Guaranty Agency Financial Report - Not-for-Profit Agencies

Guaranty Agency Financial Report

GAFRGuide090417

Guaranty Agency Financial Report - Not-for-Profit Agencies

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Guaranty Agency Financial
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2000

Instruction Guide
Revised: September 2017

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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]	
Revised:	September	2017	

	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

Table of Contents
INTRODUCTION .................................................................................................................................. 10
CERTIFICATION .................................................................................................................................. 11
DEFINITIONS ........................................................................................................................................ 12
CHAPTER 1: GUARANTY AGENCY FINANCIAL REPORT MONTHLY.......................................... 13
Reinsurance, Trigger Figure and Collections ......................................................................................... 14
Financial Processing ............................................................................................................................... 17
For Fiscal Month Of Reporting ............................................................................................................... 19
MR – 1 Claims Paid ........................................................................................................................... 20
MR 1 Claims Paid - Amount Due To/ (From) Guarantor ............................................................... 22
MR-1-A Defaults - Principal Amount ............................................................................................ 22
MR-1-A Defaults - Other Amounts ................................................................................................ 22
MR-1-B Exempt/Lender-of-last-resort- Principal Amount ............................................................ 23
MR-1-C Death/Disability - Principal Amount ................................................................................ 24
MR-1-D Closed School/False Certification - Principal Amount .................................................... 24
MR-1-E Bankruptcy - Principal Amount ........................................................................................ 25
MR-1-F Unpaid Refunds - Principal Amount................................................................................. 25
MR-1-G Discharges ........................................................................................................................ 26
MR-2 Borrower Payment Return (Closed School/False Certification) .............................................. 27
MR-2 Borrower Payment Return – Amount Due To/ (FROM) Guarantor..................................... 28
MR-2 Borrower Payment Return - Principal Amount .................................................................... 28
MR-2 Borrower Payment Return - Accrued Interest ...................................................................... 28
MR-3 Status Changes ......................................................................................................................... 28
MR-3 Status Changes - Amount Due To/ (From) Guarantor ......................................................... 29
MR-3-A Death/Disability - Principal and Interest .......................................................................... 30
MR-3-B Closed School/False Certification - Principal and Interest ............................................... 30
MR-3-C Bankruptcy - Principal and Interest .................................................................................. 30
MR-4 TOP Overpayments ................................................................................................................. 31
MR-4 TOP Overpayments - Amount Due To/ (From) Guarantor .................................................. 31
MR-4 TOP Overpayments – Principal ............................................................................................ 31
MR-4 TOP Overpayments – Interest Amount ................................................................................ 32
MR-4 TOP Overpayments – Other Amounts.................................................................................. 32
MR-5 Repurchases - Current Fiscal Year (CFY) ............................................................................... 32
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MR-5 Repurchases - CFY - Amount Due To/ (From) Guarantor ................................................... 33
MR-5 Repurchases - CFY - Principal Amount ............................................................................... 34
MR-5 Repurchases - CFY - Accrued Interest Due ED ................................................................... 35
MR-5 Repurchases - CFY – Other Amounts .................................................................................. 35
MR-5-A Repurchases - CFY – Defaults ......................................................................................... 35
MR-5-B Repurchases - CFY - Exempt /Lender-Of-Last-Resort .................................................... 36
MR-5-C Repurchases - CFY – Death/Disability ............................................................................ 36
MR-5-D Repurchases - CFY - Closed School/False Certification ................................................. 36
MR-5-E Repurchases - CFY - Bankruptcy (Chapter 7, 11, 12 and 13) .......................................... 37
MR-6 Repurchases for Reinsurance Claims Paid in Prior Fiscal Year .............................................. 38
MR-6 Repurchases - PFY - Amount Due To/ (From) Guarantor ................................................... 38
MR-7 Partial Refunds - Current Fiscal Year (CFY) .......................................................................... 38
MR-7 Partial Refunds - CFY - Amount Due To/ (From) Guarantor .............................................. 39
MR-7-B Partial Refunds - CFY – Exempt/Lender-of-Last-Resort ................................................. 40
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)........................................................................... 41
MR-8 Partial Refunds - PFY, Amount Due To/ (From) Guarantor ................................................ 41
MR- 9 Overstated Claims ................................................................................................................... 41
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 ............................................................................... 42
MR-9-D Overstated Claims - Closed School/False Certification ................................................... 42
MR-9-E Overstated Claims – Bankruptcy ...................................................................................... 42
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) ............................................... 44
MR-10-A Rehabilitated Loans – Interest ........................................................................................ 45
MR-10-A Rehabilitated Loans - Other Charges ............................................................................. 45
MR-11 FFEL Consolidation Refund .................................................................................................. 45
MR-11 FFEL Consolidation Refund - Amount Due To/ (From) Guarantor................................... 45
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MR-11 FFEL Consolidation Refund - Principal Amount ............................................................... 45
MR-11 FFEL Consolidation Refund - Interest Amount ................................................................. 45
MR-11 FFEL Consolidation Refund – Other Amount ................................................................... 45
MR-11-A FFEL Consolidation Payoff – Principal Amount ........................................................... 45
MR-11-A FFEL Consolidation Payoff – Interest Amount ............................................................. 46
MR-11-B FFEL Consolidation GA Retention – Principal Amount................................................ 46
MR-11-B FFEL Consolidation GA Retention - Interest Amount ................................................... 46
MR-11-B FFEL Consolidation GA Retention - Other Amount...................................................... 46
MR-12 GA Administrative Wage Garnishment ................................................................................. 46
MR-12 Administrative Wage Garnishment - Amount Due To/ (From) Guarantor ........................ 47
MR-12 Administrative Wage Garnishment – Principal Amount .................................................... 48
MR-12 Administrative Wage Garnishment – Interest Amount ...................................................... 48
MR-12 Administrative Wage Garnishment – Other Amount ......................................................... 48
MR-12-A Administrative Wage Garnishment –Total Collected – Principal .................................. 48
MR-12-A Administrative Wage Garnishment –Total Collected – Interest .................................... 49
MR-12-A Administrative Wage Garnishment –Total Collected – Other ....................................... 49
MR-12-B Administrative Wage Garnishment – GA Retention – Principal.................................... 49
MR-12-B Administrative Wage Garnishment – GA Retention – Interest ...................................... 49
MR-12-B Administrative Wage Garnishment – GA Retention – Other ......................................... 49
MR-13 Default Collections ................................................................................................................ 50
MR-13 Default Collections - Amount Due To/ (From) Guarantor ................................................. 50
MR-13 Default Collections – Principal Amount ............................................................................ 51
MR-13 Default Collections – Interest Amount ............................................................................... 51
MR-13 Default Collections – Other Amount .................................................................................. 51
MR-13-A Default Collections –Total Collected – Principal........................................................... 52
MR-13-A Default Collections –Total Collected – Interest ............................................................. 52
MR-13-A Default Collections –Total Collected – Other ................................................................ 52
MR-13-B Default Collections – GA Retention – Principal ............................................................ 52
MR-13-B Default Collections – GA Retention – Interest ............................................................... 52
MR-13-B Default Collections – GA Retention – Other.................................................................. 52
MR-14 Bankruptcy Collections ......................................................................................................... 52
MR-14 Bankruptcy Collections - Amount Due To/ (From) Guarantor .......................................... 53
MR-14 Bankruptcy Collections – Principal Amount ...................................................................... 53

