and the loan is not discharged, or
the borrower filed for bankruptcy after a default or lender-of-last-resort loan (default)
claim was paid to the lender,
Then the agency must refund to ED any additional bankruptcy reinsurance payment it received
in MR-5 and MR-6. The guaranty agency would continue to hold the loan and attempt to collect
on it like any other default claim.
The agency must report and return to ED any amounts paid at the direction of Bankruptcy
Court. These amounts should be reported in MR-14, Bankruptcy Collections because they are
not refunds.
MR-6 Repurchases for Reinsurance Claims Paid in Prior Fiscal Year
In MR-6-A through MR-6-E enter the information for repurchases of reinsurance claims paid in
all previous fiscal years in this section. This includes any refund of reinsurance where the claim
was not paid in the current fiscal year. Use the instructions for the line items with this same title
from the Repurchases - Current Fiscal Year category, taking into account that this category
covers only reinsurance paid in previous fiscal years.
MR-6 Repurchases - PFY - Amount Due To/ (From) Guarantor
MR-6, Repurchases - PFY - Amount Due To/(From) Guarantor is the total dollar amount of
prior fiscal year repurchased claims for the reporting period for which the guaranty agency is
making a full refund of reinsurance. This amount is the sum of MR-6-A through MR-6-E,
Principal Amount, Interest Amount and Other Amounts, as applicable. This is a systemcalculated field that does not allow guaranty agency input.
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MR-7 Partial Refunds - Current Fiscal Year (CFY)
This category is used to refund part of a reinsurance claim paid by ED when a lender refunded
part of the insurance claim paid by the guaranty agency. Borrower payments received by the
lender and forwarded to the guaranty agency are not subject to collection retention and should
be reported here. Borrower payments received by the guaranty agency after the default claim has
been paid to the holder are treated as a collection and should not be reported in this line item.
If the agency receives a claim overpayment from a lender after an insurance claim was paid, but
prior to reinsurance being requested, treat the payment as a refund and reduce the reinsurance
claim amount (MR-1) by the amount refunded.
The guaranty agency must reimburse ED for the entire amount of lenders partial refund and
report this payment as an overpayment refund on all except a default claim. On a default claim,
the guaranty agency can reduce the refund by any complement if reinsurance was originally paid
at a reduced rate.
The effect of a partial refund of a default claim on a guaranty agency’s “trigger figure” depends
upon whether the agency has a repurchase agreement with ED:
If a guaranty agency has a repurchase agreement ED will reduce the total of default
claims paid which are subject to the reinsurance trigger by the amount of the partial
refund. This rule applies if the refund is for a reinsurance default claim paid during
the current fiscal year. Once the guaranty agency has exceeded its trigger for the
current fiscal year, subsequent partial refunds do not affect the trigger calculation.
Instead, the partial refund amount is credited against default claims paid to the
guaranty agency in the following federal fiscal year. A partial refund of a reinsurance
default claim paid during a previous Federal fiscal year does not affect any trigger
calculations. A repurchase agreement only covers default claims.
If a guaranty agency does not have a repurchase agreement, a partial refund affects
the agency’s reinsurance trigger calculation up to the time the agency exceeds the
trigger. The trigger is affected only for partial refunds when the reinsurance claim
was paid during the current fiscal year.
Example:
Amount of Default Claim Paid to
Lender
GA Reimbursement Rate
Borrower Payment Received
Revised: September 2015
Principal
Interest
Other
$50.00
$25.00
$25.00
$1,000.00
95%
$100.00
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GAFR Reporting:
______________________________ _________ ______________ ___________ ___________
If borrower payment is received by the
($1,000 – 100) *
lender and forwarded to the guaranty
MR-1
95%
agency before the guaranty agency files
=$855.00
for reinsurance.
If borrower payment is received by the
($100 * 95%) =
MR-7 or
lender and forwarded to the guaranty
MR-8
$95.00
after lender claim payment.
If borrower payment is received
($25 * 95%) ($25 * 95%)
($50 *95%) less
directly by the guaranty agency after
MR-12 or
less
less
($50*23%)
the default insurance claim has been
MR-13
($25 * 23%) ($25 * 23%)
=$36.00
paid to the lender.
= $18.00
= $18.00
MR-7 Partial Refunds - CFY - Amount Due To/ (From) Guarantor
This amount is the total for partial refund amounts that the guaranty agency is refunding for
all claim types, less any complement, if the reinsurance was originally paid at a reduced
reimbursement rate.
It does not include amounts paid to lenders or the guaranty agency for other items such as late
charges, collection costs, and attorney’s fees. It also excludes non-reinsured GA interest. MR-7,
Partial Refunds - CFY, Amount Due To/ (From) Guarantor, is the sum of amounts reported in
MR-7-A through MR-7-E, Principal Amount. This is a system-calculated field that does not
allow guaranty agency input.
MR-7-A Partial Refunds - CFY - Defaults
Enter the amount of partial refunds of reinsurance related to default claims for this reporting
period, as defined above.
Example: The guaranty agency receives a refund from a lender of $100 for a default claim.
Reinsurance was paid at 95 percent. The guaranty agency would refund only $95, that is,
95% of $100, to ED.
MR-7-B Partial Refunds - CFY – Exempt/Lender-of-Last-Resort
Enter the amount of partial refunds of reinsurance for exempt and lender-of-last-resort claims
for this reporting period, as defined above.
Reinsurance paid on exempt claims for loans first disbursed on or after July 1, 2006, and lenderof-last-resort claims are not subject to a reduced reinsurance rate. Therefore, the guaranty agency
must return to ED the entire amount of any partial refund from a lender for such a claim.
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Guaranty Agency Financial Report (GAFR) Guide
MR-7-C Partial Refunds – CFY – Death and Disability
Enter the amount of partial refunds for death and disability claims for this reporting period, as
defined above. Payments on death or disability claims are not subject to a reduced reinsurance
rate. Therefore, the guaranty agency must return to ED the entire amount of any partial refund
from a lender or the guaranty agency for such a claim.
MR-7-D Partial Refunds - CFY - Closed School or False Certification
Enter the amount of partial refunds for closed school or false certification claims for this
reporting period, as defined above.
Payments on closed school or false certification claims are not subject to a reduced reinsurance
reimbursement rate. Therefore, the guaranty agency must return to ED the entire amount of any
partial refund from a lender or the guaranty agency for such a claim.
MR-7-E Partial Refunds - CFY - Bankruptcy
Enter the amount of partial refunds for Chapter 7, 11, 12 and 13 bankruptcy claims for this
reporting period, as defined above.
Payments on a Chapter 7, 11, 12 and 13 bankruptcy claims are not subject to a reduced
reinsurance rate. Therefore, the guaranty agency must return to ED the entire amount of any
partial refund from a lender or the guaranty agency for such a claim.
MR-8 Partial Refund - Previous Fiscal Year (PFY)
In MR-8-A through MR-8-E enter the information for partial refunds paid in all previous fiscal
years in this section. Use the instructions for the line items with this same title from the Partial
Refunds - CFY Section (MR-7-A through MR-7-E), taking into account that this Section covers
only partial refunds paid in previous fiscal years.
MR-8 Partial Refunds - PFY, Amount Due To/ (From) Guarantor
MR-8, Partial Refunds - PFY, Amount Due To/ (From) Guarantor, is the sum of amounts
reported in MR-8-A through MR-8-E, Principal Amount. This is a system-calculated field that
does not allow guaranty agency input.
MR- 9 Overstated Claims
This category is used to correct and refund reinsurance if the guaranty agency’s arithmetic or
typographical errors on previously submitted reinsurance requests and additional reinsurance
requests resulted in the agency, but not the lender, being overpaid. Also use this category to
refund to ED partial amounts paid the agency on supplemental reinsurance requests due to a
further change in claim status back to default if originally paid at less than 100%.
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Guaranty Agency Financial Report (GAFR) Guide
Further changes in status may also require reporting in the Non-Payment Activity Section, MR20 through MR-23, Status Changes - Account Balance at Conversion.
The guaranty agency must refund to ED the entire amount of the overstated reinsurance claim
on all except a default claim. On a default claim, the guaranty agency can reduce the refund by
any complement if reinsurance was originally paid at a reduced rate.
MR-9 Overstated Claims - Amount Due To/ (From) Guarantor
This amount is the total for overstated claims and refund of partial amounts paid to the guaranty
agency on supplemental reinsurance requests due to a further change in claim status.
MR-9, Overstated Claims - Amount Due To/ (From) Guarantor, is the sum of amounts
reported in MR-9-A through MR-9-E. This is a system-calculated field that does not allow
guaranty agency input.
MR-9-A Overstated Claims - Defaults
Enter the amount of refunds due to overpayment of reinsurance for default claims for this
reporting period. This amount is reduced by the complement of reinsurance if the guaranty
agency was originally paid at a reduced rate.
MR-9-B Overstated Claims - Exempt/Lender of Last Resort
Enter the amount of refunds due to overpayment of reinsurance for exempt and lender of last
resort (default) claims for this reporting period.
MR-9-C Overstated Claims - Death/Disability
Enter the amount of refunds due to overpayment of reinsurance for death and disability claims
for this reporting period.
MR-9-D Overstated Claims - Closed School/False Certification
Enter the amount of refunds due to overpayment of reinsurance for closed school and false
certification claims for this reporting period.
MR-9-E Overstated Claims - Bankruptcy
Enter the amount of refunds due to overpayment of reinsurance for bankruptcy claims for this
reporting period. Also, include amounts due ED as a result of filing a change in status
supplemental reinsurance request. The account balance at conversion of these status changes
should also be reported in the Non-Payment Activity section, Status Changes - Account Balance
at Conversion, MR-23, Bankruptcy to Default/Lender of Last Resort.
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Guaranty Agency Financial Report (GAFR) Guide
MR-10 Rehabilitated Loans
This category is used to report rehabilitated loan payments due to ED as the result of the sale of
certain defaulted loans to eligible lenders. Beginning July 1, 2014, a guaranty agency may assign
the loan to ED if the agency has been unable to sell the loan. A rehabilitated loan is one on
which a default, exempt or lender-of-last-resort loan reinsurance claim has been paid. If the
borrower then makes, 9 payments made within 20 days of the due date during 10 consecutive
months, the guaranty agency may sell the loan to an eligible lender. The agency then must repay
to ED a portion of the outstanding principal balance as explained below.
Once the loan is sold back to a lender, the lender is entitled to interest and special allowance
payments. If the loan defaults again, the lender can file a claim with the guaranty agency and the
agency can file a reinsurance claim with ED. The reasonable collection costs assessed the
borrower are capitalized at the time of the loan sale and will be reported as principal if the loan
defaults again. “Reasonable” collection costs, in connection with rehabilitation loans, is an
amount that does not exceed 18.5 percent of the outstanding amount of principal and accrued
interest on the loan at the time the agency arranges for the lender to purchase the loan or certifies
the payoff amount to the purchasing lender. In the case of a sale made on or after July 1, 2014,
the collection charge to the borrower may not exceed 16 percent of the outstanding principal
and interest at the time of the loan sale. Collection costs that accrue after rehabilitation cannot
be claimed on a subsequent default.
Rehabilitated loan sales to lenders must be reported to ED within 45 days of their occurrence.
The guaranty agency must pay ED an amount equal to 81.5 percent of the outstanding principal
balance on the loan at the time of the sale to the lender, multiplied by the reinsurance percentage
in effect for each portion of the reinsurance claim paid on the loan. Beginning July 1, 2014, the
guaranty agency must pay ED an amount equal to 100 percent of the outstanding
principal balance on the loan at the time of the sale to the lender, multiplied by the
reinsurance percentage in effect when payment under the guaranty agreement was
made with respect to the loan. For rehabilitated loan reporting, the outstanding principal
balance is defined as the principal amount of the loan, which includes purchased interest,
received by the lender from the guaranty agency for the default claim. Borrower payments
applied may reduce the outstanding principal balance. The outstanding principal balance does
not include any outstanding interest that accrued since the payment of the claim, or outstanding
other charges, such as collection costs, late charges, or attorney’s fees.
If reinsurance was paid on the loan by multiple reinsurance requests and reinsurance was paid at
different rates, the agency must prorate its rehabilitated loan payment or pay ED at the highest
reinsurance rate used.
The repayment to ED on the sale of a rehabilitated loan affects a guaranty agency’s “trigger
figure” in all cases except rehabilitated lender-of-last-resort loan (defaults). Lender-of-last-resort
loans (defaults) are exempt from the “trigger figure” calculation.
Rehabilitated loans reduce the total amount of default claims paid which are subject to the
reinsurance trigger by the amount of the repayment. Once the guaranty agency has exceeded its
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Guaranty Agency Financial Report (GAFR) Guide
trigger for the current federal fiscal year, subsequent repayments do not affect the trigger
calculation. Instead, the repayment amount is credited against default claims to the guaranty
agency in the following federal fiscal year. This rule applies whether or not the agency has a
repurchase agreement with ED.
Also, include in this item any rehabilitated loans for a loan guarantee transferred from an
insolvent agency under a plan approved by the Secretary.
MR-10 Rehabilitated Loan Refund - Amount Due To/ (From) Guarantor
This is the total amount due to ED for the sale of rehabilitated loans to lenders. This amount
should equal 81.5 percent of the outstanding principal balance on the loan at the time the agency
arranges with the lender to rehabilitate the loan or certifies the payoff amount to the purchasing
lender multiplied by the reinsurance percentage in effect for the reinsurance claims paid on the
loans. Beginning July 1, 2014, this amount should equal to 100 percent of the outstanding
principal balance on the loan at the time of the sale to the lender, multiplied by the reinsurance
percentage in effect when payment under the guaranty agreement was made with respect to the
loan. The complement should be transferred to the agency’s federal fund.
MR-10, Rehabilitated Loan Refund, Amount Due To/ (From) Guarantor, is the sum of the
amount reported in MR-10, Principal Amount. This is a system-calculated field that does not
allow guaranty agency input.
