Session 66

ED Forms 2000 for Beginners: Annual

Reporting Katrina Turner

Nettie Harding

2

Loans In RepaymentCategory Calculations

AR-1 Loans Guaranteed (Except Federal Consolidation)

Minus AR-2 All Loans Cancelled (Except Federal Consolidation)

Plus AR-3 Federal Consolidation Loans Guaranteed

Minus AR-4 Federal Consolidation All Loans Cancelled

Minus AR-5 Uninsured Loans

Plus AR-6 Loans Transferred In

Minus AR-7 Loans Transferred Out

Minus AR-8 Default Claims Paid

Minus AR-9 Bankruptcy Claims Paid

Minus AR-10 Death and Disability Claims Paid

Minus AR-11 Closed School/False Certification Claims Paid

Minus AR-12 Loans Paid in Full

Minus AR-13 Federal Stafford and Unsubsidized Stafford Interim Loans

Minus AR-14 Total Loans in Deferment Prior to First Payment

Equals Loans in Repayment

3

Loans In Repayment (Con’t.)

All amounts are cumulative since the inception of the agency except for line items AR-13 and AR-14 which are amounts as of the end of the current fiscal year.

4

Federal Fund Section

Includes line items:

AR-15 through AR- 29

In accordance with 34 CFR 682.419, the Guaranty Agency Federal Fund, is a separate account that contains only funds belonging to the Federal Government.

5

AR-15 Beginning Balance (from 9/30/xx)

AR-15 should be equal to ending balance (AR-26) of the prior year.

6

AR-16 Investment Income• Amount of all investment

income recognized in the Federal Fund, including net increases/ decreases in fair value of investments

• Interest activity is reported on AR-16

7

AR-17 Reinsurance from ED• Amount of federal

reinsurance from ED• Net of Refunds• Overpayments &

repurchases for defaults• Bankruptcies• Death• Disability• Closed Schools or False

Certification

8

AR-18 Collections of Default Loans- Reinsurance Complement

• Amount of reinsurance complement from default collections

• 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.

9

AR-19 Federal Default Fee• Effective for loans

guaranteed on or after July 1, 2006.

• The fee is equal to 1 percent of the principal amount of loans guaranteed on or after July 1, 2006

10

AR-20 Other Revenue• Include deferred revenues• Report itemized entries• For example:

– Secretary’s Share of default collections (up to 8.5% of collection costs charged the borrower) on default FFEL

– DL Consolidation loans– OIG interest penalty– Audit findings– Usage feesThese examples are not inclusive

11

AR-21 Claims Expensed to Lenders• Claims expensed during

the FFY

• Net of refunds

• Overpayments and repurchases for all FFEL programs loans

12

AR-22 Recall of Federal Funds to the Restricted Account

• Amount of the agency’s required share of the reserved fund recall, which was deposit in a restricted account

• No reporting required for this line item

13

AR-23 Transfer to Operating Fund for Default Aversion

• Report net Default Aversion expense recognized for delinquent loans which agencies receive lenders requests for default aversion assistance

• Payment is authorized under the Department’s regulation and guidance for the current FFY

• Amount should reconcile to line AR-30, Default Aversion Fee Revenue

14

AR-24 Transfer to Operating Fund for Account Maintenance Fee

• Report the transfer amount, regardless of the actual transfer, from Federal Fund for AMF for the current FY

• Amount should reconcile to line AR-33, Transfer from Federal Fund for AMF

• FY 07 No Spending Cap• FY 06

– Spending Cap $220M– Payment Methodology– Authority to Transfer Funds

Rescinded 7/1/2006

15

AR-25 Other Expenses• Other expenses which are not

reported elsewhere, such as:– provision for loan losses– SES recognized on

collections of defaulted, consolidated,and rehabilitated FFEL loans

– Guarantor retention• Report itemized entries, such

as:– Prior year accrual,

depreciation

16

AR-26 Ending Balance• The ending balance must

equal the sum of AR-15 through AR- 20 minus AR-21 through AR-26 as well as the ending balance on AR-57 (Federal Fund Balance Sheet Section)

• AR-26 must equal AR-57

17

AR-27 Amount Transferred from Federal Fund to Operating Fund for Operating Expenses (Repayable)

• Money borrowed from Federal Fund for operating expenses

• No reporting required for this line item

18

AR- 28 Amount Received from Operating Fund to Repay Advance for Operating Expenses

• Repayment of amounts borrowed from Agency Operating Fund.

• No reporting required for this line item

19

Operating Fund Section

Includes line items:

AR- 29 through AR- 42

In accordance to 34 CFR 682.423, the Guaranty Agency Operating Fund is a separate account that contains only funds belonging to the Guaranty Agency

20

AR-29 Beginning Balance (from 9/30/xx)

• AR-29 should be equal to ending balance (AR-40) of the prior year.