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MR-14 Bankruptcy Collections – Interest Amount ........................................................................ 54
MR-14 Bankruptcy Collections – Other Amount ........................................................................... 54
MR-15 Default FFEL Consolidated by DL Fee – Amount Due To/ (From) Guarantor .................... 54
MR-16 Total ....................................................................................................................................... 54
NON-PAYMENT ACTIVITY (Accounting Data) ................................................................................. 54
Treasury Offset Program (TOP) ............................................................................................................. 55
Principal Amounts Column............................................................................................................. 56
Interest Amounts Column ............................................................................................................... 56
Other Amounts Column .................................................................................................................. 56
MR-17 Treasury Offset ................................................................................................................... 56
MR-18 Non-Federal Share Offset ................................................................................................... 56
MR-19 Treasury Offset Reversals .................................................................................................. 57
Status Changes - Account Balance at Conversion .................................................................................. 57
Account Balance at Conversion – Principal Amounts Column ...................................................... 57
Account Balance At Conversion - Interest Amounts Column ........................................................ 58
Account Balance At Conversion - Other Amounts Column ........................................................... 58
MR-20 Default/LLR to Death and Disability ................................................................................. 58
MR-21 Default/LLR to Closed School/False Certification............................................................. 58
MR-22 Default/LLR to Bankruptcy ................................................................................................ 58
MR-23 Bankruptcy to Default/LLR ................................................................................................ 59
Agency Accruals (Accounting Entries) .................................................................................................. 59
Principal Amounts Column............................................................................................................. 60
Interest Amounts Column ............................................................................................................... 60
Other Amounts Column .................................................................................................................. 60
MR-24 Collection Terminations ..................................................................................................... 60
MR-25 Compromises ...................................................................................................................... 60
MR-26 Agency’s Accruals.............................................................................................................. 61
CHAPTER 2: GUARANTY AGENCY FINANCIAL REPORT MONTHLY/QUARTERLY ................ 62
Agency Accruals (Information) .............................................................................................................. 62
Principal Amounts Column............................................................................................................. 62
Interest Amounts Column ............................................................................................................... 62
Other Amounts Column .................................................................................................................. 63
MR-27 Default FFELP Loans Consolidated By Direct Loan Program .......................................... 63

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MR-28 Subrogated Loans ............................................................................................................... 63
MR-29 Default Loans Transferred Out ........................................................................................... 63
MR-30 Default Loans Transferred In ............................................................................................. 63
MR-31 Other Transactions Affecting Federal Receivable.............................................................. 63
MR-32 Ending Balance of Defaulted Loans ................................................................................... 64
Delinquency by Debt .............................................................................................................................. 67
MR-33 Not Delinquent ................................................................................................................... 67
MR-34 (1 – 90 Days) through MR-40 Over 10 Years .................................................................... 67
Bankruptcy Reporting ............................................................................................................................. 68
MR-41 Ending Balance on Bankruptcies........................................................................................ 68
MR-42 Bankruptcies Transferred Out ............................................................................................ 68
CHAPTER 3: GUARANTY AGENCY FINANCIAL REPORT ANNUAL ............................................. 69
Loans in Repayment (LIR) ..................................................................................................................... 70
AR- 1 Loans Guaranteed (Except Federal Consolidation) ............................................................. 70
AR- 2 All Loans Canceled (Except Federal Consolidation) ........................................................... 70
AR- 3 Federal Consolidation Loans Guaranteed ............................................................................ 71
AR- 4 Federal Consolidation All Loans Canceled .......................................................................... 71
AR- 5 Uninsured Loans .................................................................................................................. 71
AR- 6 Loans Transferred In ............................................................................................................ 71
AR- 7 Loans Transferred Out ......................................................................................................... 72
AR- 8 Default Claims Paid ............................................................................................................. 72
AR- 9 Bankruptcy Claims Paid ....................................................................................................... 73
AR-10 Death and Disability Claims Paid ....................................................................................... 73
AR-11 Closed School/False Certification Claims Paid .................................................................. 74
AR-12 Loans Paid-In-Full .............................................................................................................. 75
AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans ................................................ 75
AR-14 Total Loans in Deferment Prior to First Payment ............................................................... 75
Financial Report Introduction ................................................................................................................. 76
Federal Fund ........................................................................................................................................... 76
AR-15 Beginning Balance (from AR-26 as of 9/30/XX) ............................................................... 76
AR-16 Investment Income .............................................................................................................. 76
AR-17 Reinsurance from ED .......................................................................................................... 77
AR-18 Collections of Defaulted Loans – Reinsurance Complement ............................................. 77

