Federal Student Loan Programs Data Book FY94-FY96
Table 1. Federal Family Education Loan (FFEL) program executive summary: FY66-FY96
This table provides summary information about FFEL program loan volume, defaults, expenditures, and receipts for FY66-FY96
Loan volume commitments
- Since its inception, approximately 86.2 million loans worth over $223.8 billion have been committed through the FFEL program; 63.5 percent of these loans were committed in FY86-FY96.
- While the annual loan volume increased overall between FY86 and FY94, there were annual decreases in the number and dollar amounts of FFEL program loan commitments in FY95-FY96. The amount of loan volume commitments decreased to $21.0 and $19.7 billion in FY95 and FY96, respectively, representing a 9.1 percent and a 5.8 percent decrease from prior years.
- The number of loans also dropped in FY95 and FY96 to 5.9 and 5.3 million, respectively, representing a 12.9 percent and a 9.1 percent decrease from prior years.
- FFEL program annual loan volume commitments reached their highest levels in FY94 when 6.7 million loans worth $23.1 billion were committed. In FY94, the amount of commitments increased 29.1 percent from FY93 and the loan commitments increased by 19.4 percent.
- Between FY86-FY96, the average loan increased 55.7 percent (from $2,374 to $3,697). The greatest increase occurred in FY93 (10.0 percent from the previous year), after which the average loan continued to increase but at a slower rate.
Defaults
- Cumulative guaranty agency (GA) payments made on defaulted loans to lenders were $28.9 billion in FY96, 85.2 percent of which were made between FY86 and FY96.
- GA default payments to lenders increased overall from FY86 to a peak of $3.2 billion in FY91. In each of the fiscal years that followed, GA default payments to lenders decreased reaching $2.3 billion in FY95. In FY96, however, GA default payments to lenders increased 16.1 percent to $2.7 billion.
Federal outlays
Federal outlays include the payments made to lenders and guaranty agencies and the cost of collections. Major FFEL program outlays include interest benefits paid to lenders and reinsurance default claims paid to guaranty agencies. These two outlay components accounted for 85.7 percent of all FFEL program outlays in FY96.
- In FY86-FY96, the total federal outlays for the FFEL program fluctuated from a low of $3.4 billion in FY87 to a high of $6.4 billion in FY96. The greatest increase (33.1 percent) occurred in FY89, while the greatest decrease occurred in FY87 (15.0 percent).
Table A-Federal outlay component as a percent of total federal outlays: FY86?FY96
(Subset of table 1)
Federal outlays |
FY86 |
FY87 |
FY88 |
FY89 |
FY90 |
FY91 |
FY92 |
FY93 |
FY94 |
FY95 |
FY96 |
To lenders |
|
|
|
|
|
|
|
|
|
|
|
|
Interest benefits |
38.80% |
45.50% |
40.20% |
30.10% |
26.80% |
27.60% |
36.20% |
33.60% |
40.40% |
38.60% |
42.10% |
|
Special allowance |
22.5 |
14.0 |
18.1 |
28.8 |
25.2 |
15.9 |
4.1 |
2.1 |
2.8 |
10.9 |
6.1 |
|
Death and disability claims |
0.8 |
1.0 |
1.0 |
0.9 |
1.0 |
1.0 |
1.7 |
2.0 |
2.3 |
2.6 |
2.6 |
|
Bankruptcy claims |
0.9 |
1.0 |
0.3 |
0.1 |
0.2 |
0.2 |
1.7 |
5.5 |
0.5 |
0.1 |
0.7 |
|
FISLP default claims |
2.0 |
0.9 |
0.5 |
0.4 |
0.3 |
0.3 |
0.2 |
0.2 |
0.1 |
0.1 |
0.1 |
To guaranty agencies |
|
|
|
|
|
|
|
|
|
|
|
|
Administrative cost allowance |
3.0 |
2.7 |
2.8 |
2.6 |
2.4 |
1.7 |
2.6 |
3.5 |
6.1 |
3.9 |
2.6 |
|
Loan advances |
0.4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Reinsurance default claims |
31.4 |
34.5 |
36.5 |
36.8 |
44.0 |
53.1 |
53.3 |
52.7 |
46.8 |
41.8 |
43.6 |
|
Refund of excess reserves |
- |
- |
- |
- |
- |
- |
0.1 |
0.3 |
- |
- |
- |
Collections cost* |
|
|
|
|
|
|
|
|
|
|
|
|
Collections cost |
0.2 |
0.5 |
0.6 |
0.3 |
0.2 |
0.2 |
0.2 |
0.2 |
1.0 |
2.1 |
2.2 |
Total federal program outlays |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
- Not applicable. */ Costs from FY86-FY96 include FFEL program and FISLP as well as computer costs and commissions on contract collections. NOTE: Calculations are based on numbers before rounding. SOURCE: U.S. Department of Education, Office of Postsecondary Education, compiled data. |
Federal outlays to lenders
Federal outlays to lenders include interest benefits, special allowances, death and disability claims, bankruptcy claims, and Federal Insured Student Loan Program (FISLP) default claims.
