The Federal Credit Reform Act of 1990 requires the costs of all federal direct and guaranteed loans to be recorded on an accrual, or credit-reform, basis rather than on a cash basis. In accrual accounting, estimates of both costs and any resulting receipts—that is, the net cost—are recorded when the government makes a commitment rather than when actual payments are made or received. On that basis, CBO estimates that, in 2021, student loan programs will generate net receipts of $1.4 billion from loans and guarantees, while incurring $3.2 billion in administrative costs.