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AR-19 Insurance Premiums ............................................................................................................ 77
AR-20 Other Revenues ................................................................................................................... 78
AR-21 Claims Expensed to Lenders ............................................................................................... 78
AR-22 Recall of Federal Funds to the Restricted Account ............................................................. 78
AR-23 Transfer to Operating Fund for Default Aversion ............................................................... 78
AR-24 Transfer to Operating Fund for Account Maintenance Fee Error! Bookmark not defined.
AR-33, Transfer from Federal Fund for Account Maintenance Fee. ............. Error! Bookmark not
defined.
AR-25 Other Expenses.................................................................................................................... 79
AR-26 Ending Balance ................................................................................................................... 79
Supplemental Information....................................................................................................................... 79
AR-27 Amount transferred from Federal Fund to Operating Fund for Operating Expenses
(Repayable) ..................................................................................................................................... 79
AR-28 Amount received from Operating Fund to Repay Advance for Operating Expenses ......... 80
Operating Fund ....................................................................................................................................... 80
AR-29 Beginning Balance (from 9/30/XX) .................................................................................... 80
AR-30 Default Aversion Fee Revenue ........................................................................................... 80
AR-31 Loan Processing and Issuance Fee Revenue ....................................................................... 80
AR-32 Account Maintenance Fee Revenue Received from ED ..................................................... 80
AR-33 Transfer from Federal Fund for Account Maintenance Fee ................................................ 81
AR-34 Collections of Defaulted Loans less Reinsurance Complement (GA Collection Retention)
........................................................................................................................................................ 81
AR-35 Investment Income .............................................................................................................. 81
AR-36 Other Revenue (FFEL and Non-FFEL) .............................................................................. 82
AR-37 Collections of Defaulted Loans (Secretary Equitable Share) .............................................. 82
AR-38 Operating Expenses ............................................................................................................. 82
AR-39 Other Expenditures (FFEL and Non-FFEL) ....................................................................... 82
AR-40 Ending Balance ................................................................................................................... 83
Supplemental Information....................................................................................................................... 83
AR-41 Amount Received from Federal Fund for Operating Expenses (Repayable) ...................... 83
AR-42 Amount Repaid to Federal Fund for Operating Expenses .................................................. 83
Restricted Account .................................................................................................................................. 83
AR-43 Beginning Balance (from 9/30/XX) .................................................................................... 83
AR-44 Recall of Federal Funds from Federal Fund........................................................................ 84

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AR-45 Investment Income on Restricted Account ......................................................................... 84
AR-46 Investment Income on Restricted Account Expensed for Default Prevention .................... 84
AR-47 Ending Balance ................................................................................................................... 84
Balance Sheet Section (Federal Fund) .................................................................................................... 84
AR-48 Cash, Cash Equivalents and Investments ............................................................................ 84
AR-49 Restricted Account Cash, Cash Equivalents and Investments ............................................ 84
AR-50 Net Investment in Property, Plant, Equipment and Inventory ............................................ 84
AR-51 Accounts Receivable from the ED ...................................................................................... 85
AR-52 Other Assets ........................................................................................................................ 85
AR-53 Accounts Payable, Accrued Expenses, and Other Current Liabilities ................................ 85
AR-54 Accounts Payable to ED...................................................................................................... 85
AR-55 Other Liabilities .................................................................................................................. 85
AR-56 Allowances and Other Non-Cash Charges to Federal Fund................................................ 85
AR-57 Federal Fund Balance .......................................................................................................... 86
ATTACHMENT A – Federal Fund Itemized Schedule ......................................................................... 87
ATTACHMENT B – Operating Fund Itemized Schedule ...................................................................... 88
ATTACHMENT C – Balance Sheet Section Itemized Schedule ........................................................... 89
ATTACHMENT D – Guaranty Agency List .......................................................................................... 90
	
		
	

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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)	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	
	
 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	
	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	


For	a	complete	listing	of	FSA	communications:	including	FSA	Bulletins	and	Dear	Colleague	
Letters	go	to:	https://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.		The	Department	requires	that	a	guaranty	agency	seek	formal	approval	for	any	
decision(s)	where	the	agency	plans	to	deviate	from	procedures	outlined	in	this	guide.		The	request	
is	to	include	a	statement	establishing	the	basis	of	the	request	and	the	potential	impacts	to	
regulatory	compliance	and	financial	reporting.	
	

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	https://fp.ed.gov/fms.html.		
	
Original	signature	documents	should	be	mailed	to:	
	
Federal	Student	Aid	Finance	Office	
Accounting	Operations	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	converted	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	includes	
guaranty	agency	claim	interest	which				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	the	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	principal.	
	
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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CHAPTER 1: GUARANTY AGENCY
FINANCIAL REPORT MONTHLY
	

Guaranty	agencies	submit	a	monthly	report	to	ED	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:	https://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	implemented	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	available	via	www.fp.ed.gov.	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	that	the	guarantor	report	summary	information	on	all	claims,	
collections,	and	related	activity	for	a	given	month.	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.		Funds	owed	to	
ED	is	payable	immediately.	
	