MR-10 Rehabilitated Loans - Principal Amount
Enter the federal share of outstanding principal balance. This amount is the outstanding
principal balance that is due to the agency at the time of rehabilitation multiplied by the
reimbursement rate multiplied by 81.5%. Effective July 1, 2014, multiply the outstanding
principal balance by the reimbursement rate.
MR-10-A Rehabilitated Loans- Principal Amount (GA Retention)
Even though this line item is entitled Principal Amount it should reflect the GA retention on the
rehabilitated loan at the time of the sale. Enter the amount retained by the guaranty agency for
the sale of rehabilitated loans to lenders. This amount should not exceed 18.5% percent of the
outstanding principal balance on the loan at the time the agency arranges with the lender to
rehabilitate the loan or certifies the payoff amount to the purchasing lender. Effective July 1,
2014, this amount will be 0%. Note: In the scenario where the GA is attempting to report
an adjustment that would result in a negative amount in 10AP, the amount should be
reported on MR 31. The GA should also notate the amount/reason in the comment
section.
The two examples that follow demonstrate GAFR reporting for rehabilitation loans sales.
Example 1 demonstrates loan sales prior to July 1, 2014. Example 2 demonstrates loan sales on
or after July 1, 2014.
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Guaranty Agency Financial Report (GAFR) Guide
Example # 1: Rehabilitation Loan Calculation (Single Loan) for a loan sold prior to
July 1, 2014.
Reinsurance Reimbursement Rate – 98%
Outstanding Principal and Interest Balance at Time of Rehabilitation – $1,000.00
(Outstanding Principal Balance – $993.27; Accrued Interest – $6.73)
Payoff Amount (for lender to purchase rehabilitated loan) – $1,185.00 [Outstanding
Principal and Interest Balance of $1,000.00 plus Collection Cost of $185.00 ($1,000.00 *
18.5%)]
Complement (formula provided for informational purposes only) – Total Payoff Amount
($1,185.00) less Secretary’s Share ($793.32), less GA Retention ($183.75), less Accrued
Interest ($6.73), less Other Charges ($185.00) equals $16.20.
Outstanding Principal Balance
Accrued
Interest
Other
Charges
Total
Payoff
Amount
Payoff Amount
$993.27
$6.73
$185.00
$1,185.00
Secretary’s Share
$993.27 * 98% * 81.5% = $793.32
GA Retention
Complement
(for informational purposes
only)
ITEM
NO.
MR-10
MR-10-A
Revised: September 2015
$993.27 * 18.5% = $183.75
$1,185.00 – $793.32 – $183.75 – $6.73 –
$185.00 = $16.20
CATEGORY
Rehabilitated Loan
Refund
Rehabilitated Loans
AMOUNT DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
$793.32
$793.32
$183.75
Page 44 of 93
INTEREST
AMOUNT
OTHER
AMOUNTS
$6.73
$185.00
Guaranty Agency Financial Report (GAFR) Guide
Example # 2: Rehabilitation Loan Calculation (Single Loan) for a loan sold to a
lender on or after July 1, 2014
Reinsurance Reimbursement Rate – 98%
Outstanding Principal and Interest Balance at Time of Rehabilitation – $1,000.00
(Outstanding Principal Balance – $993.27; Accrued Interest – $6.73)
Payoff Amount (for lender to purchase rehabilitated loan) – $1,160.00 [Outstanding
Principal and Interest Balance of $1,000.00 plus Collection Cost of $160.00 ($1,000.00
*16%)]
Complement (formula provided for informational purposes only) – Total Payoff Amount
($1,160.00) less Secretary’s Share ($973.40), less Accrued Interest, less GA Retention
($160.00), equals $19.87.
Outstanding Principal Balance
Accrued
Interest
Other
Charges
Total
Payoff
Amount
Payoff Amount
$993.27
$6.73
$160.00
$1,160.00
Secretary’s Share
$993.27 * 98% = $973.40
GA Retention
Complement
(for informational purposes
only)
ITEM
NO.
MR-10
MR-10-A
Revised: September 2015
1000*16%
= $160.00
$1,160.00 – $973.40 – $6.73 – $160.00 =
$19.87
CATEGORY
Rehabilitated Loan
Refund
Rehabilitated Loans
AMOUNT DUE
TO/(FROM)
GUARANTOR
PRINCIPAL
AMOUNT
$973.40
$973.40
Page 45 of 93
INTEREST
AMOUNT
OTHER
AMOUNTS
$6.73
$160.00
Guaranty Agency Financial Report (GAFR) Guide
MR-10-A Rehabilitated Loans - Interest
Enter the outstanding accrued interest balance of each borrower’s account at the time the
rehabilitated loan was sold to a lender.
MR-10-A Rehabilitated Loans - Other Charges
Enter the outstanding other charges balance of each borrower’s account at the time the
rehabilitated loan was sold to a lender. Other charges include: late charges, collection costs, or
attorney’s fees. In the case of a sale made on or after July 1, 2014, in order to defray collection
costs; the guaranty agency may charge to the borrower an amount not to exceed 16 percent of
the outstanding principal and interest at the time of the loan sale and retain such amount from
the proceeds of the loan sale.
MR-11 FFEL Consolidation Refund
This category is used to report Federal default consolidation loan refunds due to ED as a result
of the sale of certain defaulted FFEL loans consolidated into a Federal Consolidation loan. Due
to the enactment of the Health Care and Education Reconciliation Act (HERA) of 2010,
reporting for this line item is no longer required after June 30, 2010.
Default consolidation loan sales to lenders must be reported to ED within 45 days of their
occurrence. The refund amount due ED is the outstanding principal and accrued interest on the
loan at the time of the sale to the lender less the guaranty agency’s reinsurance complement. The
outstanding principal and accrued interest does not include late charges, collection costs, or
attorney’s fees.
Effective October 1, 2006, guaranty agencies cannot charge the borrower collection costs in
excess of 18.5 percent of the outstanding principal and interest on the defaulted loan at payoff
and the guaranty agency must remit to the Secretary an amount equal to 8.5 percent of the
outstanding principal and interest on the defaulted loan at payoff.
If reinsurance was paid on the loan by multiple reinsurance requests, and reinsurance was paid at
different rates, the agency must prorate its default consolidation payment or pay ED at the
highest reinsurance rate used.
MR-11 FFEL Consolidation Refund - Amount Due To/ (From) Guarantor
This is the amount due to ED for lender consolidation payments. The amount due to ED is the
outstanding principal and accrued interest less the complement of the reinsurance percentage in
effect for the reinsurance claims paid on the loans.
MR-11, FFEL Consolidation Refund - Amount Due To/ (From) Guarantor is the sum of
amounts reported in MR-11, Principal Amount, Interest Amount, and Other Amounts. This is
a system-calculated field that does not allow guaranty agency input.
After June 30, 2010, no activity should be reported on this line item.
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Guaranty Agency Financial Report (GAFR) Guide
MR-11 FFEL Consolidation Refund - Principal Amount
Enter the outstanding principal amount of consolidation payments received by the guaranty
agency during the reporting period. Reduce these amounts by the complement of the
reinsurance percentage in effect for the reinsurance claims paid on the loans.
After June 30, 2010, no activity should be reported on this line item.
MR-11 FFEL Consolidation Refund - Interest Amount
Enter the outstanding accrued interest amount of consolidation payments received by the
guaranty agency during the reporting period. Reduce these amounts by the complement of the
reinsurance percentage in effect for the reinsurance claims paid on the loans.
After June 30, 2010, no activity should be reported on this line item.
MR-11 FFEL Consolidation Refund – Other Amount
Enter the amount of collection costs remitted to the Secretary as a result of a defaulted FFEL
Consolidation. Effective October 1, 2006, this amount should equal 8.5 percent of the 18.5
percent of the outstanding principal and interest on the loan at the time of payoff. If no
collection costs are changed to the borrower the amount reported here would be zero, however,
if any collection costs are charged to the borrower, the Secretary is entitled to up to 8.5 percent,
even if the collection costs are less than 18.5 percent of the outstanding principal and interest on
the loan.
After June 30, 2010, no activity should be reported on this line item.
MR-11-A FFEL Consolidation Payoff – Principal Amount
Enter the amount received from the lender at the time of payoff for the principal amount on the
loan. After June 30, 2010, no activity should be reported on this line item.
MR-11-A FFEL Consolidation Payoff – Interest Amount
Enter the amount received from the lender at the time of payoff for the accrued interest amount
on the loan. After June 30, 2010, no activity should be reported on this line item.
MR-11-B FFEL Consolidation GA Retention – Principal Amount
The amount reported in this line item should represent the reinsurance complement on a
Consolidation Loan at the time of loan consolidation. Enter the amount of the reinsurance
complement that is transferred to the agency’s Federal Fund at the time of consolidation that
represents the complement on the principal amount. After June 30, 2010, no activity should
be reported on this line item.
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Guaranty Agency Financial Report (GAFR) Guide
MR-11-B FFEL Consolidation GA Retention - Interest Amount
The amount reported in this line item should represent the reinsurance complement on a loan at
the time of loan consolidation. Enter the amount of the reinsurance complement that represents
the complement on the accrued interest amount. This amount is also transferred to the agency’s
Federal Fund at the time of consolidation. After June 30, 2010, no activity should be
reported on this line item.
MR-11-B FFEL Consolidation GA Retention - Other Amount
The amount reported in this line item should represent the GA’s collection retention on a FFEL
Consolidation loan. Enter the amount received from the lender at the time of payoff for the
allowable collection cost that cannot exceed 18.5 percent of the outstanding principal and
accrued interest on the loan at the time of payoff. Effective October 1, 2006, this amount is
reduced to 10% and the guaranty agency is required to remit 8.5 percent to the Secretary. The
Secretary’s share of this collection should be reported in MR-11, FFEL Consolidation Refund,
and Other Amounts Column. After June 30, 2010, no activity should be reported on this
line item.
Example: FFELP Loan Consolidation Reporting (Reinsurance Rate = 98%)
Payoff
Amount
$30,000.00
ITEM
NO.
Outstanding
Principal
$20,000.00
x 98%
$19,600.00
Outstanding
Accrued Interest
$10,000.00
x 98%
$9,800.00
AMOUNT DUE
TO/FROM
GUARANTOR
CATEGORY
MR-11
FFEL Consolidation Refund
MR-11-A
MR-11-B
FFEL Consolidation - Payoff
FFEL Consolidation - GA Retention
$31,950.00
Other Charges
$30,000.00
x 18.5%
$5,550.00
PRINCIPAL
AMOUNT
INTEREST
AMOUNT
$19,600.00
$9,800.00
2,550.00
$20,000.00
$400.00
$10,000.00
$200.00
3,000.00
MR-12 GA Administrative Wage Garnishment
This category reports on administrative wage garnishment collection activities by the guaranty
agency on loans for which insurance claims have been paid to the lender and which have not
been assigned to ED by the agency. This includes collections of default, exempt and lender-oflast-resort loan (default) claims on which the guaranty agency is entitled to retain a percentage of
the amount collected to pay for its collection costs. A guaranty agency may not attempt to
collect the following types of claims:
bankruptcy (all Chapters)
death and disability
closed school
Revised: September 2015
Page 48 of 93
OTHER
AMOUNTS
Guaranty Agency Financial Report (GAFR) Guide
false certification
GA Administrative Wage Garnishment collections on exempt claims are to be reported in this
item. An exempt claim includes a loan on which the borrower defaulted after the lender
determined that the borrower failed to establish eligibility for the loan. Collections on exempt
claims are to be made in accordance with the instructions in Student Financial Assistance
Programs bulletin 89-G-159 dated May 1989.
All collections must be reported to ED within 45 days of the receipt of the collections by the
guaranty agency or its agent, whichever is earlier.
Amounts from collection checks returned for insufficient funds (bounced checks) are deducted
prior to reporting collections to ED.
MR-12 Administrative Wage Garnishment - Amount Due To/ (From)
Guarantor
This amount represents collections received through administrative wage garnishment
collections by the guaranty agency on loans for which insurance claims have been paid to the
lender and which have not been assigned to ED by the guaranty agency.
Garnishment is the procedure requiring a borrower’s employer to withhold a portion of a
borrower’s pay to repay the amount the borrower owes on a default or a lender-of-last-resort
loan (default). A guaranty agency’s garnishment procedures must comply with Section 488A of
the HEA, appropriate regulations and policy bulletins.
Collections on bankruptcies are under the jurisdiction of Federal Bankruptcy Courts and take
precedence over the administrative wage garnishment provisions of Section 488A.
Administrative wage garnishment cannot be instituted on a borrower who has filed for
bankruptcy. Administrative wage garnishment in effect at the time a borrower files for
bankruptcy would have to cease if the Bankruptcy Court orders a halt to any collection activity
against a borrower. Report collections ordered by the Bankruptcy Court in line item MR-14,
Bankruptcy Collections.
Report in this line item the total of the “Federal share of collections” associated with wage
garnishment collections. This refers to that portion of collections that remain after the following
has been deducted:
an amount equal to the complement of the reinsurance percentage which was in
effect when the reinsurance payment was made by the Secretary for default claims,
and
an amount equal to 30 percent of collections for both default and exempted claims to
help the guaranty agency pay for the costs of its collection activities on collections
received before October 1, 1993, or
an amount equal to 27 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its
Revised: September 2015
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Guaranty Agency Financial Report (GAFR) Guide
collection activities on collections received on or after October 1, 1993 and received
prior to October 1, 1998, or
an amount equal to 24 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its
collection activities on collections received on or after October 1, 1998 and prior to
October 1, 2003,
an amount equal to 23 percent of collections for default, exempted and lender-oflast-resort loan (default) claims to help the guaranty agency pay for the cost of its
collection activities on collections received on or after October 1, 2003 and prior to
October 1, 2007, or
an amount equal to 16 percent of collections for default, exempted and lenderof- last-resort loan (default) claims to help the guaranty agency pay for the
cost of its collection activities on collections received on or after October 1,
2007.
