1. Session 66 ED Forms 2000 for Beginners: Annual Reporting Katrina Turner Nettie Harding

2. 2 Loans In Repayment Category Calculations AR-1 Loans Guaranteed (Except Federal Consolidation) Minus AR-2All Loans Cancelled (Except Federal Consolidation) Plus AR-3Federal 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-14Total Loans in Deferment Prior to First Payment EqualsLoans in Repayment

3. 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. 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. 5 AR-15 Beginning Balance (from 9/30/xx) AR-15 should be equal to ending balance (AR-26) of the prior year.

6. 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. 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. 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. 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. 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 fees These examples are not inclusive

11. 11 AR-21 Claims Expensed to Lenders Claims expensed during the FFY Net of refunds Overpayments and repurchases for all FFEL programs loans

12. 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. 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. 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. 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. 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. 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. 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. 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. 20 AR-29 Beginning Balance (from 9/30/xx) AR-29 should be equal to ending balance (AR-40) of the prior year.

21. 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. 22 AR-31 Loan Processing and Issuance Fee Revenue Report loan processing and issuance fee revenue recognized

23. 23 AR-32 Account Maintenance Fee Report account maintenance fees recognized from the Department

24. 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

25. 25 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. 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. 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. 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. 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. 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. 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. 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. 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. 34 Restricted Account The Restricted Accounts AR-43 through AR-47 are obsolete

35. 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. 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. 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. 38 AR-50 Net Investment in Property, Plant, Equipment, and Inventory Report balances of property, plant, equipment LESS accumulated depreciation

39. 39 AR-51 Accounts Receivable from ED Report balances owed to the Federal Fund by ED For example: –Reinsurance and other payments

40. 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. 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. 42 AR-54 Accounts Payable to ED Report other liabilities for expenses due ED within the next 12 months

43. 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. 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. 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

46. 46 Technical Slide We appreciate your feedback and comments. Katrina TurnerNettie Harding 202.377-3311202-377-3307 Katrina.Turner@ed.gov Nettie.Harding@ed.gov 202.275.0913