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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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

Reinsurance, Trigger Figure and Collections
	

	
	

FFEL	Program	loans	originated	by	an	eligible	lender	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	based	on	
the	chart	below::		
	
The	Consolidated	Appropriations	Act,	2016,	Pub.	L.	114‐113,	signed	on	December	18,	2015	
changed	the	maximum	reinsurance	percentage	for	guaranty	agencies	in	the	FFEL	program.			The	Act	
changes	the	ED	to	GA	reimbursement			to	100%.		Beginning	with	the	December	2015	GAFR,	
guaranty	agencies	were	able	to	request	reinsurance	at	the	higher	rate	for	new	default	claims.		
Supplemental	claim	requests	by	lenders	on	previously	paid	default	claims	will	be	reimbursed	at	the	
rate	in	effect	at	the	time	reinsurance	was	paid	and	are	not	eligible	for	the	100%	rate.			
	
	
	

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)	

Loan	
Amount/	
Claim	
Amount	

$1,000.00
$1,000.00

Reimbursemen
t	Rate	(GA	to	
Lender)	

100%	
		98%

Reimburs
ement	
Amount	
to	Lender	

Reimbursemen
t	Rate	(ED	to	
GA)	

	

Reimburseme
nt	Amount	to	
GA	

$1,000.00

100%	

$1,000.00

$980.00

100%	

$980.00

$1,000.00

98%	

$980.00

100%	

$980.00

$1,000.00

97%	

$970.00

100%	

$970.00

$1,000.00

98%	

$980.00

100%	

$980.00

$1,000.00

100%	

$1,000.00

100%	

$1,000.00

	
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)	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	




	

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	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	there	on.	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.	
	
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;		
	
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;	
	
These	reduced	rates	are	generally	referred	to	as	“reduced	reimbursement	rates.”	The	difference	
between	the	default	claim	amount	paid	to	the	lender	and	the	reinsurance	amount	paid	to	GA	at	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	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	allowed	to	retain	16%	of	the	amount	collected.			
	
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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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
Trigger	figure	calculation	formula:	
	
$683,877,349.00
$	 34,193,867.45
$	 61,548,961.41
$	 19,826,542.97
$	 19,346,754.82
1,327,585.47

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	

$

$

32,696.30

$	 17,986,473.05
97.58%
2.63%

	
2	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]	
	
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”.	
	
5	Rehabilitated	Loans	Applied	FYTD	=	FYTD	Total	MR‐10,	“Default	Principal	Amount”,	until	GA	hits	
5%	trigger.	
	
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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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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:	
https://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	2016	=	01/2016	and	September	2016	=	12/2016	
	
Line	items	MR‐1	through	MR‐23	contain	guaranty	agency	monthly	activity	and	any	
corrections	made	for	prior	periods.	Line	items	MR‐24	through	MR‐26	contain	guaranty	agency	
monthly	activity.	
	
	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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	supplemental	requests.	Additional	
requests	are	used	in	situations	where	either	the	lender	or	the	guaranty	agency	did	not	receive	the	
full	payment	when	the	claim	was	originally	processed	by	the	guaranty	agency	or	ED.	This	section	is	
also	used	to	request	additional	reinsurance	on	a	default	claim	when	the	status	changes	to	exempt	
and	the	guaranty	agency	is	entitled	to	100	percent	reimbursement.	Status	changes	due	to	death,	
disability,	closed	school,	false	certification,	or	bankruptcy	should	be	report	on	MR‐3.	
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	would	meet	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:	
	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	


	

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.	
	
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.	
	
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.	
	
ITEM	
NO.	

CATEGORY	

MR‐1	

Claims	Paid	

MR‐1‐
A	

Defaults	–	Net	

Revised:	September	2017	

	AMOUNT	DUE	
TO/(FROM)	
GUARANTOR		

	PRINCIPAL	
AMOUNT		

11,700.00

INTEREST	
AMOUNT	

Effect	on	
Federal	
Receivable		*	

	OTHER	
AMOUNTS		
		

9,700

9,800.00	 								9, 700.00	

Page	21	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
MR‐1‐
B	

Exempt/Lender‐
of‐last‐resort	

MR‐1‐
C	

Death/Disability	

MR‐1‐
D	
MR‐1‐
E	
MR‐1‐
F	
MR‐1‐
G	

		
‐ 		
2,000.00

Closed	
School/False	
Certification	
Bankruptcy	
Unpaid	Refunds	
Discharges	

		
		

		
‐ 		

		

		
‐ 		
		
‐ 		
		
‐ 		

		
		
		

	
																														‐				
		
		
		
Note:	This	column	is	for	reference	purposes	only	and	is	not	an	actual	column	on	Forms	2000.	
	
	
	

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.	
	
	

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	intends	to	honor	the	obligation	to	repay—	
	
 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		
 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	
	
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

Revised:	September	2017	

Page	22	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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.	
	
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.		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)	
PRINCIPAL	AMOUNT	
GUARANTOR	

	

	

OTHER	AMOUNTS	

$9,800
$9,800

$9,800.00

	
	
	

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	that	were	made			to	students	who	were	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	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	$1,000	plus	$5,000.	The	guaranty	agency’s	reporting	on	would	be	as	follows:	
	
	
	
	
AMOUNT	DUE	
	
	
CATEGORY	

ITEM	
NO.	
MR‐1	

Claims	Paid	

MR‐1‐A	

Defaults	–	Net	

MR‐1‐B	

Exempt/Lender‐of‐last‐resort	

MR‐1‐C	

Death/Disability	

Revised:	September	2017	

TO/(FROM)	
GUARANTOR	

PRINCIPAL	
AMOUNT	

INTEREST	
AMOUNT	

OTHER	
AMOUNTS	

6,000.00
0.00
6,000.00
$0.00

Page	23	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

	
	
	

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-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,	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	will	notify	the	borrower	of	
the	discharge	and	refund	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.			
	
	

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	
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‐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	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.	
	

Revised:	September	2017	

Page	24	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
	

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	Non‐	Payment	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	
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	

Revised:	September	2017	

Page	25	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	according	to	34	CFR	682.216.	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	that	is	eligible	to	be	discharged	is	equal	to	the	portion	of	the	outstanding	balance	
attributable	to	the	deceased	or	disabled	borrower	as	of	the	date	the	borrower	died	or	became	
totally	and	permanently	disabled.		
	