A guaranty agency must calculate the amounts that are due to ED.
Calculate amounts based on the reinsurance reimbursement rate that was in effect at the time the
guaranty agency was reimbursed. If a borrower account contains original claims and additional
reinsurance that was paid at different rates, the agency must report its collections at either:
the rate at which each individual item was paid or
the highest rate at which any item was paid.
Example: An agency receives a collection on a single borrower’s account that includes two
claims, one of which received reinsurance reimbursement at the 98 percent rate, and the
other at the 80 percent rate. The agency may prorate the collection and report appropriate
amounts at 98% reinsurance reimbursement and 80% reinsurance reimbursement. As an
alternative to this, the guaranty agency may report the entire collection as 98% Reinsurance
Reimbursement, because this was the highest rate at which one of the items in the account
was reimbursed.
MR-12, GA Administrative Wage Garnishment, Amount Due To/ (From) Guarantor is the sum
of amounts reported in MR-12, Principal Amount, Interest Amount and Other Amounts. This
is a system-calculated field that does not allow guaranty agency input.
Example #1
Wage Garnishment Collections (Reinsurance Reimbursement Rate = 95%)
GA Received the Collection on October 10, 2002 (Collection Retention Rate – 24%)
Total
Collected
$8,000.00
Secretary’s
Share
GA Retention
Revised: September 2015
Principal
Interest
Other Charges
5,000.00
($5000 * .95) - ($5000 *. 24)
= $3,550.00
$5000 * .24 = $1,200
2,000.00
($2000 *. 95) - ($2000 *. 24)
= $1,420.00
$2000 * .24 = $480
1,000.00
($1000 * .95) - ($1000 * .24)
= $710.00
$1000 *.24 = $240
Page 50 of 93
Guaranty Agency Financial Report (GAFR) Guide
ITEM
NO.
MR-12
AMOUNT DUE
TO/(FROM) PRINCIPAL INTEREST
OTHER
GUARANTOR AMOUNT AMOUNT AMOUNTS
$
5,680.00
$3,550.00
$1,420.00
$ 710.00
CATEGORY
GA Administrative Wage Garnishment
MR-12-A
Administrative Wage Garnishment - Total Collected
$5,000.00
$2,000.00
$1,000.00
MR-12-B
Administrative Wage Garnishment - GA Retention
$1,200.00
$ 480.00
$ 240.00
Example #2
Wage Garnishment Collections (Reinsurance Reimbursement Rate = 95%)
GA Received the Collection on October 10, 2007 (Collection Retention Rate – 16%)
ITEM
NO.
MR-12
AMOUNT DUE
TO/(FROM) PRINCIPAL INTEREST
OTHER
GUARANTOR AMOUNT AMOUNT AMOUNTS
$
7,900.00
$5,530.00
$1,580.00
$ 790.00
CATEGORY
GA Administrative Wage Garnishment
MR-12-A
Administrative Wage Garnishment - Total Collected
$7,000.00
$2,000.00
$1,000.00
MR-12-B
Administrative Wage Garnishment - GA Retention
$1,120.00
$ 320.00
$ 160.00
Total
Collected
$10,000.00
Secretary’s
Share
GA Retention
Principal
Interest
Other Charges
7,000.00
($5000 * .95) - ($5000 *. 16)
= $5,530.00
$7000 *.16 = $1,120
2,000.00
($2000 *. 95) - ($2000 *.16) =
$1,580.00
$2000 * .16 = $320
1,000.00
($1000 * .95) - ($1000 * .16)
= $790.00
$1000 *.16 = $160
MR-12 Administrative Wage Garnishment – Principal Amount
Enter the principal amount due ED on the collection. To calculate the principal amount: (total
collected and applied to principal) multiplied by (appropriate reinsurance rate) less (total
collected and applied to principal) multiplied by (appropriate retention rate) equals Federal
share of collections.
MR-12 Administrative Wage Garnishment – Interest Amount
Enter the accrued interest amount due ED on the collection. To calculate the accrued interest
amount: (total collected and applied to accrued interest) multiplied by (appropriate reinsurance
rate) less (total collected and applied to accrued interest) multiplied by (appropriate retention
rate) equals Federal share of collections.
MR-12 Administrative Wage Garnishment – Other Amount
Enter the other charges amount due ED on the collection. To calculate the other charges
amount: (total collected and applied to other charges) multiplied by (appropriate reinsurance
rate) less (total collected and applied to other charges) multiplied by (appropriate retention rate)
equals Federal share of collections.
Revised: September 2015
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Guaranty Agency Financial Report (GAFR) Guide
MR-12-A Administrative Wage Garnishment –Total Collected - Principal
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents principal and purchased interest.
MR-12-A Administrative Wage Garnishment –Total Collected - Interest
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents accrued interest.
MR-12-A Administrative Wage Garnishment –Total Collected - Other
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents other charges.
MR-12-B Administrative Wage Garnishment – GA Retention – Principal
Enter the total amount of collections that were applied to that portion of the borrower’s account
that represents principal that is retained by the guaranty agency. To calculate this amount:
multiply the total principal amount by the applicable retention rate.
MR-12-B Administrative Wage Garnishment – GA Retention - Interest
Enter the total amount of collections that were applied to that portion of the borrower’s account
that represents accrued interest that is retained by the guaranty agency. To calculate this amount
multiply the total accrued interest amount by the applicable retention rate.
MR-12-B Administrative Wage Garnishment – GA Retention - Other
Enter the total amount of collections that were applied to that portion of the borrower’s account
that represents other charges that is retained by the guaranty agency. To calculate this amount
multiply the total other charges amount by the applicable retention rate.
MR-13 Default Collections
This category reports on default collections by the guaranty agency on loans for which insurance
claims have been paid to the lender and which have not been assigned to ED by the agency.
This includes collections of default, exempt and lender-of-last-resort loan (default) claims on
which the guaranty agency is entitled to retain a percentage of the amount collected to pay for its
collection costs.
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A guaranty agency may not attempt to collect the following types of claims:
bankruptcy (all Chapters);
death and disability;
closed school; or
false certification
Collections on exempt claims are to be reported in this item. An exempt claim includes a loan
on which the borrower defaulted after the lender determined that the borrower failed to establish
eligibility for the loan. Collections on exempted claims are to be made in accordance with the
instructions in Student Financial Assistance Programs bulletin 89-G-159 dated May 1989. All
collections must be reported to ED within 45 days of the receipt of the collection by the
guaranty agency or its agent, whichever is earlier.
Amounts from collection checks returned for insufficient funds (bounced checks) are deducted
prior to reporting collections to ED.
MR-13 Default Collections - Amount Due To/ (From) Guarantor
This item is used to report default collections received by the guaranty agency on loans for which
insurance claims have been paid to the lender and which have not been assigned to ED by the
guaranty agency. Report in this line item the total of the “Federal share of collections” associated
with collections. This refers to that portion of collections that remain after the following has
been deducted:
an amount equal to the complement of the reinsurance percentage which was in
effect when the reinsurance payment was made by the Secretary for default claims
and;
an amount equal to 30 percent of collections for both default and exempted claims to
help the guaranty agency pay for the costs of its collection activities on collections
received before October 1, 1993;
an amount equal to 27 percent of collections for default, exempted and lender-of-last
resort loan (default) claims to help the guaranty agency pay for the cost of its
collection activities on collections received on or after October 1, 1993 and received
prior to October 1, 1998;
an amount equal to 24 percent of collections for default, exempted and lender-of-lastresort loan (default) claims to help the guaranty agency pay for the cost of its
collection activities on collections received on or after October 1, 1998 and received
prior to October 1, 2003;
an amount equal to 23 percent of collections for default, exempted and lender-of-last
resort loan (default) claims to help the guaranty agency pay for the cost of its
collection activities on collections received on or after October 1, 2003 and received
prior to October 1, 2007 or
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an amount equal to 16 percent of collections for default, exempted and
lender-of-last resort loan (default) claims to help the guaranty agency pay for
the cost of its collection activities on collections received on or after October 1,
2007.
A guaranty agency must calculate the amounts that are due to ED.
Calculate the amounts based on the reinsurance reimbursement rate that was in effect at the time
the guaranty agency was reimbursed. If a borrower account contains original claims and
additional reinsurance that was paid at different rates, the agency must report its collections at
either:
the rate at which each individual item was paid or
the highest rate at which any item was paid.
Example #1
Default Collections (Reinsurance Reimbursement Rate = 98%,
Collections Received by GA on November 1, 2002 (Collection Retention Rate – 24%)
Total
Collected
$38,000.00
Secretary’s
Share
GA Retention
ITEM
NO.
MR-13
Principal
Interest
Other Charges
15,000.00
($15000 *. 98) - ($15000 *
.24)= $11,100
$15000 * .24 = $3,600
12,000.00
($12000 *. 98) - ($12000 * .24)
= $8,880.00
$12000 * .24 = $2880.00
11,000.00
($11000 * .98) - ($11000 * .24)
= $8,140.00
$11000 * .24 = $2,640.00
AMOUNT DUE
TO/(FROM)
PRINCIPAL INTEREST
GUARANTOR
AMOUNT
AMOUNT
$28,120.00
$11,100.00
$ 8,880.00
CATEGORY
Default Collections
OTHER
AMOUNTS
$ 8,140.00
MR-13-A
Default Collections - Total Collected
$15,000.00
$12,000.00
$11,000.00
MR-13-B
Default Collections - GA Retention
$ 3,600.00
$ 2,880.00
$ 2,640.00
Example #2
Default Collections (Reinsurance Reimbursement Rate = 95%)
GA Received the Collection on October 10, 2007 (Collection Retention Rate – 16%)
Total
Collected
$38,000.00
Secretary’s
Share
GA Retention
ITEM
NO.
MR-13
Principal
Interest
Other Charges
15,000.00
($15000 *. 95) - ($15000 *
.16)= $11,850
$15000 * .16 = $2,400
12,000.00
($12000 *. 95) - ($12000 * .16)
= $9,480
$12000 * .16 = $1,920
11,000.00
($11000 * .95) - ($11000 * .16)
= $8,690
$11000 * .16 = $1,760
CATEGORY
Default Collections
Revised: September 2015
AMOUNT DUE
TO/(FROM)
PRINCIPAL INTEREST
GUARANTOR
AMOUNT
AMOUNT
$30,020.00
$11,850.00
$ 9,480.00
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OTHER
AMOUNTS
$ 8,690.00
Guaranty Agency Financial Report (GAFR) Guide
MR-13-A
Default Collections - Total Collected
$15,000.00
$12,000.00
$11,000.00
MR-13-B
Default Collections - GA Retention
$ 2,400.00
$ 1,920.00
$ 1,760.00
MR-13, Default Collections, Amount Due To/ (From) Guarantor is the sum of amounts
reported in MR-13, Principal Amount, Interest Amount and Other Amounts. This is a systemcalculated field that does not allow guaranty agency input.
MR-13 Default Collections – Principal Amount
Enter the principal amount due ED on the collection. To calculate the principal amount: (total
collected and applied to principal) multiplied by (appropriate reinsurance rate) less (total
collected and applied to principal) multiplied by (appropriate retention rate) equals Federal
share of collections.
MR-13 Default Collections – Interest Amount
Enter the accrued interest amount due ED on the collection. To calculate the accrued interest
amount: (total collected and applied to accrued interest) multiplied by (appropriate reinsurance
rate) less (total collected and applied to accrued interest) multiplied by (appropriate retention
rate) equals Federal share of collections.
MR-13 Default Collections – Other Amount
Enter the other charges amount due ED on the collection. To calculate the other charges
amount: (total collected and applied to other charges) multiplied by (appropriate reinsurance
rate) less (total collected and applied to other charges) multiplied by (appropriate retention rate)
equals Federal share of collections.
Other charges may include late charges, collection costs, and attorney’s fees
MR-13-A Default Collections –Total Collected - Principal
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents principal and purchased interest.
MR-13-A Default Collections –Total Collected - Interest
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents accrued interest.
MR-13-A Default Collections –Total Collected - Other
Enter the total amount of collections that were applied to the portion of each borrower’s
account that represents other charges.
MR-13-B Default Collections – GA Retention - Principal
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Enter the total amount of collections that were applied to that portion of the borrower’s
account that represents principal that is retained by the guaranty agency. To calculate this
amount: multiply the total principal amount by the applicable retention rate.
MR-13-B Default Collections – GA Retention - Interest
Enter the total amount of collections that were applied to that portion of the borrower’s account
that represents accrued interest that is retained by the guaranty agency. To calculate this amount
multiply the total accrued interest amount by the applicable retention rate.
MR-13-B Default Collections – GA Retention - Other
Enter the total amount of collections that were applied to that portion of the borrower’s account
that represents other charges that is retained by the guaranty agency. To calculate this amount
multiply the total other charges amount by the applicable retention rate.
MR-14 Bankruptcy Collections
This category is used to report collections on bankruptcy claims. These collections must be
reported to ED. The Secretary of Education is entitled to 100 percent of collections applied to
principal, interest and other charges on these claims .This line item includes collections on
bankruptcies where:
the loan was initially purchased from the lender as a bankruptcy claim or,
the borrower filed for bankruptcy after a default claim was paid to the lender, the
reinsurance claim was paid at only 98, 95, 90, 88, 85, 80, 78 or 75 percent of principal and
interest, and the complement of the reinsurance was requested by the guaranty agency,
and the guaranty agency reported the change in status to ED in MR-3, Status Changes, or
the borrower filed for bankruptcy after a default claim was paid to the lender, the
reinsurance claim was paid at 100 percent of principal and interest.
Collections are received on bankruptcy claims at the direction of the Bankruptcy Court.
Collections may be received in increments while the loan is under the jurisdiction of the court.
This is typical of proceedings in a Chapter 13 bankruptcy (a Wage Earner Plan). Collections may
also be received as a lump sum in the distribution of assets at the conclusion of the bankruptcy
proceedings.
