The federal government supports some private activities such as home ownership, postsecondary education, and certain commercial ventures—through credit assistance offered to individuals and businesses. Some of that assistance is in the form of direct federal loans, and some is through federal guarantees of loans made by private financial institutions. At the end of the fiscal year 2011, about $2.7 trillion was outstanding in such federal direct loans and loan guarantees. The cost of providing credit assistance is an important consideration for policymakers as they allocate spending among programs and choose between credit assistance and other forms of aid such as federal grants—but assessing cost is not a simple matter. Indeed, it is more difficult to measure the cost of credit assistance than to assess the costs of other forms of aid because the measurement of the cost of credit assistance must account for future cash flows of uncertain amounts that can continue for many years. According to the rules for budgetary accounting prescribed in the Federal Credit Reform Act of 1990 (FCRA, incorporated as title V of the Congressional Budget Act of 1974), the estimated lifetime cost of a new loan or loan guarantee is recorded in the budget in the year in which the loan is disbursed. That lifetime cost is generally described as the subsidy provided by the loan or loan guarantee. It is measured by discounting all of the expected future cash flows associated with the loan or loan guarantee including the amounts disbursed, principal repaid, interest received, fees charged, and net losses that accrue from defaults to a present value at the date the loan is disbursed.