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.	
	
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
#1	
#2	
#3	
Subtotal

Amount
$	5,000,00
$	3,000.00
$	5,000.00
$	13,000.00

	

Revised:	September	2017	

Page	26	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
In	addition,	the	guaranty	agency	has	two	requests	for	teacher	loan	forgiveness	discharges	on	loans	
they	hold:	
	
	
	

Borrower
#4	
#5	
Subtotal	

	

Reinsurance
GA
Complement	
Reimbursement
Amount
$	 1,000,00
1,000 ‐ (1000*98%)
$	20.00
$	500.00
500 ‐ (500*95%)
$	25.00
$	45.00

	
The	amount	entered	in	MR‐1‐G,	Discharges,	Principal	Amount	is	$13,045.00.	
	
	
	
ITEM	NO.	

	
	

CATEGORY	

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	

MR‐1‐D	

Closed	School/False	Certification	

$	0.00

MR‐1‐E	

$	0.00

MR‐1‐F	

Bankruptc 	
y
Unpaid	Refunds	

MR‐1‐G	

Discharges		

INTEREST	
AMOUNT	

OTHER	
AMOUNTS	

$	30,	525.00
$	9,500.00

$	10,000.00

$		6,000
$	2,000.00

$	0.00
$	13,045.00

	

	
	
The	guaranty	agency	must	also	report	the	federal	receivable	portion	of	the	forgiveness	
discharge	or	partial	discharges	of	Consolidation	loans	in	MR‐31,	Other	Transactions	Affecting	the	
Federal	Receivable.			
	

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	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	scenario	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	scenario,	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.	
	

Revised:	September	2017	

Page	27	

Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	
system‐calculated	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.	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.			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	request	supplemental	reinsurance	on	the	line	items	below.	
	

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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.	
	
Reporting	on	GAFR:	
	
	AMOUNT	
DUE	
TO/(FROM)	
GUARANTOR	

ITEM	
NO.	

CATEGORY	

MR‐3	

Status	Changes	

MR‐3‐
A	

Death/Disability	

MR‐3‐
B	

Closed	
School/False	
Certification	

MR‐3‐
C	

Bankruptcy	

Effect	on	
	OTHER	
Federal	
AMOUNTS		
Receivable		*

	PRINCIPAL	 INTEREST	
AMOUNT		
AMOUNT	

		

345.00
		200.00	

		

		

		

		

		

		

50.00	
	18.00	
2.00	
	50.00	

25.00	

	
Note:	This	column	is	for	reference	purposes	only	and	is	not	an	actual	column	on	Forms	2000.	
	
	

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.	
	
Example:	
	
	

	

	

Borrower	#1	 D/D	
Borrower	#2	 CS/FS	
Borrower	#3	 Bankruptcy	

	

	

Borrower	
Original	Claims	
Original	Claims	
Status	Changes	 Paid	to	Lender	
Paid	to	Lender	
Default	To	
Principal	Amount	 Interest	Amount	

	

	
	
ED	Payment	 	
ED	Payment	to	 Additional	
Additional	
to	GA	
Amount	due	
GA	Interest	
Amount	due	
Principal	
GA	‐	Principal	 GA	‐	Interest	
Amt.	
Amt.	

$4,000	@	95%

$1,000	@	95%

$3,800.00

$950.00

$200.00

$50.00

$900	@	98%

$100	@	98%

$882.00

$98.00

$18.00

$2.00

$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

	

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Reporting	on	GAFR:	
	
	
ITEM	
NO.	

	
CATEGORY	
	

MR‐3	

Status	Changes	

MR‐3‐A	

Death/Disability	

	MR‐3‐B	

Closed	School/False	
Certification	
	MR‐3‐C				 Bankruptcy	

AMOUNT	DUE
TO/(FROM)	
GUARANTOR	

PRINCIPAL	
AMOUNT	

$345.00

INTEREST	
AMOUNT	

OTHER	
AMOUNTS	
	

$200.00

$50.00	

$18.00

$2.00	

$50.00

$25.00	

	
	
	

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.	
		
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	
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.	
	

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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	
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,	and	Interest.	
	
	
	
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.	
	

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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	once	it	is	determined	that	the	claim	was	invalid..			
	
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.	
	
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	
	

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

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”:			
	
 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‐last‐	resort	loan	claims	
because	these	claims	do	not	affect	a	guaranty	agency’s	trigger	figure.	
		
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	system‐	calculated	field	that	
does	not	allow	guaranty	agency	input.	
	

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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	
		
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	

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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	non‐
reinsured	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.		
	
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	the	outstanding	principal	(net	of	any	
complement)	plus	outstanding	accrued	interest	due	E.D	
	
	

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	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	on/after	10/7/98:	
o 270	days	for	a	loan	payable	in	monthly	installments	or	
o 330	days	for	a	loan	payable	in	less	frequent	installments.	
	
 For	loans	delinquent	before	10/7/98:	
o 180	days	for	a	loan	payable	in	monthly	installments	and		
o 240	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	
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.	
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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.	
	
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.	

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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	system‐calculated	field	that	
does	not	allow	guaranty	agency	input.	
	

	

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	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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:	
	
	

Principal	

Amount	of	Default	Claim	Paid	to	
$1,000.00
Lender	
GA	Reimbursement	Rate	
95%
Borrower	Payment	Received	
$100.00
	
	
GAFR	Reporting:	
	
	
	

Interest	

$50.00

$25.00

Other	

$25.00

	
	

If	borrower	payment	is	
received	by	the	lender	and	
forwarded	to	the	guaranty	
agency	before	the	guaranty	
agency	files	for	reinsurance.	