When a guaranty agency receives a collection payment from the Bankruptcy Court it must report
and return all of it to ED. Since a bankruptcy claim is always paid at the 100 percent
reimbursement rate, there is no deduction for a complement of the reinsurance on a claim’s
collections. Also, a guaranty agency may not retain any portion of bankruptcy collections to pay
for collection costs. The guaranty agency can receive amounts for:
Principal,
Purchased Interest (Lender Interest, Guaranty Agency Claim Interest And NonReinsured GA Interest),
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Accrued Interest, And
Any collection charges permitted by law, regulation, or the borrower’s promissory
note.
MR-14 Bankruptcy Collections - Amount Due To/ (From) Guarantor
This amount represents the total amount of collections received by the guaranty agency and its
agents from the Bankruptcy Court for the reporting period for reinsurance claims paid as
bankruptcy claims.
Included are amounts collected: while the loan was under the jurisdiction of the
Bankruptcy Court, and
as a lump sum at the conclusion of the bankruptcy proceedings, even if the money was
collected after the date the proceedings concluded.
MR-14, Bankruptcy Collections, Amount Due To/ (From) Guarantor is the sum of amounts
reported in MR-14, Principal Amount, Interest Amount and Other Amounts. This is a systemcalculated field that does not allow guaranty agency input.
MR-14 Bankruptcy Collections – Principal Amount
Enter the total amount of bankruptcy collections that were applied to the portion of each
borrower’s account that represents principal and purchased interest.
MR-14 Bankruptcy Collections – Interest Amount
Enter the total amount of bankruptcy collections that were applied to the portion of each
borrower’s account that represents accrued interest.
MR-14 Bankruptcy Collections – Other Amount
Enter the total amount of bankruptcy collections that were applied to the portion of each
borrower’s account that represents other charges.
MR-15 Default FFEL Consolidated by DL Fee – Amount Due To/ (From)
Guarantor
This line item is used to report the Secretary’s fee on defaulted Federal Family Education Loans
consolidated by the William D. Ford Direct Loan Program. Guaranty agencies are required to
remit to the Secretary a portion of the collection charge equal to 8.5 percent of the outstanding
principal and interest on the loan. This fee is effective for defaulted loans consolidated on or
after October 1, 2006. If no collection costs are charged, there is no fee due to the Secretary,
however, if any collection costs are charged the Secretary is due up to 8.5 percent of the
outstanding principal and interest on the loan.
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On and after October 1, 2009, a guaranty agency must remit the entire amount of the collection
costs charged the borrower applicable to a defaulted loan that is paid off with excess
consolidation proceeds. The term “excess consolidation proceeds” is defined in the HEA, as,
with respect to any guaranty agency for any Federal fiscal year beginning on or after
October 1, 2009, the proceeds of consolidation loans received to pay defaulted Title IV loans for
that agency that exceed 45 percent of the agency's total collections on defaulted loans in such
Federal fiscal year. The excess consolidation proceeds should be reported on this line item.
MR-16 Total
The sum of this item equals the sum of amounts reported in MR-1 through MR-15, Amount
Due To/ (From) Guarantor. This is a system-calculated field that does not allow guaranty agency
input. The total will be displayed as a positive number which represents the amount due to the
guarantor or a negative number which represents the amount due ED. Amounts due ED from
monthly processing could be offset by pending Account Maintenance Fee (AMF) payments.
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NON-PAYMENT ACTIVITY (Accounting Data)
This section reports on guaranty agency monthly activities, which do not involve the receipt or the
disbursement of funds between ED and a guaranty agency. This section includes reporting on the
Treasury Offset Program (TOP) and Status Changes for non-payment activities. All amounts reported in
this section (MR-17 through MR-23) can be positive or negative and must reflect activity that occurred
within the reporting period.
Treasury Offset Program (TOP)
This category reports non-payment activity on accounts after Treasury Offset Program (TOP),
(formerly called IRS offset), have occurred and non-payment information which is used to calculate the
guaranty agency’s Federal receivable balance.
The guaranty agency initiates action to collect on defaulted loan accounts by way of TOP offset.
Collection of amounts owed on the defaulted loan is offset against the borrower’s Federal income tax
refunds. The U.S. Internal Revenue Service under the Treasury Offset Program (TOP) makes offsets.
Only principal and interest is offset. All other charges must be collected directly by the guaranty agency or
its agent. The guaranty agency and its agents can continue to receive collections from the borrowers’ after
the TOP procedures have been initiated. Collections received by the guaranty agency are reported in MR13, Default Collections.
The agency begins the offset process in October of each year. The TOP begins offsetting income tax
refunds the following January. Attempts to offset will continue until the earlier of:
a borrower’s Federal income tax refund is offset against the borrower’s debt,
the guaranty agency stops the TOP offset proceedings on the account,
12 months (January - December) have passed without a TOP offset occurring, or
when the debt is paid in full.
The TOP charges a processing fee to carry out an offset. This amount can change each year. The
processing fee is added to the amount owed on the account when ED sends the information to TOP for
the agency. The processing fee is only charged if an offset occurs. The TOP deducts the fee before
returning the amount collected to ED but it is included in the amount reported to ED.
Amounts collected under the TOP are reported to the guaranty agency. However, the funds
themselves are transferred to ED. This form is used to reconcile TOP Offset transactions and provide
the guaranty agency with any funds due under this process.
Since ED reimburses a guaranty agency for its losses on default claims, ED receives whatever is
collected from borrowers through TOP offset. Collections received as a result of the TOP offset process
are the federal government’s collection, not the guaranty agencies. This section is also used to report when
the TOP unknowingly offsets a spouse’s portion (injured spouse) of a joint income tax refund.
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No amounts are deducted for:
the complement of the reinsurance percentage which was in effect when the reinsurance
payment was made by the Secretary for default claims, or
the percent deducted from collections to help the guaranty agency pay for the cost of its
collection activities.
ED uses the information reported in these items for reporting and accounting purposes. Though the
TOP reports some summary level information directly to ED, an agency must provide the detailed
information requested here in order for ED to carry out its responsibilities under law and regulation. TOP
offset activities must be reported within 45 days after the guaranty agency receives notice of TOP offset
from the Department of Treasury.
Principal Amounts Column
The total amount offset or refunded for this TOP offset activity that was applied to the portion
of each borrower’s account that represents principal and purchased interest. If the amount of
the TOP offset results in the borrower overpaying the amount due on the borrower’s account,
then report that portion of the overpayment, which cannot be correctly charged to any category
in this column.
Interest Amounts Column
The total amount offset or refunded for this TOP offset activity that is applied to the portion of
each borrower’s account that represents accrued interest.
Other Amounts Column
The total amount offset or refunded for this TOP offset activity that is applied to the portion of
each borrower’s account, which represents other charges. Other charges can include only TOP
fees. This column is not applicable for reporting in MR-18, Non-Federal Share Offset.
MR-17 Treasury Offset
Enter the amounts offset against defaulted borrower’s Federal income tax funds by the U.S.
Internal Revenue Service under the Treasury Offset Program. The amount offset is used to
reduce each borrower’s FFEL Program loan indebtedness. Report all TOP offsets in this item,
even if it results in the borrower’s overpaying the amount due in the account. The overpayment
is corrected by refunding the appropriate amount to the borrower and reporting this in item MR4, TOP Overpayments.
MR-18 Non-Federal Share Offset
Enter the amount of the non-Federal share offset. The non-Federal share offset is the portion of
the TOP offset, which is an amount equal to the complement of the reinsurance percentage,
which was in effect when the Secretary made the reinsurance payment for default claims.
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The Other Amounts Column should not be used for this line item since any TOP fees should be
reported on line item MR-4, MR-17, and MR-19, as appropriate. TOP fees are not applicable to
the Non-Federal Share Offset.
MR-19 Treasury Offset Reversals
Enter the amount of Treasury offset reversals. A Treasury offset reversal (formerly injured
spouse claim) is the portion of the TOP offset made against that portion of a Federal income tax
refund which is attributable to the spouse of the defaulted borrower when a joint income tax
return is filed.
The spouse files a claim for this portion with the TOP. The TOP refunds the amount directly to
the spouse, and informs the guaranty agency, which then increases the defaulted borrower’s
account balance by the amount of the refund.
Status Changes - Account Balance at Conversion
This category reports on guaranty agency activities, which do not involve the receipt or disbursement
of funds between ED and a guaranty agency. ED needs this information for accounting and other
reporting purposes. This category also includes the account balance at conversion for any additional
amounts requested in MR-3, Status Changes.
This category is used to report on reinsurance default and lender-of-last-resort loan (default) claims
paid at 100 percent whose status changed to another claim category. This section is also used to report
change of status for bankruptcies that are not discharged and returned to default or lender-of-last-resort
loan (default) claim status when originally repurchased as a default.
A guaranty agency must report this information to ED when a defaulted borrower:
dies;
becomes totally and permanently disabled;
files for bankruptcy;
has a loan discharged due to school closure; or
has a loan discharged due to false certification by the school.
A change in status of a default claim paid at 100 percent has no effect on the amount of reinsurance
paid on the claim however the status change must be reported in this section.
Change of status for default claims paid at less than 100 percent are reported in MR-3, Status Changes
for reimbursement of the complement. A guaranty agency is entitled to additional reinsurance due to such
a change. In addition, the account balance at conversion for these additional reinsurance requests should
be reported in this category, MR-20 through MR-22.
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Account Balance at Conversion – Principal Amounts Column
The balance for the amount of principal and purchased interest paid to the lender for the default
or lender-of-last-resort loan (default) claim which is still outstanding (that is, collections have not
been received from the borrower on it) at the time this non-payment activity report is submitted
to ED, for each type of claim for the reporting period.
Do not include amounts paid to lenders for other items such as accrued interest, late charges,
collection costs, and attorney’s fees in this column.
Account Balance At Conversion - Interest Amounts Column
The balance for the amount of accrued interest, which is still outstanding (that is, collections
have not been received from the borrower on it) at the time this non-payment activity report is
submitted to ED, for each type of claim for the reporting period.
Account Balance At Conversion - Other Amounts Column
The balance for the amount of other charges which are still outstanding (that is, collections have
not been received from the borrower on it) at the time this non-payment activity report is
submitted to ED, for each type of claim for the reporting period. This includes amounts for: late
charges, collection costs, and attorney’s fees.
MR-20 Default/LLR to Death and Disability
Enter the amounts for default and lender-of-last-resort loan (default) claims being reported due
to a change in status to death or disability. A death claim is one on which the loan is cancelled
due to the borrower’s death. This includes a Federal PLUS loan death claim paid to a lender
when a student, on whose behalf a parent received the Federal PLUS loan, dies. A disability
claim is one on which the loan is conditionally discharged due to the total and permanent disability of the borrower and the loan is assigned to ED. Also include exempt claims being reported
due to a change in status to death or disability.
MR-21 Default/LLR to Closed School/False Certification
Enter the amounts for default and lender-of-last-resort loan (default) claims being reported due
to the change in status to a closed school or false certification claim. A closed school claim is one
on which a claim is paid to a lender because the student was unable to complete the program in
which the student was enrolled due to the closure of the institution. A false certification claim is
one on which a claim is paid to a lender because the student’s eligibility to borrow under the
FFEL Program was falsely certified by an eligible institution of higher education. Also include
exempt claims being reported due to a change in status to closed school or false certification
claim.
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MR-22 Default/LLR to Bankruptcy
Enter the amounts for default and lender-of-last-resort loan (default) claims being reported due
to the change in status of the default claim to a Chapter 7, 11, 12 or 13 Bankruptcy due to the
Borrower filing for bankruptcy. During the course of the bankruptcy proceedings, the agency
must report and return to ED any amounts paid at the direction of the Bankruptcy Court on
MR-14, Bankruptcy Collections. Also include exempt claims being reported due to a change in
status of the default claim to a Chapter 7, 11, 12 or 13 Bankruptcy.
MR-23 Bankruptcy to Default/LLR
Enter the amounts for Chapter 7, 11, 12 and 13 bankruptcies that are not discharged and return
to default or lender-of-last-resort loan (default) claim status. If the bankruptcy proceedings are
concluded and the loan is not discharged, then the agency must refund to ED any additional
bankruptcy reinsurance payment received and report it on MR-9, Overstated Claims and return
the loan to its original reinsurance rate. The guaranty agency would continue to hold the loan
and attempt to collect on it like any other default or lender-of-last-resort loan (default) claim.
However, the change in status must also be reported in this Section. Also include exempt claims
being reported due to a change in status of the default claim to a Chapter 7, 11, 12 or 13
bankruptcy that are not discharged and return to default or lender or lender-of-last resort loan
(default) claim status.
Agency Accruals (Accounting Entries)
This Section reports on amounts owed to ED on accounts held by the guaranty agency, including an
estimate of the age of these amounts. ED uses this information in conjunction with guaranty agency
monthly/quarterly reporting, to calculate guaranty agency’s Federal receivable balances. The Federal
receivable balance outstanding includes amounts for default, exempt and default lender-of-last-resort
claims, accrued interest and other charges, on which reinsurance has been requested by or paid to the
guaranty agency based upon the account’s reinsurance percentage rate of 100, 98,95,90,88,85,80,78, or 75.
Example: Borrower loan balance to include Principal, interest and other charges x (times) the
reinsurance applicable loan percentage rate; i.e.
Correct Method Example: Loan balance (amount paid to lender) $100.00 ($100.00 x 95%) = $
95.00 Federal Receivable.
Do not include in the calculation the lender insurance percentage rate; i.e., $100.00 x 98% x 95%.
This method will create the GA reimbursement amount or reimbursement percentage rate and
when combined with the complement amount creates a non-reported shortage; i.e.
