Guarantee agencies and their financing are discussed in order to increase awareness of their role and to provide information for policy decisions. Information is provided on: the history of the Guaranteed Student Loan (GSL) program, sources and uses of funds by state guarantee agencies for fiscal years (FY) 1982 and 1984, federal advances repaid and outstanding for FY 1984, federal reinsurance of guarantee agency loan defaults, agency insurance premium policies by state, and reserves by state. It is concluded that some federal subsidies can probably be withdrawn without creating undue difficulties for state guarantee agencies, though other cutbacks would be more problematical. It is suggested that federal advance funds could be recalled if transition or alternative arrangements were made for a few (mostly new) agencies that could demonstrate real hardship from the loss of these funds. The loss of administrative cost allowances, however, especially if coupled with the recalling of advances, would create financial problems for many agencies. These problems would be exacerbated if other aspects of GSL, such as reinsurance, were also subject to revision. Several steps are suggested that might enhance the chances of finding federal cost savings without crippling the crucial functions performed by guarantee agencies in the student loan program. (SW)