21

AR-30 Default Aversion Fee Revenue• Report Default Aversion Fee

(DAF) recognized for delinquent loans which agencies receive lenders requests for default aversion assistance

• Payment is authorized under the Department’s regulation and guidance for the current FFY

• Amount should reconcile to line AR-23, Transfer to Operating Fund for Default Aversion

22

AR-31 Loan Processing and Issuance Fee Revenue

• Report loan processing and issuance fee revenue recognized

23

AR-32 Account Maintenance Fee• Report account

maintenance fees recognized from the Department

24

AR-33 Transfer from Federal Fund for Account Maintenance Fee

• 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

• Authority to Transfer Funds Rescinded 7/1/2006

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AR-34 Collections of Defaulted Loans Less Reinsurance Complement

• Report collection revenue recognized from payments to GA by defaulted borrowers

• Amount reported should be your agency’s share of collections. Does not include SES of collections

• Include receipts from rehabilitated loan sales and consolidation of defaulted loans under the FFEL program

• Do not include amounts reported in AR-18

26

AR-35 Investment Income• The amount of all

investment income recognized in the Operating Fund including net increase (decrease) in fair value of investments

27

AR-36 Other Revenue• Other revenues that are FFEL and

non-FFEL not already reported elsewhere Includes:– Payments received to

consolidate loans under the Direct Loan Program

– Net Secretary’s fee• Report itemized entries Includes:

– Default aversion– VFA revenue

28

AR-37 Collections of Defaulted Loans• Formally SES was

reported in this line item

• Currently Secretary’s Equitable Share should be reported in AR-20, Other Revenue and AR-25, Other Expense

• No reporting required for this line item

29

AR-38 Operating Expense• Expenses associated with:

– Application processing

– Loan disbursement

– Enrollment and repayment status management

– Default aversion activities

– Claims processing

– Default collection activities

– School and lender training

– Financial aid awareness

30

AR-39 Other Expenditures• Report FFEL and Non FFEL

expenses

– Include amounts used for default prevention activities

• Itemized entries may include:

– Administration costs

– Transfers to federal fund

– OIG audit liabilities

– 48-hour rule

31

AR-40 Ending Balance• The ending balance must

equal the sum of AR-29 through AR-36 minus AR-37 through AR-39 equals AR-40

32

AR-41 Amount Received from Federal Fund for Operating Expenses

• Money received from Federal Fund for operating expenses.

• No reporting required for this line item

33

AR-42 Amount Repaid to Federal Fund For Operating Expenses

• Money repaid to Federal Fund from Operating Fund

• No reporting required for this line item

34

Restricted Account• The Restricted Accounts

AR-43 through AR-47 are obsolete

35

Balance Sheet (Federal Fund)

Include line items:

AR-48 through AR-57

The balances reported in this section should reconcile to amounts reported on the Guarantor’s audited financial statements as of the end of the Federal fiscal year 9/30/xx

36

AR-48 Cash, Cash Equivalents and Investments

• Report cash, cash equivalents and investment (regardless of maturity date of investments) balances.

• If applicable, report Voluntary Flexible Agreement (VFA) escrow balance

37

AR-49 Restricted Account Cash, Cash Equivalent and Investments

• Amount of Federal Fund Cash deposit on the Restricted Account as of October 1

• Do not report escrow balances

• No reporting required

38

AR-50 Net Investment in Property, Plant, Equipment, and Inventory

• Report balances of property, plant, equipment LESS accumulated depreciation

39

AR-51 Accounts Receivable from ED• Report balances owed to

the Federal Fund by ED

• For example:

– Reinsurance and other payments

40

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 Includes:

– Guarantee fee receivable

– Receivable from Operating Fund

– Default aversion fee rebate

41

AR-53 Accounts Payable, Accrued Expenses and Other Current Liabilities

• Report liabilities for expenses due, other than ED, including amounts due Operating Fund

• Claim payments payable to lenders, if amount is to be paid within 12 months

42

AR-54 Accounts Payable to ED• Report other liabilities for

expenses due ED within the next 12 months

43

AR-55 Other Liabilities• Report other liabilities that are

not reported elsewhere Including:

– Outstanding federal advances due to Ed

– Remaining reserve return obligation

– To be paid more than 12 months from current date

– FY 07 Recall Amount must be reported in this line item

44

AR-56 Allowances and Other Non-Cash Charges to Federal Fund

• Report the net present value:– Expected future claims– Net recoveries– Amount to be paid on

guaranteed loans

MINUS– expected reimbursements of

these claims– Other allowances (such as

deferred unearned Federal default fees)

45

AR-57 Federal Fund Balance• The Federal Fund balance on an

accrual basis for the fiscal year being reported is calculated:

– ADD AR-48 through AR-52 and subtracting 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

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Technical SlideWe appreciate your feedback and comments.

Katrina TurnerNettie Harding202.377-3311 202-377-3307

Katrina.Turner@ed.gov Nettie.Harding@ed.gov

202.275.0913