	

MR‐1	

If	borrower	payment	is	
MR‐7	or	
received	by	the	lender	and	
MR‐8	
forwarded	to	the	guaranty	
after	lender	claim	payment.	
If	borrower	payment	
MR‐12	or	
is	received	directly	
MR‐13	
by	the	guaranty	
agency	after	the	
default	insurance	
claim	has	been	paid	
to	the	lender.	

	

($1,000	–100)	*	
95%	
=$855.00	
($100	*	95%)	=	
	

	

	

	

	

($25	*	95%)	
less	($25	
*	16%)	
=	$18.00	

($25	*	95%)	
less	($25	*	
16%)	
=	$18.00	

$95.00	

	

($50	*95%)	less	
($50*16%)	
=$39.50	

	
	

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‐

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	lender‐	of‐
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.	
	
	

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	the	partial	refund	from	
a	lender	or	the	guaranty	agency.	
	
	

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	the	partial	
refund	from	a	lender	or	the	guaranty	agency.	
	
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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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	
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.			
	

	

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%.	
	
Further	changes	in	status	may	also	require	reporting	in	the	Non‐Payment	Activity	Section,	
MR‐	20	through	MR‐23,	Status	Changes	‐	Account	Balance	after	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

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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	after	conversion	of	these	status	changes	
should	also	be	reported	in	the	Non‐Payment	Activity	section,	Status	Changes	‐	Account	Balance	
after	conversion,	MR‐23,	Bankruptcy	to	Default/Lender	of	Last	Resort.	
		
	

	

MR-10 Rehabilitated Loans

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.	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.	(Note:	Beginning	July	1,	2014,	a	guaranty	agency	
may	assign	the	loan	to	ED	if	the	agency	has	been	unable	to	sell	the	loan	to	an	eligible	lender.	That	
activity	is	reported	in	MR31).		
	
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	16	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.			
	

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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.	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	
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.		Effective	July	1,	2014,	multiply	
the	outstanding	principal	balance	by	the	reimbursement	rate.	
	
Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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.			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	10‐A,	an	explanation	must	be	provided	in	the	comment	section.			
	
The	example	below	demonstrates	GAFR	reporting	for	rehabilitation	loans	sales.		
	
Example:	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	

	
Payoff	Amount	
	
Secretary’s	Share	
	
GA	Retention		
Complement	
(for	informational	
purposes	

Accrued	
Interest	

$993.27

$6.73

	
Other	
Charges	

Total
Payoff	
Amount	

$160.00 $1,160.00

$993.27	*	98%	 =	 $973.40
1000*16%
=	$160.00	
$1,160.00	–	$973.40	–	$6.73	 –
$160.00		=

	
	

ITEM	NO.	
	

MR‐10	
MR‐10‐A	

	

CATEGORY	
Rehabilitated	Loan	
Refund	
Rehabilitated	Loans	

Revised:	September	2017	

AMOUNT DUE
TO/(FROM)	
GUARANTOR
$973.40

PRINCIPAL	
AMOUNT

INTEREST	
AMOUNT

	

OTHER	
AMOUNTS

$973.40
$6.73

$160.00

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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.		.	
	

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.	
	
		
	
		
	
	

MR-11 FFEL Consolidation Refund - Amount Due To/ (From) Guarantor
No	activity	should	be	reported	on	this	line	item.	

MR-11 FFEL Consolidation Refund - Principal Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11 FFEL Consolidation Refund - Interest Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11 FFEL Consolidation Refund – Other Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11-A FFEL Consolidation Payoff – Principal Amount
No	activity	should	be	reported	on	this	line	item.	

	

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
	

MR-11-A FFEL Consolidation Payoff – Interest Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11-B FFEL Consolidation GA Retention – Principal Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11-B FFEL Consolidation GA Retention - Interest Amount
No	activity	should	be	reported	on	this	line	item.	

	
	

MR-11-B FFEL Consolidation GA Retention - Other Amount
No	activity	should	be	reported	on	this	line.	

	
		

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‐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.	A	guaranty	agency	may	not	attempt	to	collect	
the	following	types	of	claims:	
	
 bankruptcy	(all	Chapters)	
 death	and	disability	
 closed	school	
 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.	
	

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

	

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	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	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.	
	

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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.	
	
Example:	
Wage	Garnishment	Collections	(Reinsurance	Reimbursement	Rate	=	95%)	
GA	Received	the	Collection	on	October	10,	2007	(Collection	Retention	Rate	–	16%)	
	
	
	

AMOUNT DUE
	
	
TO/(FROM)	
PRINCIPAL	 INTEREST	 OTHER	
GUARANTOR
AMOUNT AMOUNT
AMOUNTS
	$
7,900.00 $5,530.00
$1,580.00
$ 790.00

	

ITEM	NO.	
MR‐12	

	

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
2,000.00
($57000	*	.95)	‐	($7000	*. ($2000	*.	95)	‐	($2000	*.16)		 =
16)
$1,580.00
$7000	*.16	=	$1,120

1,000.00
($1000	*	.95)	‐	($1000	*	.16)
=	$790.00

$2000	*	.16	=	$320

$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.	
	
	

MR-12-A Administrative Wage Garnishment –Total Collected – Principal

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
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.	
	

Revised:	September	2017	

	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	

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.	
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	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.	