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Incorrect Method Example:
Borrower balance
Complement amount
GA Reimbursed amount plus complement
Non-reported
Shortage in Federal Receivable calculation
Original borrower balance
$100.00 * 98% * 95%
($100%-95%) * $100.00
$ 93.10
5.00
98.10
1.90
$ 100.00
This information is also needed in order to adjust ED’s financial records and comply with federal
government financial reporting requirements. This reporting only concerns FFEL program loans, on
which claims have been paid to lenders and reinsurance has been requested or paid to the guaranty
agency. GA’s are required to submit this section monthly. All amounts reported in this section (MR-24
through MR-26) can be positive or negative.
Amounts reported on line items MR-24 through MR-26, Agency Accruals, represents the guaranty
activity for the current reporting period, (e.g., monthly).
Principal Amounts Column
The total amount of principal and purchased interest activity for the reporting period, based
upon the account’s applicable reinsurance percentage (amount paid by ED). Principal includes
all purchased interest because purchased interest must be capitalized by the guaranty agency.
This column is not applicable for reporting on MR-26, Agency Accruals.
Interest Amounts Column
The total amount of accrued interest calculated by the guaranty agency on the loan principal of a
claim for collection from the borrower during the period being reported based upon the
account’s applicable reinsurance percentage rate (amount paid by ED).
Other Amounts Column
The total amount of fees, penalties, collection charges and any other charges based upon the
account’s applicable reinsurance percentage rate (amount paid by ED) that has accrued for any
loan for the reporting period.
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MR-24 Collection Terminations
Enter the dollar amount of the portion of federal receivable balances (i.e. loan principal, accrued
interest, and other charges) on which the agency has decided to terminate collection activities and
not to make any further attempt to collect the amount due (i.e., loans with small balances, less
than $100.00). All collection terminations must meet standards approved by ED.
MR-25 Compromises
Enter the dollar amount of the portion of the federal receivable on which the agency has reached
a compromise agreement with the debtor. Compromise refers to a negotiated agreement
between the debtor and the guaranty agency to accept a payment of a lesser portion of the total
debt as full liquidation of the entire indebtedness. Guaranty agencies are permitted in certain
cases to accept a compromise amount from a debtor as full satisfaction of the debt to all parties
(reference Dear Agency Director Notice dated January 21, 1994).
MR-26 Agency’s Accruals
Enter the amount of periodic interest accrued on loan principal for the current reporting period
of the agency (e.g. month). Include interest that is accrued and also collected in the same period.
Also report amounts of additional other charges (e.g., collection costs) added to the borrowers’
accounts during the current reporting period. Include all accrued amounts deemed collectible to
which the Secretary is entitled to an equitable share.
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GUARANTY AGENCY
FINANCIAL REPORT
MONTHLY/QUARTERLY
2
Chapter
This Section reports on amounts owed to ED on accounts held by the guaranty agency, including an
estimate of the age of these amounts. ED uses this information in conjunction with guaranty agency
monthly payment reporting, to calculate guaranty agency’s Federal receivable balances. This information
is also needed in order to adjust ED’s financial records and comply with federal government financial
reporting requirements. This reporting only concerns FFEL program loans, on which claims have been
paid to lenders and reinsurance has been requested or paid to the guaranty agency. GA’s are required to
submit this section monthly. All amounts reported in this section (MR-27 through MR-42) can be positive
or negative.
Agency Accruals (Information)
ED uses line items MR-27 through MR-31 in conjunction with guaranty agency monthly payment
reporting, to calculate the guaranty agency’s Federal receivable balance. The Federal receivable balance
outstanding includes amounts for default, exempt and default lender-of-last-resort claims, accrued interest
and other charges, on which reinsurance has been requested by or paid to the guaranty agency based upon
the account’s reinsurance percentage rate of 100, 98,95,90,88,85,80,78, or 75.
Example: Borrower loan balance to include Principal, interest and other charges x (times) the
reinsurance applicable loan percentage rate; i.e.
Correct Method Example: Loan balance (amount paid to lender) $1,000.00 ($1,000.00 x 95%)
= $ 950.00 Federal Receivable.
Amounts reported on line items MR-27 through MR-31, Agency Accruals, represents the guaranty
agency activity for the current reporting period (e.g. monthly).
Enter all dollar amounts (positive and negative) to the nearest cent, and include decimal point.
Principal Amounts Column
The total amount of principal and purchased interest activity for the reporting period, based
upon the account’s applicable reinsurance percentage (amount paid by ED). Principal includes
all purchased interest because purchased interest must be capitalized by the guaranty agency.
Interest Amounts Column
The total amount of accrued interest calculated by the guaranty agency on the loan principal of a
claim for collection from the borrower during the period being reported based upon the
account’s applicable reinsurance percentage rate (amount paid by ED).
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Other Amounts Column
The total amount of fees, penalties, collection charges and any other charges based upon the
account’s applicable reinsurance percentage rate (amount paid by ED) that has accrued for any
loan for the reporting period. No reporting is required in the Other Amounts column for line item MR-32
Ending Balance on Defaulted Loans.
MR-27 Default FFELP Loans Consolidated By Direct Loan Program
Enter the federal receivable amounts of Federal Family Education Loan Program loans, which
were consolidated in the William D. Ford Direct Loan Program during the period being
reported.
MR-28 Subrogated Loans
Enter the federal receivable dollar amount for subrogated loans (permanent assignments to ED).
Report only on subrogated loans that are accepted by the Debt Collection Service during the
reporting period.
MR-29 Default Loans Transferred Out
Enter the net dollar amount of federal receivables transferred to another guaranty agency during
the reporting period. Report only those accounts that have been accepted by another guaranty
agency during the period being reported. Do not include loan guarantees, loans in repayment or
loans where the status is, or has changed to death, disability, bankruptcy, closed school, false
certification, settled loans or loans written-off.
MR-30 Default Loans Transferred In
Enter the net dollar amount for all federal receivables transferred to the agency from another
guaranty agency during the reporting period. Do not include loan guarantees, loans in repayment
or loans where the status is, or has changed to death, disability, bankruptcy, closed school or
false certification.
MR-31 Other Transactions Affecting Federal Receivable
Enter the net dollar amount affecting the federal receivable that is not reported elsewhere on this
report. Include balances (total balance due) of $25.00 or less that do not meet the requirements
for MR-24, Collection Terminations or MR-25, Compromises. Any amounts reported in MR-31
must be accompanied by details (in the GA Comment section of the GAFR) to support the
entry (i.e., reference to line item(s) and applicable amount(s). Details reported in the GA
Comment section should support the total amount reported in MR-31. Positive amounts
represent a decrease in the federal receivable balance and negative amounts represent an increase
in the federal receivable balance.
Until the Guaranty Agency Financial Report (GAFR) is revised, use this line item to report the
federal receivable portion of unpaid refund discharges, teacher loan forgiveness discharges, and
Consolidation loan partial discharges on guaranty agency held loans. Effective July 1, 2014, use
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this line item to report rehabilitation loan assignments to the Department under the
Rehabilitation Loan Purchase Program. Use the GA comment section of this report to identify
amounts associated with loans (rehabilitation)sales to Education.
Use the GA Comment section of this report to identify all line item adjustments with
corresponding amounts in addition to unpaid refund discharges, teacher loan forgiveness
discharges, and rehabilitated loan assignments. Please indicate for each transaction whether the
transaction is an increase or decrease to the federal receivable balance.
Example: A guaranty agency has two requests for discharges on loans they hold:
Borrower
Amount
Reinsurance
Reimbursement
#1
#2
$ 1,000,00
500.00
1000*98%
500*95%
Federal Receivable
Subtotal
$980.00
$475.00
1,455.00
The amount entered in MR-31, Other Transactions Affecting Federal
Receivable, Principal Amount is $1,455.00.
MR-32 Ending Balance of Defaulted Loans
This dollar amount reflects the agency’s total outstanding federal receivable on the accrual basis
at month end. The sum of MR-33 through MR-40, Delinquency by Debt category should equal
total principal and interest reported in this line item.
In addition the Department of Education (ED) uses guaranty agency reporting to establish the
federal receivable and check for reasonability. Below is the methodology that should serve as a
guide for reporting the Federal Receivable Balance on Line Item MR-32, Ending Balance on
Defaulted Loans.
Instructions: Start with the preceding periods ending balance as the beginning Federal
Receivable Balance (MR-32, Ending Balance on Defaulted Loans). From that balance add
and subtract the current period activity to arrive at the Federal Receivable Balance at the end
of the period. Then compare the period calculated federal receivable balance with the
period’s ending balance as reported on MR-32 Ending Balance on Defaulted Loans. Check
for reasonability.
(+) The preceding periods ending Federal Receivable Balance as reported on MR-32,
Ending Balance on Defaulted Loans.
(+) Additions to the Federal Receivable Balance:
Claims Paid (Principal)
MR-1-A, Defaults
MR-1-B, Exempt and Lender of Last Resort
Activity on Accounts and Non-Payment Activity (Principal and Interest)
MR-4, TOP Overpayments
MR-18, Non-Federal Share Offset
MR-19, Treasury Offset Reversals
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MR-23, Bankruptcy to Default/Lender of Last Resort
Status Changes (Principal and Interest)
MR-3-A, Death/Disability
MR-3-B, Closed School/False Certification
MR-3-C, Bankruptcy
Agency Accruals (Principal and Interest)
MR-26, Agency’s Accruals
MR-30, Default Loans Transferred In
(-) Decreases to the Federal Receivable Balance
CFY and PFY Repurchases (Principal)
MR-5-A, MR-6-A, Defaults
MR-5-B, MR-6-B, Exempt/Lender of Last Resort
CFY and PFY Partial Refunds (Principal)
MR-7-A, MR-8-A, Defaults
MR-7-B, MR-8-B, Exempt/Lender of Last Resort
Overstated Claims (Principal)
MR-9-A, Defaults
MR-9-B, Exempt/Lender of Last Resort
Payments to ED for Rehabilitated Loans, FFEL Consolidation refunds and
collections on defaulted loans:
MR-10, Rehabilitated Loan Refund (Principal Amount)
MR-10-A, Rehabilitated Loans (Principal and Interest Amounts)
MR-11, FFEL Consolidation Refund (Principal and Interest Amounts)
MR-12, Administrative Wage Garnishment (Principal and Interest)
MR-12-B, Administrative Wage Garnishment – GA Retention (Principal and
Interest)
MR-13, Default Collections (Principal and Interest)
MR-13-B, Default Collections – GA Retention (Principal and Interest)
Non-Payment Activity (Principal and Interest)
MR-17, Treasury Offset
MR-20, Default/Lender of Last Resort to Death/Disability
MR-21, Default/Lender of Last Resort to Closed School/False Certification
MR-22, Default/Lender of Last Resort to Bankruptcy
MR-24, Collection Terminations
MR-25, Compromises
MR-27, Default FFEL Consolidated by Direct Loan Program
MR-28, Subrogated Loans
MR-29, Default Loans Transferred Out
(+/-) Increase or Decrease to the Federal Receivable Balance
MR-31, Other Transactions Affecting Federal Receivable
(=) Ending Federal Receivable Balance. The sum of the amounts shown above is used to
derive an ending receivable balance at period end. This Federal Receivable Balance
amount is compared to the Federal Receivable Balance as reported on the GAFR, Line
Item MR-32 at period end. MR-32, Ending Balance on Defaulted Loans should also
be the total of MR-33 through MR-40, Delinquency by Debt Section.
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Delinquency by Debt
These line items report amounts owed to ED on accounts held by the guaranty agency at month
end, including an estimate of the age of these amounts. This information is needed in order to
adjust ED’s financial records and to comply with federal government financial reporting
requirements. On these line items only report FFEL Program loans on which claims have been
paid to lenders and reinsurance has been requested by or paid to the guaranty agency. Report
only on accounts held by the guaranty agency on borrowers’ loans, whether or not the guaranty
agency has a repayment schedule with the borrower.
Amounts reported on line items MR-32 through MR-40, Delinquency by Debt, represent the
agency’s outstanding federal receivable balance at the end of the reporting period based upon the
account’s applicable reinsurance percentage rate. These amounts are cumulative from the
inception of the FFEL program. Include all loans since the beginning of the agency’s FFEL
Program participation on which default, exempted and default lender-of-last-resort claims have
been paid and on which a balance is outstanding.
Claims permanently assigned to ED are not to be reported in this section because the agency no
longer holds the account.
Do not include amounts for repurchased, rehabilitated loans, or defaulted loans consolidated
under the Federal Direct Loan Program. Also do not include loans for the following types of
claims: bankruptcy, death and disability and closed school or false certification.
When reporting an outstanding balance, which is owed to ED, include only that portion of an
account that is based upon the applicable reinsurance reimbursement rate. Though the guaranty
agency may estimate the outstanding balance for each aging category, the sum of the amounts
reported must accurately reflect the total Federal Receivable at the agency.
MR-33 Not Delinquent
If a borrower complies with a repayment schedule, then the account is reported as not
delinquent. An account is also reported in this line item if the first scheduled payment is not due
by the last day of the month covered by this report.
MR-34 (1 – 90 Days)
through
MR-40 Over 10 Years
Enter the outstanding dollar amount for the number of days that the borrower is delinquent:
On the repayment schedule established by the lender before the guaranty agency’s
payment of the lender’s claim, or
An amount for accounts that has been scheduled or rescheduled under a repayment
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agreement, but the borrower is not meeting the repayment agreement.
The first day of delinquency is the day after the due date of the first missed scheduled or
rescheduled payment not later made.
Since a claim is usually not paid to a lender until after—
180 days of delinquency for loans delinquent before 10/7/98, and
270 days for loans delinquent on or after 10/7/98,
The sum of MR-33 through MR-40 should equal MR-32, Ending Balance on Defaulted Loans on
the accrual basis.
Bankruptcy Reporting
MR-41 Ending Balance on Bankruptcies
Line item MR-41, Ending Balance on Bankruptcies, represents the outstanding bankruptcy
balance at the end of the period being reported and amount is not reduced by any reinsurance
rate but reported at 100% of balance. This amount is cumulative from the inception of the
FFEL program. Enter the dollar amount that reflects the agency’s total outstanding federal
balance for bankruptcies (at 100% rate) on the accrual basis at the end of the period being
reported.
