Skip main navigation.
 U.S. Department of Education: Promoting Educational Excellence for all Americans - Link to Home Page

Financial Highlights | Lines of Business

The Department managed a budget of $73 billion in fiscal year (FY) 2005, of which 52 percent supported elementary and secondary programs and grants. Postsecondary grants and administration of student financial assistance accounted for 41 percent, including programs that helped nearly 9.4 million students and their parents to better afford higher education during FY 2005. An additional 5 percent went toward other programs and grants encompassing research, development, and dissemination, as well as rehabilitation services. The remaining 2 percent of our appropriations was directed toward administrative expenditures.

Nearly all our appropriations, 98 percent in FY 2005, support three primary lines of business—grants, administration of guaranteed loans, and administration of direct loans. The original principal balances of the Federal Family Education Loans and Federal Direct Student loans, which comprise a large share of federal student financial assistance, are funded by commercial bank guarantees and treasury borrowings.


A significant part of the Department's budget is used to support ongoing programs that were reauthorized or created by the implementation of No Child Left Behind. This support is provided to state and local governments, schools, individuals, and others that have an interest in educating the American public.

The Department's three largest grant programs, Title I grants for elementary and secondary education, Pell grants for postsecondary financial aid, and Special Education Grants to States under the Individuals with Disabilities Education Act, each exceeded $10 billion in appropriations for FY 2005.

Guaranteed Loans

The Federal Family Education Loan Program makes loan capital from more than 3,200 private lenders available to students and their families. Through 35 active state and private nonprofit Guaranty Agencies, the Department administers the federal loan guarantee program to protect lenders against losses related to borrower default. As of the end of September 2005, the total principal balance of outstanding guaranteed loans held by lenders was approximately $289 billion, with the government's estimated maximum exposure being $288 billion.

Direct Loans

The Federal Direct Student Loan Program, created by the Student Loan Reform Act of 1993, provides an alternative method for delivering assistance to U.S. students that uses Treasury funds to provide loan capital directly to schools. The schools then disburse loan funds to students. As of September 30, 2005, the value of the Department's direct loan portfolio is $95.7 billion.