- In FY86-FY91, interest benefits paid to lenders fluctuated between $1.5 and $1.7 billion. Between FY92 and FY96, interest benefits increased by approximately $1.0 billion (from $1.7 to $2.7 billion). In FY96, interest benefits paid to lenders accounted for 42.1 percent of total federal expenditures. (See table A.)
- Special allowances increased each year between FY87 and FY89, reaching a peak of $1.4 billion in FY89 and FY90. However, special allowances decreased by 72.6 percent between FY90 and FY96. By FY96, special allowances accounted for 6.1 percent of total federal outlays. (See table A.)
- Death and disability claims increased each year between FY86 and FY96. The greatest annual increase occurred in FY92 when $94 million was paid to lenders, 51.6 percent more than FY91. In FY96, death and disability claims accounted for 2.6 percent of total federal outlays. (See table A.)
- Bankruptcy claims paid to lenders fluctuated between FY86 and FY96, ranging from a low of $4 million in FY95 to a high of $279 million in FY93. The greatest annual increase in bankruptcy claims occurred in FY96 when there was a 10-fold increase over the previous year. The greatest annual decrease occurred in FY94 (90.8 percent). In FY96, bankruptcy claims accounted for 0.7 percent of total federal outlays. (See table A.)
- FISLP default claims paid to lenders decreased from $80 million in FY86 to $6 million in FY95 then increased to $8 million in FY96. FISLP default claims accounted for 0.1 percent of all federal outlays in FY96. (See table A.)
Federal outlays to guaranty agencies
Federal outlays to guaranty agencies include administrative cost allowances, loan advances, reinsurance default claims, and refunds of excess reserves.
- In FY86-FY96, annual administrative cost allowances fluctuated from a low of $92 million in FY87 to a high of $312 million in FY94. Annual administrative cost allowances decreased considerably in FY95 and FY96 (29.3 and 24.3 percent, respectively). In FY96, administrative cost allowances accounted for 2.6 percent of total federal outlays. (See table A.)
- Loan advances to guaranty agencies were $16 million in FY86, but were not reported any year thereafter. (See table A.)
- In FY86-FY96, reinsurance default claims fluctuated from a low of $1.3 billion in FY86 to a high of $3.2 billion in FY91. In FY96, reinsurance default claims represented 43.6 percent of total federal outlays. (See table A.)
- Refunds of excess reserves were only reported in FY92 and FY93, when they increased from $8 to $14 million. Collections cost
- Collection cost increased more than 12 times between FY86 and FY96. Collection costs increased from $10 million in FY86 to $23 million in FY88, then decreased to reach $8 million in FY93. In FY94, collection costs rose dramatically to $50 million, and continued to rise, reaching $138 million in FY96. Federal income/receipts: Federal income includes FISLP insurance premium, FISLP collections, guaranty agency reimbursements, advances returned, excess reserves, reinsurance fees, origination and other fees, IRS offsets-DCS assigned loans, IRS offsets-GA, mandatory assignments, and rehabilitation loans.
- The total federal income/receipts for FFEL program increased annually between FY86-FY96. The largest increase occurred in FY94 when total income increased by 52.3 percent from the prior year (from 2.5 to 3.1 million). By FY96, total federal income had increased by 360.8 percent from FY86. (See table B.)
Table B-Federal income sources as a percent of total federal income/receipts: FY86-FY96
(Subset of table 1)
|
FY86 |
FY87 |
FY88 |
FY89 |
FY90 |
FY91 |
FY92 |
FY93 |
FY94 |
FY95 |
FY96 |
Federal income/receipts |
|
|
|
|
|
|
|
|
|
|
|
|
FISLP collections |
10.20% |
11.70% |
7.80% |
6.30% |
4.40% |
3.50% |
2.20% |
2.60% |
1.80% |
1.50% |
1.70% |
|
Guaranty agency reimbursements |
28.7 |
33.5 |
29.3 |
31.6 |
32.9 |
29.5 |
30.4 |
32.3 |
18.5 |
26.2 |
27.4 |
|
Advances returned |
1.3 |
0.9 |
8.4 |
1.4 |
1.2 |
0.6 |
0.1 |
0.1 |
0.0 |
0.0 |
0.0 |
|
Excess reserves |
- |
- |
1.1 |
11.4 |
2.9 |
0.1 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Reinsurance fees |
- |
- |
4.7 |
4.6 |
3.6 |
2.4 |
3.3 |
2.0 |
1.8 |
0.1 |
0.0 |
|
Origination and other fees |
47 |
40.7 |
35.0 |
30.5 |
34.1 |
35.4 |
28.6 |
30.9 |
43.8 |
34.6 |
29.9 |
|
IRS offset - DCS assigned loans |
7.8 |
3.8 |
2.2 |
1.2 |
1.6 |
1.0 |
1.5 |
2.1 |
8.4 |
7.7 |
6.6 |
|
IRS offset - GA |
5.0 |
9.5 |
11.5 |
13.1 |
18.6 |
26.2 |
31.5 |
25.1 |
15.2 |
10.6 |
9.7 |
|
Mandatory assign. coll. |
- |
- |
- |
- |
0.4 |
0.9 |
2.0 |
4.8 |
10.5 |
18.5 |
24.2 |
|
Rehabilitation loans |
- |
- |
- |
0.1 |
0.2 |
0.5 |
0.4 |
0.2 |
- |
0.9 |
0.5 |
Total federal income/receipts |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
-Not applicable. NOTE: Calculations are based on numbers before rounding. 0.0 indicates a number less than 0.05. SOURCE: U.S. Department of Education, Office of Postsecondary Education, compiled data. |
- The two major sources of FFEL program federal income are origination and other fees and guaranty agency reimbursements. In FY96, for example, federal income from guaranty agency reimbursements was $904 million and income from origination and other fees was $986 million. Total receipts in FY96 were $3.3 billion or 16.5 percent of the cumulative total receipts for the FFEL program ($20.0 billion). (See table B.)
