Federal Credit

The U.S. government uses federal credit (direct loans and loan guarantees) to allocate capital to a range of areas including home ownership, student loans, small business, agriculture, and energy. A direct loan is 'a disbursement of funds by the government to a nonfederal borrower under a contract that requires the repayment of such funds with or without interest.' A loan guarantee is 'a pledge with respect to the payment of all or part of the principal or interest on any debt obligation of a non-federal borrower to a non-federal lender.' At the end of FY2011, outstanding federal direct loans totaled $838 billion and outstanding guaranteed loans totaled $2,017 billion. This book describes the concepts, budgetary treatment and reform proposals of federal credit.