Revised:	September	2017	

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Guaranty	Agency	Financial	Report	(GAFR)	Guide	
	
	
Example:	
Default	Collections	(Reinsurance	Reimbursement	Rate	=	95%)	
GA	Received	the	Collection	on	October	10,	2007	(Collection	Retention	Rate	–	16%)	
	
	

Total	
Collected	

	

Principal

$38,000.00

Secretary’s	
Share	

Interest

15,000.00

Other	Charges

12,000.00

11,000.00

($15000	*.	95)	‐ ($15000 ($12000	*.	95)	‐ ($12000	*	 ($11000	*	.95)	‐ ($11000	
*
.16)
*	.16)	=	$8,690
.16)=	$11,850
=	$9,480
$15000	*	.16	=	$2,400
$12000	*	.16	=	$1,920
$11000	*	.16	=	$1,760

GA	Retention	

	
	
ITEM	NO.	
MR‐13	

	
CATEGORY	
Default	Collections	

AMOUNT	DUE
	
TO/(FROM)	 PRINCIPAL	 INTEREST	
OTHER	
GUARANTOR	 AMOUNT	 AMOUNT	 AMOUNTS	
$30,020.00

$11,850.00

$	9,480.00

$	8,690.00

$15,000.00 $12,000.00	

$11,000.00

	
MR‐13‐A	 Default	Collections	‐	Total	Collected
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	system‐
calculated	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)	

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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

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	

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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	Non‐	Reinsured	
GA	Interest),	
 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	system‐
calculated	field	that	does	not	allow	guaranty	agency	input.	
	
	

MR-14 Bankruptcy Collections – Principal Amount

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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.	
	
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.	
	

NON-PAYMENT ACTIVITY (Accounting Data)

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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	MR‐	13,	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.	
	
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	

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

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	MR‐	4,	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.	
	
	

Account Balance at Conversion – Principal Amounts Column

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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	disabil‐	ity	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	in	which	a	claim	is	paid	to	a	lender	because	the	enrolled	student	was	unable	to	complete	the	
program	is	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.	
	
	

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	
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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	
returned	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	the	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:	Loan	balance	(amount	paid	to	lender	$100.00),	the	Federal	Receivable	is	95	($100.00	x	
95%)	
	
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.	
	
Incorrect	Method	Example:	
	
Borrower	balance	
Complement	amount	

$100.00 * 98%	*	95%

$	93.10

($100%‐95%) * $100.00

5.00

GA	Reimbursed	amount	plus	complement

98.10

		Non‐reported		 	
Shortage	in	Federal	Receivable	calculation

1.90

Original	borrower	balance	

$	100.00

	
	

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This	information	is	also	needed	in	order	to	adjust	ED’s	financial	records	and	comply	with	
federal	government	financial	reporting	requirements.	This	reporting	only	includes	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

Enter	the	amount	of	principal	and	purchased	interest	activity	for	the	reporting	period,	
based	upon	the	account’s	applicable	reinsurance	percentage			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

Enter	the	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

Enter	the	amount	of	fees,	penalties,	collection	charges	and	any	other	charges	based	upon	
the	account’s	applicable	reinsurance	percentage	rate	that	has	accrued	for	any	loan	for	the	reporting	
period.	
	
	

MR-24 Collection Terminations

Enter	the	dollar	amount	of	the	federal	receivable	balance	(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).	All	collection	terminations	must	meet	standards	approved	by	ED.	
	
	

MR-25 Compromises

Enter	the	dollar	amount	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).	
	

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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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CHAPTER 2: GUARANTY AGENCY
FINANCIAL REPORT
MONTHLY/QUARTERLY
	

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.	Guaranty	agencies	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.95%	
	
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

Enter	the	total	amount	of	principal	and	purchased	interest	activity	for	the	reporting	period,	
based	upon	the	account’s	applicable	reinsurance	percentage.	Principal	includes	all	purchased	
interest	because	purchased	interest	must	be	capitalized	by	the	guaranty	agency.	
	
	

Interest Amounts Column

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Enter	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.	
	
	

Other Amounts Column

Enter	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	amount	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	amount	for	subrogated	loans	(permanent	assignments	to	ED).	
Report	only	subrogated	loans	that	are	accepted	by	the	Debt	Collection	Service	during	the	reporting	
period.	
	
	

MR-29 Default Loans Transferred Out

Enter	the	federal	receivable	amount	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	federal	receivable	amount	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	federal	receivable	amount	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.,	
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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	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.	
	
In	the	GA	Comment	section	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	
#1	
#2	
Subtotal	

	

Amount	
$	 1,000,00
500.00

	

Reinsurance	Reimbursement Federal	Receivable	
1000*98%
500*95%

$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:	

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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	
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‐	

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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		ED’s	financial	records	and	to	comply	with	federal	government	financial	reporting	requirements.		
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.	
	
Do	Not	Include:	
	
 Loans	permanently	assigned	to	ED	are	not	to	be	reported	in	this	section	because	the	agency	
no	longer	holds	the	account.	
	
 Amounts	for	repurchased,	rehabilitated	loans	
	
 Defaulted	loans	consolidated	under	the	Federal	Direct	Loan	Program.		
	
 Loans	that	are	in	a	bankruptcy	status	
	
 Loans	for	the	following	types	of	claims:	bankruptcy,	death	and	disability	and	closed	school	
or	false	certification.	
	
When	reporting	an	outstanding	balance	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.	Also	include	accounts	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:	
	

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


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	
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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CHAPTER 3: GUARANTY AGENCY
FINANCIAL REPORT ANNUAL
		

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	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	Annual	Report	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	
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	
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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‐of‐fiscal	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.	

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;		

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


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.	
		
	
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).		
	

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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:	
	
 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.	
	

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

	

	

	


	

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.	
		
	
	

AR-10 Death and Disability Claims Paid

Enter	the	amount	of	principal	paid	to	lenders	for	death,	and	for	total	and	permanently	
disability	claims.	
	

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

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	e‐mail	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	AR‐16	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.	
	

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Projected	Years	‐	Report	projected	investment	income	on	the	Federal	Fund.	
		
	
	

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.	

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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.	

		
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	+	[MR‐	
1‐G],	Discharges	–	[MR‐5‐A	through	MR‐5‐E]	Repurchases,	CFY,	(Principal,	Interest,	and	
Other	Amounts)	–	[MR‐6‐A	through	MR‐6‐E],	Repurchases‐	
PFY	(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.	
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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 amount transferred from 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.	
	


