The Federal Family Education Loan (FFEL) program guarantees loans for postsecondary education to students and their parents at a limited interest rate. However, limiting borrowers' rates creates a danger that lenders will not be willing to participate in the program if their costs of financing and servicing the loans exceed the interest rates they may charge borrowers. To avoid that situation, the government generally supplements the borrowers' interest payments with additional quarterly payments to meet a target interest rate (or lender yield), which is an indicator of lenders' costs. The amounts that lenders receive from borrowers and the government depend on formulas specified in law and on the current level of two market interest rates, one used to calculate what borrowers pay and the other used to calculate the target yield for lenders, which determines what the government pays. This report describes the method the Congressional Budget Office (CBO) uses to estimate the sources of lenders' interest income on student and parent loans in the Federal Family Education Loan program. That method accounts for the likely values of future interest rates and specific program rules, including those for setting borrowers' rates and for calculating the government's supplemental payments. Includes the following appendix: Federal Student Loan Programs. (Contains 3 tables and 7 footnotes.)