MR-42 Bankruptcies Transferred Out
Line item MR-42, Bankruptcies Transferred Out, represents the activity for the current reporting
period (report at 100% of balance).
Enter the dollar amount that reflects principal, interest and other charges associated with
bankruptcy accounts transferred to another guaranty agency at 100% rate for the period being
reported (for example bankruptcy transfers to the Educational Credit Management Corporation
(ECMC) or to ED.
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GUARANTY AGENCY
FINANCIAL REPORT
ANNUAL
Chapter
3
The Annual Report (AR) provides the Department with information on the guaranty agency’s
activities concerning loan guarantees, claims paid to lenders and the agency’s financial activities, including
activities concerning its Federal Fund, and the agency’s Operating Fund. Guaranty agency reporting on
the restricted account is no longer required. Information in this section must reflect activity under all
FFEL programs (Federal Stafford, PLUS Loans, Federal SLS, Federal Consolidation and Unsubsidized
Stafford Loans for Middle-Income Borrowers) in, or as of the end of, the federal fiscal year. The Annual
Report must be submitted to ED no later than 60 days after the end of the federal fiscal year (September
30th).
Amounts reported in the Federal Fund and Operating Fund reflects the annual uniform financial
projections for guaranty agencies. Data collected will also provide the Department a basis for:
financial reviews,
evaluating the current and projected financial status of guaranty agencies,
projecting the impact of changes in revenue, and
managing guaranty agency federal funds held by the agency.
The guaranty agency’s books of account must support all amounts reported. The amounts reported
in this report must be on an accrual basis for, or through, the end of the federal fiscal year. This
must be done regardless of the agency’s method and period of accounting used for its annual audited
financial statements and other financial reports. All amounts reported in this section for Current Fiscal
Year (AR-15 through AR-57) can be positive or negative.
During previous fiscal years several guaranty agencies merged and more agencies may merge or
otherwise change structure in the future. In order to maintain a reasonable database with respect to the
last quarter of operation of an agency, an AR must be completed and submitted to ED by the merging
and succeeding guarantor. If a merger occurs, both guaranty agencies guaranty agencies must coordinate
to ensure accurate reporting.
The merging guaranty agency should report on all Annual Report line items, as appropriate, and
according to the instructions.
The gaining guaranty agency should report on AR-6, Loans Transferred In; and the Federal Fund
balance from the merging guarantor received in AR-20, Federal Fund Other Revenues
After a guaranty agency’s Annual Report is accepted by ED, it is still possible that an error may
be discovered and an adjustment will be needed. ED defines an adjustment as a change to an
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agency’s Annual Report after acceptance. Guaranty agencies are able to submit amended Annual
Reports via the GAFR web application only.
NOTE: No amended Annual Reports should be entered into the Financial Management web
application prior to FSA’s review and acceptance of the proposed amendment. Proposed
amendments that affect the prior fiscal year’s Federal Fund balance will not be accepted in the
current fiscal year. These adjustments will have to be made in the next fiscal year. Proposed
amendments that do not affect the Federal Fund balance and are accepted by FSA may be entered
into the Financial Management web application in the current fiscal year.
Enter all dollar amounts to the nearest dollar. Do not include decimal points and cents. ED always
assumes that the last digit in the dollar amount field represents dollars, not cents. To facilitate accurate
reporting, where possible FSA began prepopulating a number of fields. Where applicable, the formula is
displayed.
The GAFR Annual Report must be completed and submitted for a federal fiscal year of activity after
the end of that federal fiscal year and must be received by ED within 60 days after the end of the fiscal
year. Enter the Guaranty Agency Code, the Guaranty Agency State Name, and the Federal Fiscal Year
Ending date. Enter the date as MM/CCYY.
Loans in Repayment (LIR)
This section shows the agency’s activities concerning loan guarantees and claims paid to lenders.
Report on all loans originally guaranteed by the agency under the FFEL Program, even if these loans were
later canceled or later lost their insurance or reinsurance.
LIR = [AR-1] – [AR-2] + [AR-3] – [AR-4] – [AR-5] + [AR-6] – [AR-7] – [AR-8] – [AR-9] –
[AR-10] – [AR-11] – [AR-12] – [AR-13] – [AR-14]
All amounts reported in AR-1 through AR-12 are cumulative since the beginning of the agency’s
participation in the FFEL Program. Line Items AR-13 and AR-14 should reflect point in time end-offiscal year status.
Information submitted in this section should be consistent with and comparable to relevant
information reported to the National Student Loan Data Systems (NSLDS).
AR- 1 Loans Guaranteed (Except Federal Consolidation)
Enter the original principal guaranteed dollar amount of all loans guaranteed.
Do not:
reduce by any cancellation or
include amounts of loan guarantees transferred in from another guaranty agency.
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AR- 2 All Loans Canceled (Except Federal Consolidation)
Enter the original principal amount of loans canceled before first disbursement, loans disbursed
where the lender’s check is returned uncashed, the lender’s check remains uncashed 120 days
after disbursement, the electronic funds transfer (EFT) is not completed, or the amount of the
loan disbursed by EFT is returned within 120 days of the transfer.
School refunds are not to be reported in AR-2 if:
an amount is returned to the lender within 120 days after the lender’s check is cashed or
the EFT is completed, treat it as a cancellation;
a loan has multiple disbursements, and part is canceled under these conditions, and
the rest is never disbursed, include the cancelled part of the loan amount in this item
(the amount never disbursed); and
only part of a loan is canceled under these conditions, include that part of the loan
amount here.
AR- 3 Federal Consolidation Loans Guaranteed
Enter the original principal dollar amount of federal consolidation loans guaranteed before any
cancellation.
Include:
any interest capitalized by the lender or
the borrower interest due on the underlying loans at the time they are consolidated.
Do not include:
amounts of loan guarantees transferred in from another guaranty agency.
AR- 4 Federal Consolidation All Loans Canceled
Enter the original principal amount of federal consolidated loans canceled before first
disbursement; loans disbursed where the lender’s check is returned uncashed; the lender’s check
remains uncashed 120 days after disbursement; the electronic funds transfer (EFT) is not
completed; or the amount of the loan disbursed by EFT is returned within 120 days of the
transfer.
AR- 5 Uninsured Loans
Enter the original principal amount of loans, which have lost insurance and are not eligible for
cure under ED regulations. When loan losses insurance it means the guaranty agency will not
pay a claim to a lender, or if it did, the lender refunded the claim amount. Any loan, which loses
insurance also, loses eligibility for reinsurance.
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Do not include:
any loan amount(s), which were canceled in this item, whether the amount was canceled
before or after disbursement. A canceled loan is not considered to be uninsured as these
terms are used in the annual report.
AR- 6 Loans Transferred In
Enter the original principal amount, net of cancellations prior to or subsequent to the date of
transfer, of all loan guarantees transferred to this agency from other guaranty agencies (prior to
default).
Include:
voluntary transfers. A voluntary transfer is at the request of a borrower, lender or
guaranty agency to the agencies involved prior to any claim submittal to maintain the
borrower records with one agency.
involuntary transfers. An involuntary transfer, often referred to as the “Secretary’s Plan”
is a transfer directed or requested by the Secretary of Education. The Secretary’s Plan
protects the interest of the FFEL Program when a guaranty agency faces insolvency or
otherwise may not be able to carry out its program responsibilities.
AR- 7 Loans Transferred Out
Enter the original principal amount, net of cancellations prior to date of transfer, of all FFEL
loan guarantees transferred to another guaranty agency (prior to default).
Include loan guarantees transferred to the Department as authorized in legislation.
Reduce AR-7 to reflect the transfer of loans from the Department back to the guaranty
agency where a loan was originally sold in error.
Entries must be reported as positive numbers.
AR- 8 Default Claims Paid
Enter the amount paid to lenders for default, exempt (include claims where the student has been
convicted of, or plead nolo contendere to, a crime involving fraud in obtaining title IV student
aid and claims where the borrower is a victim of identity theft) and default lender-of-last-resort
loans. A default claim is one on which the borrower failed to make an installment payment
when due as defined in regulations.
Regardless of whether the effective date of the borrower payment, received from a lender and
forwarded to the guaranty agency for the loan, is before or after an insurance claim was paid,
treat the payment as a refund and subtract the amount of refunded principal from this amount.
Note:
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Borrower payments received by the lender and forwarded to the guaranty agency,
whether before or after claim payment or receipt of reinsurance, are not subject to
collection retention and should be reported here.
School refunds received before reinsurance claim filing should be deducted from the
claim request amount and school refunds received after reinsurance filing should be
treated as a refund of reinsurance and deducted from amounts reported in this item.
If a lender repurchases (full refund of reinsurance) a loan previously paid as a default, by
the agency, subtract the principal amount that was repurchased by the lender.
If a loan is rehabilitated, subtract the amount of outstanding principal on the loan at the
time the loan is repurchased by the lender. If a loan is rehabilitated loan and assigned to
the Department through the Rehabilitation Loan Purchase Agreement., do not subtract
the outstanding principal.
If a defaulted FFEL loan is consolidated under a Federal Direct Consolidation Loan, do
not subtract any amount from this item.
Claims, which lose insurance, must also be deducted from this amount. If ED has paid a
default reinsurance claim to the guaranty agency in such a situation, then the claim
amount must be reported and refunded to ED using the monthly report.
If the loan loses reinsurance, but not insurance, then leave this amount unchanged.
AR- 9 Bankruptcy Claims Paid
Enter the amount of principal paid to lenders for all types of bankruptcy claims (including
Chapters 7, 11, 12 and 13).
If the agency receives a payment from a lender for the loan after a bankruptcy insurance claim
was paid, treat the payment as a refund and subtract the amount of refunded lender principal
from this amount. However, if the agency receives a payment at the direction of the Bankruptcy
Court during the course of the bankruptcy proceedings, then treat it as a collection and report it
on the monthly report.
If the Bankruptcy Court does not discharge the loan, then the guaranty agency must arrange for
a lender to repurchase it. Subtract the amount of repurchased principal from this amount. If
ED has paid a bankruptcy reinsurance claim to the guaranty agency on the loan, then the
reinsurance claim amount must be reported and refunded to ED, within 45 days, on the
monthly report.
If the borrower subsequently defaults after the repurchase, then treat the loan like any other
default and report the amount in items AR-8, Default Claims Paid-Amount. A guaranty agency
may also file with ED for default reinsurance on the loan using monthly report.
Do not include:
claims paid as defaults where the borrower files for bankruptcy after the default claim was
paid. Report such default claims in item AR-8, Default Claims Paid-Amount.
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AR-10 Death and Disability Claims Paid
Enter the amount of principal paid to lenders for death, and for total and permanently disability
claims.
A death claim is one on which the loan is canceled due to the death of the borrower or a
dependent student. This includes a Federal PLUS loan death claim paid to a lender when
a student, on whose behalf a parent received the Federal PLUS loan, dies.
A disability claim is one on which the loan is conditionally discharged due to the total and
permanent disability of the borrower.
If a lender repurchases a loan, which had been previously paid as a death or disability claim by
the agency (that is, the agency paid an invalid claim), subtract the amount of repurchased
principal from this amount. The lender may also repurchase the loan if a borrower reaffirms a
debt previously paid as a disability claim.
AR-11 Closed School/False Certification Claims Paid
Enter the amount of principal paid to lenders for closed school and/or false certification claims.
A closed school claim is one on which a claim is paid to a lender because the student was
unable to complete the program in which the student was enrolled due to the closure of
the institution.
A false certification claim is one on which a claim is paid to a lender because the student’s
eligibility under the FFEL Program was falsely certified by the eligible institution of
higher education.
If a lender repurchases a loan, which had been previously paid as a closed school or a false
certification claim by the agency (that is, the agency paid an invalid claim), subtract the amount
of repurchased principal from this amount.
Also include in this line refund amounts related to unpaid refund, teacher loan forgiveness, and
partial discharges of consolidation loans.
An unpaid refund, in the case of an open or closed school, is a discharge of a former or
current borrower’s (and any endorser’s) obligation to repay that portion of a FFEL loan
(disbursed on or after January 1, 1986) equal to the refund that should have been made
by the school. Include in this amount any accrued interest and other charges associated
with the unpaid refund, which are also discharged.
Teacher loan forgiveness is a discharge of a borrower’s obligation to repay up to $5,000
or up to $17, 500 of their outstanding student loan balances. Forgiveness is available to a
borrower who has no outstanding balance on the date he or she obtains a loan after
October 1, 1998.
A partial discharge of a consolidation loan occurs when a loan was obtained jointly by a
married couple if one of the borrowers dies or becomes totally and permanently disabled.
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The amount of the consolidation loan that is discharged is equal to the portion of the
outstanding balance of the consolidation loan, as of the date the borrower died or
became totally and permanently disabled, attributable to any of that borrower's loans that
would have been eligible for discharge.
In accordance with the unpaid refund, teacher loan forgiveness provisions, and the partial
discharge of consolidation loans provisions, calculate the amount paid to lenders for discharges.
Add to this figure the amount of the reinsurance complement requested by the agency on loans
it holds for which the borrower qualifies for unpaid refund, teacher loan forgiveness discharge,
or partial discharge of a consolidation loan.
AR-12 Loans Paid-In-Full
Enter the original principal amount (net of cancellations) of all loans that have been paid-in-full
or are presumed paid-in-full (e.g., the loan has been in repayment 12 or more years and there has
been no update to the outstanding balance in four (4) years.
For loans that were paid through consolidation, report the sum of the original principal amount
for each individual loan that was discharged. This includes Federal Stafford (both subsidized
and unsubsidized, including Unsubsidized Loans for Middle-Income Borrowers), Federal PLUS
Loans and Federal SLS Loans.