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.	

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AR-28 Amount received from Operating Fund to Repay Advance for
Operating Expenses
No	reporting	required	for	this	line	item.	
		
	

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.	
	

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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	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)

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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	
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.	

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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.	
		

	

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

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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	long‐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	AR‐	53,	
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).			
	
	
	
	
	

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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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ATTACHMENT A – Federal Fund Itemized Schedule
	

FEDERAL	FUND	
S	C	H	E	D	U	L	E		O	F		I	T	E	M	I	Z	E	D		L	I	N	E		I	T	E	M	S	
	
	
	
ITEM	NO.	 CATEGORY	

AMT./	CY	 CY	+ 1	 CY	+2	
ACTUAL	 PROJ.	 PROJ.	

AR‐20	
	
	
	
	
	
	
	
AR‐25	
	
	
	
	
	
	

	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	
	
	
	
	
	
		
	
	
	

OTHER	REVENUES:	
	
	
	
	
	
	
	
OTHER	EXPENSES:	
	
	
	
	
	
	

	
	
	
	
	
	

	
	
	
	
	
	

	
	
	
	
	
	

Revised:	September	2017	

	
	
	
	
	
	

CY	+3	
PROJ.	

CY	+ 4	 CY	+	5	 EXPLANATION
PROJ.	 PROJ.	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	
	
	
	
	

	
	
	
	
	

	
	
	
	
	

	
	
	
	
	

	

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ATTACHMENT B – Operating Fund Itemized Schedule
	

OPERATING	FUND	
S	C	H	E	D	U	L	E		O	F		I	T	E	M	I	Z	E	D		L	I	N	E		I	T	E	M	S	
	
	
	
	
ITEM	NO.	 CATEGORY	

AMT./	CY	 CY	+ 1	 CY	+2	
ACTUAL	 PROJ.	 PROJ.	

AR‐36	
	
	
	
	
	
	
	
AR‐39	

OTHER	REVENUES:	
FFEL:	
	
	
NON‐FFEL:	
	
	
	
OTHER	
EXPENDITURES:	
FFEL:	
	
	
NON‐FFEL:	
1.		Other	Student	
Financial	
Aid	related	
expenditures	for	the	
benefit	of	students	

	
	
	
	
	
	
	
	
	

	
	
	
	
	
	
	
	
	

	
	
	
	
	

	
	
	
	
	

	
	
	

	
	
	

	
	
	

	
	
	
	
	

	
	
	

	
	
	
		
	
	
	

	
	
	

	
	
	

	
	
	

Revised:	September	2017	

	
	
	

	
	
	

	
	
	

	
	
	

CY	+3	
PROJ.	

CY	+4	
PROJ.	

CY	+	5	 EXPLANATION
PROJ.	

	
	
	

	

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ATTACHMENT C – Balance Sheet Section Itemized
Schedule
	
BALANCE	SHEET	SECTION	(Federal	Fund)	
S	C	H	E	D	U	L	E		O	F		I	T	E	M	I	Z	E	D		L	I	N	E		I	T	E	M	S	

	
	
	
	
ITEM	NO.	 CATEGORY	

AR‐52	
	
	
	
	
	
	
	

OTHER	ASSETS:	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
ALLOWANCES	AND	
	
OTHER	NON‐CASH	
CHARGES	TO	FEDERAL	
FUND:	
	
	
	
	
	
	
	
	
	
	
	
	

	

AR‐56	
	
	
	
	
	
	

	
		
	
	

AMT./	CY	 CY	+ 1	
ACTUAL	 PROJ.	

	

	

CY	+2	
PROJ.	

CY	+3	
PROJ.	

CY	+ 4	
PROJ.	

CY	+	5	
PROJ.	

EXPLANATION

	
	
	
	
	
	
	
	
	

	
	
	
	
	
	
	
	
	

	
	
	
	
	
	

	
	
	
	
	
	

	

Revised:	September	2017	

	

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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.	
	
GA
CODE
708
712
717
721
722
723
725
726
729
731
733
734
735
736
737
740
742
744
748
749
750
753
755
800
927
951

	

GA STATE NAME
Colorado
Florida
Illinois
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Missouri
Nebraska (II) *
New Hampshire
New Jersey
New Mexico
New York
North Carolina
Oklahoma
Pennsylvania
Rhode Island
Texas (II) *
Utah
Vermont
Washington
Wisconsin
USA Funds
Minnesota
Minnesota

	

GA ABBREVIATION
CO
FL
IL
KY
LA
ME
MA
MI
MO
NE
NH
NJ
NM
NY
NC
OK
PA
RI
TX
UT
VT
WA
WI
UF
MB
MV

LEGAL NAME
Colorado Student Loan Program DBA College Assist
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
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
Oklahoma Guaranteed Student Loan Program
Pennsylvania Higher Education Assistance Agency
Rhode Island Higher Education Assistance Authority
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	Agencies	that	have	ceased	participation:	
	
GA
CODE
611
620
627
631
654
656
701
706
705
709
710
711
713
716
718
719
724
727
728
730
738
739
741
745
746
747
751
772
778
804
815
948

	

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
Montana
North Dakota
Ohio
Oregon
South Carolina
South Dakota
Tennessee

GA
ABBREVIATION
DC
KS
MN
NB
WV
WY
AL
CA
AR
CT
DE
DG
GA
ID
IN
IA
MD
MM
MS
MT
ND
OH
OR
SC
SD
TN

Virginia
Puerto Rico
Virgin Islands
Arizona
Hawaii
Texas (I) *

VA
PR
VI
AZ
HI
TC

GA STATE NAME

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
Guarantee Student Loan Program
North Dakota Student Loan Program
Ohio Student Loan Commission
Oregon State Scholarship Commission
South Carolina Loan Corporation
Education Assistance Corporation
Tennessee Student 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.	

	
	

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