- Annual FISLP collections ranged from $33 million in FY92 and $93 million in FY87. Income from FISLP collections contributed a decreasing proportion of the annual total federal receipts between FY86-FY96, (10.2 and 1.7 percent, respectively). (See table B.)
- Annual income from guaranty agency reimbursements increased, overall, between FY86 and FY96 (341.0 percent). However, annual receipts from guaranty agency reimbursements contributed a smaller proportion of the annual federal income in FY94-FY96 than was contributed in the previous years. Annual receipts from guaranty agency reimbursements ranged from 28.7 to 33.5 percent of the annual total federal income between FY86-FY93 and from 18.5 to 27.4 percent between FY94-FY96. (See table B.)
- In FY88, income from returned advances contributed 8.4 percent of total federal income, the greatest amount reported between FY86-FY96 ($82 million). Annual income from returned advances for all other fiscal years was less than 1.5 percent of total federal income. Annual income from returned advances decreased each year subsequent to FY88 and was less than $500,000 in FY94-FY96. (See table B.)
- Excess reserves, reported for FY88-FY96, peaked at $127 million in FY89 (over 10 times the amount reported in FY88). Income from excess reserves decreased by 73.2 percent in FY90 and continued to decrease each year thereafter. In FY89 and FY90, income from excess reserves comprised 11.4 and 2.9 percent, respectively, of total federal income. For all other fiscal years, income from excess reserves comprised 1.1 percent or less of total federal income. (See table B.)
- Between FY86-FY96, annual receipts from origination and other fees increased by 193.5 percent. The greatest annual increase occurred in FY94 when origination and other fees increased by 116.3 percent. Annual income from origination and other fees contributed 47.0, 40.7, and 43.8 pecent of total federal income in FY86, FY87, and FY94, respectively. In all other fiscal years, the annual proportion of federal income from origination and other fees ranged from 28.6 to 35.4 percent. (See table B.)
- Annual federal income from IRS offset-DCS assigned loans fluctuated in FY86-FY96 with a dramatic increase in FY94 (502.9 percent).
- Annual federal income from IRS offset-GA increased between FY86-FY92 and decreased between FY93-FY96. Annual income from this source (31.5 percent) was greater than income from all other sources in FY92 when IRS offset-GA peaked at $466 million.
- Mandatory assignment collections, initiated in FY90, increased dramatically between FY90 and FY96 (from $5 to $799 million).
- Income from rehabilitation loans was received in all fiscal years subsequent to FY89. Annual income from this source ranged from less than $500,000 in FY94 to $27 million in FY95 and comprised less than 1 percent of the total federal income for each of the fiscal years reported.
Cash outlays over receipts
- The total cash outlays over receipts (total federal outlays minus total federal income) increased each year between FY87-FY91, peaking in FY91 at $4.9 billion. Between FY92-FY95, federal outlays over receipts decreased each year reaching the lowest level in FY95 ($2.6 billion), then increased in FY96 by 19.8 percent to 3.1 billion.
Table 1. Federal Family Education Loan (FFEL) program executive summary: FY66-FY96
Table A-1. Federal Family Education Loan (FFEL) program executive summary: FY66-FY96
Graph 1a. Federal Family Education Loan (FFEL) program commitments: FY86-FY96 (Number of loans)
Graph 1b. Federal Family Education Loan (FFEL) program commitments: FY86-FY96 (Dollar amount)
Graph 1c. Federal Family Education Loan (FFEL) program commitments: FY86-FY96 (Average loan)
Graph 1d. Federal Family Education Loan (FFEL) program total federal outlays and income/receipts: FY86-FY96 (Total federal outlays to lenders and to guaranty agencies)
Graph 1e. Federal Family Education Loan (FFEL) program total federal outlays and income/receipts: FY86-FY96 (Total federal income/receipts)
Graph 1f. Federal Family Education Loan (FFEL) program total federal outlays and income/receipts: FY86-FY96 (Cash outlays over receipts)
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Foreword
Table 2