If a Federal Consolidation Loan has been paid-in-full report the original principal amount of the
Federal Consolidation Loan. Underlying loans associated with a Federal Consolidation Loan
should be reported as PIF at the time of consolidation.
Do not include:
loan amounts in a consolidation due to a Federal Consolidation Loan that were
guaranteed by other agencies.
AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans
Enter the principal amounts, net of cancellations, of all Federal Stafford loans and Unsubsidized
Stafford Loans for borrowers who are in school or in their grace period as of the last day of the
reporting year
AR-14 Total Loans in Deferment Prior to First Payment
Enter the original principal amount, net of cancellations, of all FFEL program loans that entered
deferment status before the first payment became due and are in deferment status at the end of
the reporting year.
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Financial Report Introduction
The financial activity reported in the Federal Fund, Operating Fund, and Balance Sheet sections
should reconcile to the amounts reported on the Guarantor’s audited financial statements (accrual basis).
If there are any differences between the net assets on the audited financial statement and the ending
balance as submitted on AR-57, Federal Fund Balance in the Balance Sheet Section, guarantors must
submit a schedule explaining those differences to the Department. These schedules should be sent via email to [email protected]. Data collected will also provide the Department with a basis for:
financial reviews,
validating the current and projected financial status of guaranty agencies,
projecting the impact of changes in revenue, and
managing guaranty agency federal funds held by the agency.
Federal Fund
The activity reported in this section should reconcile to the amounts reported on the Guarantor’s
audited financial statements (accrual basis). Projected yearly estimates are required for line items AR16 through AR-26, with the exception of AR-24, Transfer to Operating Fund for Account
Maintenance Fee. The ending balance should equal the ending balance on AR-57 (Federal Fund
Balance Sheet Section).
AR-15 Beginning Balance (from AR-26 as of 9/30/XX)
Current Year - Report prior FY ending balance, AR-26.
Projected Years - Same as AR-26, Ending Balance for the previous fiscal year.
AR-16 Investment Income
Current Year - Report investment income recognized in the Federal Fund, including net
increase (decrease) in fair value of investments. If the agency is required by state law to combine
FFEL program funds with other state funds for investment purposes, then the agency must
establish a method for allocating a portion of the earnings to the FFEL program and must
maintain documentation on the allocation method.
Do not include:
interest earned on the Restricted Account, it should be reported in item AR-36 Other
Revenue (FFEL and Non-FFEL) and earmarked for default prevention activities.
Interest activity previously reported on AR-49 (Restricted Account Cash, Cash Equivalents and
Investments) should be reported here on AR-16.
Projected Years - Report projected investment income on the Federal Fund.
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AR-17 Reinsurance from ED
Current Year - This line item is pre-populated based on monthly reporting and cannot be changed or modified.
Adjustments or discrepancies to the pre-populated amount should be reported in AR-20, Other
Revenues or AR-25, Other Expenses, as appropriate. The populated amount is the Federal
reinsurance from ED, net of refunds, overpayments and repurchases, for defaults, bankruptcies,
death, disability, closed school, false certification teacher loan forgiveness discharges and unpaid
refunds.
[AR-17] = Amount Due To/(From) Guarantor for [MR-1], Claims Paid + [MR-3],
Status Changes – [MR-5], Repurchases-CFY – [MR-6], Repurchases-PFY –
[MR-7], Partial Refunds-CFY – [MR-8], Partial Refunds-PFY – [MR-9],
Overstated Claims for the fiscal year being reported.
Projected Years - Defaults on loans originated prior to FFY 94 receive maximum 100%
reinsurance. Defaults on loans originated on or after FFY 94 through FFY 98 receive a
maximum 98% reinsurance. And defaults on loans originated on or after FFY 98 receive a
maximum of 95% reinsurance. Multiply line item AR-21 by the weighted reinsurance
“percentage”.
AR-18 Collections of Defaulted Loans – Reinsurance Complement
Current Year - Report the reinsurance complement collected on defaulted loans. This amount
should equal the twelve months reported fiscal year to date (FYTD) on the monthly GAFR,
Line Items MR-10 through MR-13 for the current FFY.
Reinsurance Complement = Total Collected - Secretary’s Share - GA Retention
For comparison and reasonability editing ED will estimate reinsurance complement on MR-10,
Rehabilitated Loans.
Guarantors are required to transfer the complement of the reinsurance rate, which was not
reimbursed by the Department on collections of defaulted loans to the Federal Fund.
Projected Years - Report projected amount of the reinsurance complement from collections on
FFEL loans.
AR-19 Insurance Premiums
Current Year - Report the Federal default fee amount recognized. Effective for loans
guaranteed on or after July 1, 2006, the optional 1 percent insurance premium (guarantee fee) has
been eliminated and replaced by a mandatory Federal default fee. The fee is equal to 1 percent
of the principal amount of loans guaranteed on or after July 1, 2006 – June 30, 2010.
Projected Years - Enter the amount of projected revenue to be recognized.
AR-20 Other Revenues
Current Year - Report other revenues not reported elsewhere in the Federal Fund section.
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Include deferred revenues in this line item. Report itemized entries (description and amount) to
support total reported in this line item. (See Attachment A) Itemized entries may include:
Secretary’s Share on collections, Secretary’s fee on defaulted FFEL and Direct Loan
Consolidation loans (up to 8.5% of collection costs charged the borrower), excess consolidation
proceeds, OIG interest penalty, vehicle sales, audit findings, IRS refund reimbursement; 48 hour
settlement, utilities, and usage fees. These examples are not all inclusive.
Projected Years - Report other projected revenues not reported elsewhere in the Federal Fund
section. Report itemized entries (description and amount) to support total reported in this line
item. (See Attachment A)
AR-21 Claims Expensed to Lenders
Current Year - This line item is pre-populated based on monthly reporting and cannot be changed or modified.
Adjustments or discrepancies to pre-populated amount should be reported in AR-20, Other
Revenues or AR-25, Other Expenses, as appropriate.
[AR-21] = [MR-1-A], Defaults (Other Amounts) + [MR-1-B], Exempt/Lender of Last
Resort + [MR-1-C], Death/Disability + [MR-1-D], Closed School/False
Certification + [MR-1-E], Bankruptcy + [MR-1-F], Unpaid Refunds + [MR1-G], Discharges – [MR-5-A through MR-5-E] Repurchases, CFY, (Principal,
Interest, and Other Amounts) – [MR-6-A through MR-6-E], RepurchasesPFY (Principal, Interest, and Other Amounts) – [MR-7-A through MR-7-E],
Partial Refunds-CFY, (Principal Amount) – [MR-8-A through MR-8-E],
Partial Refunds-PFY, (Principal Amount)
Projected Years - Report projected amount of total claims expensed. Provide methodology for
this estimate.
AR-22 Recall of Federal Funds to the Restricted Account
No reporting required for this line item.
AR-23 Transfer to Operating Fund for Default Aversion
Current Year - Report net Default Aversion expense recognized for delinquent loans for which
agencies receive lender requests for default aversion assistance and for which payment is
authorized under the Department’s regulation and guidance for the current federal fiscal year.
Amount should agree or be reconcilable to line AR-30, Default Aversion Fee Revenue.
Projected Years - Project net Default Aversion expense to be recognized for delinquent loans
for which agencies receive lender requests for default aversion assistance and for which payment
is authorized under the Department’s regulation and guidance for the current federal fiscal year.
Amount should agree or be reconcilable to line AR-30, Default Aversion Fee Revenue.
AR-24 Transfer to Operating Fund for Account Maintenance Fee
Current Year - As applicable, report the transfer amount, regardless of the actual transfer, from
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Guaranty Agency Financial Report (GAFR) Guide
the Federal Fund for account maintenance fee for the current FY. Amount should reconcile to
line AR-33, Transfer from Federal Fund for Account Maintenance Fee.
No reporting required for this line item
AR-25 Other Expenses
Current Year - Report other expenses not reported elsewhere in the Federal Fund section.
Include provision for loan losses (example of calculation provided in AR-56).
Report itemized entries (description and amount) to support total reported in this line
item. (See Attachment A) Itemized entries may include: Secretary’s share on collections,
Secretary’s fee on defaulted FFEL and Direct Loan Consolidation loans (up to 8.5% of
collection costs charged the borrower), excess consolidation proceeds), premium fee
refunds to lenders, early withdrawal counseling fee, GA portion of $250M recall, refund
of insurance premiums, depreciation, IRS tax offset, and prior year accruals.
Projected Years - Report other projected expenses not reported elsewhere in the Federal Fund
section. Report itemized entries (description and amount) to support total reported in this line
item. (See Attachment A)
AR-26 Ending Balance
Current Year - The ending balance must equal the sum of AR-15 through AR-20 minus AR-21
through AR-25 as well as the ending balance on AR-57 (Federal Fund Balance Sheet Section).
[AR-26] = [AR-15] + [AR-16] + [AR-17] + [AR-18] + [AR-19] + [AR-20] –
[AR-21] – [AR-22] – [AR-23] – [AR-24] – [AR-25]
[AR-26] = [AR-57]
Projected Years - The projected ending balance must equal the sum of AR-15 through AR-20
minus AR-21 through AR-25
Supplemental Information
AR-27 Amount transferred from Federal Fund to Operating Fund for
Operating Expenses (Repayable)
No reporting required for this line item. .
AR-28 Amount received from Operating Fund to Repay Advance for
Operating Expenses
No reporting required for this line item.
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Guaranty Agency Financial Report (GAFR) Guide
Operating Fund
The activity reported in this section should reconcile to the amounts reported on the Guarantor’s
audited financial statements on an accrual basis. Projections are required for line items AR-29
thorough AR-40, except AR-33 and AR-40.
AR-29 Beginning Balance (from 9/30/XX)
Current Year - Report prior FFY ending balance, AR-40.
Projected Years - Same as AR-40, Ending Balance for the previous fiscal year.
AR-30 Default Aversion Fee Revenue
Current Year - Report DAF revenue recognized for delinquent loans for which agencies receive
lender requests for default aversion assistance and for which payment is authorized by
Department’s regulations and guidance. Amount should reconcile to line AR-23, Transfer to
Operating Fund for Default Aversion.
Projected Years - Report projected DAF revenue to be recognized for delinquent loans for
which agencies receive lender requests for assistance and for which payment is authorized by the
Department’s regulations and guidance. Amount should reconcile to line AR-23, Transfer to
Operating Fund for Default Aversion.
AR-31 Loan Processing and Issuance Fee Revenue
Current Year - Report loan processing and issuance fee revenue recognized.
Projected Years - No reporting required for this line item.
AR-32 Account Maintenance Fee Revenue Received from ED
Current Year - Report account maintenance fees recognized from the Department.
Projected Years - Report projected account maintenance fees to be recognized from the
Department.
AR-33 Transfer from Federal Fund for Account Maintenance Fee
Current Year - Report account maintenance fees recognized subject to Federal Fund settlement
(AR-24, Transfer to Operating Fund for Account Maintenance Fee) when amount exceeds ED’s
budgetary cap. No reporting required for this line item.
AR-34 Collections of Defaulted Loans less Reinsurance Complement (GA
Collection Retention)
Current Year -This line item is pre-populated based on monthly reporting and cannot be changed or
modified. Adjustments or discrepancies to the pre-populated amount should be reported in
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AR-36, Other Revenues (FFEL and Non FFEL) or AR-39, Other Expenditures (FFEL and
Non FFEL), as appropriate. The populated amount is collection revenue recognized from
payments to the guaranty agency by defaulted borrowers.
[AR-34] = [MR-10-A], Rehabilitated Loans (Principal Amount) + [MR-11-B], FFEL
Consolidation (Other Amount) + [MR-12-B], AWG (Principal, Interest,
and Other Amounts) + [MR-13-B], Default Collections (Principal,
Interest, and Other)
Projected Years - Report projected collection revenue recognized from payments to guaranty
agency by defaulted borrowers. Amount reported should be your agency share of collections.
Include:
receipts from rehabilitated loan sales and consolidation of defaulted loans under the
FFEL program.
Do not include:
AR-18 (Reinsurance Complement).
AR-35 Investment Income
Current Year - Enter the amount of all investment income recognized in the Operating Fund
including net increase (decrease) in fair value of investments
Do not include:
interest earned on the Restricted Account, it should be reported in item AR-36, Other
Revenue (FFEL and non-FFEL).
Projected Years - Report projected earnings on the Operating Fund investments.
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AR-36 Other Revenue (FFEL and Non-FFEL)
Current Year Report other revenue, FFEL and non-FFEL, not reported elsewhere in the
Operating Fund section.
Include:
interest earned on the interest that was transferred from the Restricted Account
payments received to consolidate loans under the Direct Loan Program, net of the
Secretary’s fee
collection costs received from the Department on rehabilitated loansales under the
Rehabilitated Loan Purchase Program
interest and collection costs received on rehab loans sold to lenders
Report itemized entries (description and amount) to support the total reported in this line item.
(See Attachment B) In addition to the above mentioned items, itemized entries may include:
service income, default aversion, and VFA revenue.
Project Year - Report other projected revenues, FFEL and non-FFEL, not reported elsewhere
in the Operating Fund section. This amount will include interest earned on the interest that was
transferred from the Restricted Account and payments received to consolidate under the Direct
Loan Program, net of Secretary’s fee. Report projected itemized entries (description and
amount) to support the total reported in this line item. (See Attachment B)
AR-37 Collections of Defaulted Loans (Secretary Equitable Share)
No reporting required for this line item due to the 48-hour rule. Secretary’s Equitable Share
should be reported in AR-25, Other Expenses.
AR-38 Operating Expenses
Current Year - Report expenses associated with guaranty agency related activities, including
application processing, loan disbursement, enrollment and repayment status management,
default aversion activities, default collection activities, school and lender training, financial aid
awareness and related outreach activities, and compliance monitoring.
Projected Years - Projected expenses associated with guaranty agency related application
processing, loan disbursement, enrollment and repayment status management, default aversion
activities, default collection activities, school and lender training, financial aid awareness and
related outreach activities, and compliance monitoring.
AR-39 Other Expenditures (FFEL and Non-FFEL)
Current Year - Report other expenses, FFEL and Non-FFEL, not reported elsewhere in the
Operating Fund section. This will include amounts used for default prevention activities and the
discount portion of discounted rehabilitated loan sales. Report itemized entries (description and
amount) to support total reported in this line item. (See Attachment B) Itemized entries may
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Guaranty Agency Financial Report (GAFR) Guide
include: 48-hour rule, administration costs, transfers to federal fund, OIG audit liabilities, and
rehab premiums.
Project Year - Report other projected expenses, FFEL and Non-FFEL, not reported elsewhere
in the Operating Fund section. This will include amounts used for default prevention activities.
Report projected itemized entries (description and amount) to support total reported in this line
item. (See Attachment B)
AR-40 Ending Balance
Current Year - The ending balance must equal the sum of AR-29 through AR-36 minus AR-37
through AR-39 = AR-40.
[AR-40] = [AR-29] + [AR-30] + [AR-31] + [AR-32] + [AR-33] + [AR-34] +
[AR-35] + [AR-36] – [AR-37] – [AR-38] – [AR-39]
Projected Years - The projected ending balance must equal the sum of AR-29 through AR-36
minus AR-37 through AR-39 = AR-40.
Supplemental Information
AR-41 Amount Received from Federal Fund for Operating Expenses
(Repayable)
No reporting required for this line item.
AR-42 Amount Repaid to Federal Fund for Operating Expenses
No reporting required for this line item
Restricted Account
This section reported on all revenues and expenses of the restricted account that was created to
retain the recall amounts required by Section 422(h) of the HEA. This section is no longer required.
AR-43 Beginning Balance (from 9/30/XX)
No reporting required for this line item.
AR-44 Recall of Federal Funds from Federal Fund
No reporting required for this line item.
AR-45 Investment Income on Restricted Account
No reporting required for this line item. Amounts previously reported here for interest earned
on the Restricted Account is now reported in AR-25, Other Expenses.
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Guaranty Agency Financial Report (GAFR) Guide
AR-46 Investment Income on Restricted Account Expensed for Default
Prevention
No reporting required for this line item. Amounts previously reported here for earnings from
the Restricted Reserve Account expensed for activities to reduce student loan defaults is now
reported in AR-39, Other Expenditures.
AR-47 Ending Balance
No reporting required for this line item.
Balance Sheet Section (Federal Fund)
The balances reported in this section should reconcile to amounts reported on the Guarantor’s
audited financial statements Balance Sheet as of the end of the Federal fiscal year 9/30/XX. The
ending balance AR-57 in this section should equal the ending balance on AR-26 (Federal Fund
Activity Section). All reporting should be on an accrual basis and in accordance with GAAP.
AR-48 Cash, Cash Equivalents and Investments
Report cash, cash equivalents and investment (regardless of maturity date of investments)
balances. If applicable, report your Voluntary Flexible Agreement (VFA) escrow balance in this
line item.
AR-49 Restricted Account Cash, Cash Equivalents and Investments
No reporting required for this line item. Do not report escrow balances in this line item.
AR-50 Net Investment in Property, Plant, Equipment and Inventory
Report balances of property, plant, and equipment less accumulated depreciation.
AR-51 Accounts Receivable from the ED
Report balances owed to the Federal Fund by ED (i.e., reinsurance and other payments).
AR-52 Other Assets
Report total balances of other current and non-current asset accounts that were not reported in
line items AR-48 through AR-51. Report itemized entries (description, long-term or short-term,
and amount) to support total reported in this line item. (See Attachment C) Short-term
itemized entries may include: guarantee fee receivable, receivable from Operating Fund, and
default aversion fee rebate.
AR-53 Accounts Payable, Accrued Expenses, and Other Current Liabilities
Report liabilities for expenses due, other than to ED, including amounts due Operating Fund
and claim payments payable to lenders, if amount is to be paid within 12 months. Report longRevised: September 2015
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Guaranty Agency Financial Report (GAFR) Guide
term portion in AR-55 (Other Liabilities).
AR-54 Accounts Payable to ED
Report other liabilities for expenses due to ED within the next 12 months.
AR-55 Other Liabilities
Report other liabilities that are not reported in other line items, including outstanding federal
advances due to ED, and the remaining reserve return obligation, to be paid more than 12
months from current date (i.e., recall for FY 06 and FY 07). Report short-term Liabilities in AR53, Accounts Payable, Accrued Expenses and Current Liabilities
AR-56 Allowances and Other Non-Cash Charges to Federal Fund
Report allowances, such as deferred (unearned) Federal default fees, as well as other obligations
of the Federal Fund. Report itemized entries (description and amount) to support the total
reported in this line item (See Attachment C). Loan Loss Provision must also be reported in
AR-25 (See page 82). Loan Loss Provision is calculated as follows:
Loan Loss Provision = Original Principal Outstanding (OPO) x Current Year Default Trigger
Rate without the rehabilitation credit x 3% - Current Year +1 portion
of AR-18
OPO = [AR-1] – [AR-2] + [AR-3] – [AR-4] – [AR-5] + [AR-6] – [AR-7] – [AR-8] – [AR9] – [AR-10] – [AR-11] – [AR-12]
Current Year Default Trigger Rate without the rehabilitation credit = ([MR-1A]
Principal sum for 12 months of the current year – [MR-7A] Principal sum for the 12
months of the current year)) / Prior Year’s LIR
Prior Year’s LIR = [AR-1] – [AR-2] + [AR-3] – [AR-4] – [AR-5] + [AR-6] – [AR-7]
– [AR-8] – [AR-9] – [AR-10] – [AR-11] – [AR-12] – [AR-13] –
[AR-14]
NOTE: If the Loan Loss Provision calculation results in a negative
number, then report $0 as the Loan Loss Provision.
AR-57 Federal Fund Balance
The Federal Fund balance on an accrual basis for the fiscal year being reported is calculated by
adding line items AR-48 through AR-52 and subtracting line items AR-53 through AR-56. This
amount should represent the equity on the audited balance sheet section of the Federal Fund.
AR-57 must equal AR-26.
[AR-57] = [AR-48] + [AR-49] + [AR-50] + [AR-51] + [AR-52] – [AR-53] –
[AR-54] – [AR-55] – [AR-56]
[AR-57] = [AR-26]
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Guaranty Agency Financial Report (GAFR) Guide
ATTACHMENT A – Federal Fund Itemized Schedule
FEDERAL FUND
SCHEDULE OF ITEMIZED LINE ITEMS
ITEM
NO.
CATEGORY
AR-20
OTHER REVENUES:
AR-25
OTHER EXPENSES:
Revised: September 2015
AMT./
CY
ACTUAL
CY + 1
PROJ.
CY +2
PROJ.
CY +3
PROJ.
Page 89 of 93
CY + 4
PROJ.
CY + 5
PROJ.
EXPLANATION
Guaranty Agency Financial Report (GAFR) Guide
ATTACHMENT B – Operating Fund Itemized Schedule
OPERATING FUND
SCHEDULE OF ITEMIZED LINE ITEMS
ITEM
NO.
AR-36
CATEGORY
AMT./
CY
ACTUAL
CY + 1
PROJ.
CY +2
PROJ.
CY +3
PROJ.
OTHER REVENUES:
FFEL:
NON-FFEL:
AR-39
OTHER
EXPENDITURES:
FFEL:
NON-FFEL:
1. Other Student Financial
Aid related expenditures for
the benefit of students
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CY +4
PROJ.
CY + 5
PROJ.
EXPLANATION
Guaranty Agency Financial Report (GAFR) Guide
ATTACHMENT C – Balance Sheet Section Itemized Schedule
BALANCE SHEET SECTION (Federal Fund)
SCHEDULE OF ITEMIZED LINE ITEMS
ITEM
NO.
CATEGORY
AR-52
OTHER ASSETS:
AR-56
ALLOWANCES AND
OTHER NON-CASH
CHARGES TO FEDERAL
FUND:
Revised: September 2015
AMT./
CY
ACTUAL
CY + 1
PROJ.
CY +2
PROJ.
CY +3
PROJ.
Page 91 of 93
CY + 4
PROJ.
CY + 5
PROJ.
EXPLANATION
Guaranty Agency Financial Report (GAFR) Guide
ATTACHMENT D – Guaranty Agency List
GUARANTY AGENCY LIST
Below are two lists of guaranty agencies (GAs). The first is a list of the GAs that currently or
previously received payments from ED under the Federal Family Education Loan Program. The second
is a list of those GAs that no longer issue loan guarantees or have closed or merged with other agencies.
The lists are in numerical order by GA code.
Included for each guaranty agency (GA) is its GA code, GA state name, GA abbreviation, and full
legal name. For brevity and automatic data processing purposes, ED refers to a guaranty agency by a
three-digit code (GA code) or by the name of the principal state in which it does business (GA state
name). ED sometimes also refers to a guaranty agency by a two-letter abbreviation (GA abbreviation)
based on the GA state name.
Active Guaranty Agencies
GA
CODE
708
712
717
721
722
723
725
726
729
730
731
733
734
735
736
737
738
740
742
744
745
747
748
749
750
753
755
800
927
951
GA STATE NAME
GA ABBREVIATION
Colorado
Florida
Illinois
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Missouri
Montana
Nebraska (II) *
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Oklahoma
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas (II) *
Utah
Vermont
Washington
Wisconsin
USA Funds
Minnesota
Minnesota
CO
FL
IL
KY
LA
ME
MA
MI
MO
MT
NE
NH
NJ
NM
NY
NC
ND
OK
PA
RI
SC
TN
TX
UT
VT
WA
WI
UF
MB
MV
LEGAL NAME
Colorado College Access Network
Florida Student Financial Assistance Foundation
Illinois Student Assistance Commission
Kentucky Higher Education Assistance Authority
Louisiana Office of Student Financial Assistance
Finance Authority of Maine
Massachusetts Higher Education Assistance Corporation
Michigan Higher Education Assistance Authority
Coordinating Board for Higher Education
Guarantee Student Loan Program
Nebraska Student Loan Program
New Hampshire Higher Education Assistance Foundation
New Jersey Higher Education Assistance Authority
Student Loan Guarantee Corporation
New York State Higher Education Services Corporation
North Carolina State Education Assistance Authority
North Dakota Guaranteed Student Loan Program
Oklahoma Guaranteed Student Loan Program
Pennsylvania Higher Education Assistance Agency
Rhode Island Higher Education Assistance Authority
South Carolina Loan Corporation
Tennessee Student Assistance Corporation
Texas Guaranteed Student Loan Corporation
Utah Higher Education Assistance Authority
Vermont Student Assistance Corporation
Northwest Education Loan Association
Great Lakes Higher Education Corporation
United Student Aid Funds, Inc.
Educational Credit Management Corporation I
Educational Credit Management Corporation II
* The Roman numerals in parentheses in some GA’s state names are used to distinguish between guaranty agencies in states which have more than one guaranty agency involved in the Federal Family Education Loan
Program. The numerals are assigned from low to high in the order in which the guaranty agencies signed insurance agreements with the Secretary of Education.
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Guaranty Agency Financial Report (GAFR) Guide
Guaranty Agencies That No Longer Guarantee Loans Or Have Closed Or
Merged With Other Guaranty Agencies
GA
CODE
611
620
627
631
654
656
701
706
705
709
710
711
713
716
718
719
724
727
728
739
741
746
751
772
778
804
815
948
GA STATE NAME
District of Columbia (II) *
Kansas
Minnesota (I) *
Nebraska (I) *
West Virginia
Wyoming
Alabama
California
Arkansas
Connecticut
Delaware
District of Columbia (I) *
Georgia
Idaho
Indiana
Iowa
Maryland
Minnesota (II) *
Mississippi
Ohio
Oregon
South Dakota
Virginia
Puerto Rico
Virgin Islands
Arizona
Hawaii
Texas (I) *
GA
ABBREVIATION
DC
KS
MN
NB
WV
WY
AL
CA
AR
CT
DE
DG
GA
ID
IN
IA
MD
MM
MS
OH
OR
SD
VA
PR
VI
AZ
HI
TC
LEGAL NAME
Higher Education Assistance Foundation - District of Columbia Region
Higher Education Assistance Foundation - Kansas Region
Higher Education Assistance Foundation
Higher Education Assistance Foundation - Nebraska Region
Higher Education Assistance Foundation - West Virginia Region
Higher Education Assistance Foundation - Wyoming Region
Alabama Commission on Higher Education
Education Credit Management Corporation – California
Student Loan Guarantee Foundation of Arkansas
Connecticut Student Loan Foundation
Delaware Postsecondary Education Commission
District of Columbia Student Loan Insurance Program
Georgia Higher Education Assistance Corporation
Student Loan Fund of Idaho, Inc.
State Student Assistance Commission of Indiana
Iowa College Aid Commission
Maryland Higher Education Loan Corporation
Norstar Guarantee, Inc.
Mississippi Guaranteed Student Loan Agency
Ohio Student Loan Commission
Oregon State Scholarship Commission
Education Assistance Corporation
Virginia State Education Assistance Authority
Puerto Rico Higher Education Assistance Corporation
Virgin Islands Joint Boards of Education
Arizona Education Loan Program
Hawaii Education Loan Program
Texas Higher Education Coordinating Board
* The Roman numerals in parentheses in some GA’s state names are used to distinguish between guaranty agencies in states which have more than one guaranty agency involved in the Federal Family Education Loan
Program. The numerals are assigned from low to high in the order in which the guaranty agencies signed insurance agreements with the Secretary of Education.
Revised: September 2015
Page 93 of 93
| File Type | application/pdf |
| File Title | GAFR Instruction Manual |
| Author | FSA Finance |
| File Modified | 2016-06-14 |
| File Created | 2015-09-10 |