Handling Default

Frequently Asked Questions

At TG, we often hear the same questions from many different borrowers. Here are some frequently asked questions with the answers that might be just what you're looking for.

I can't pay my loan. What do I do now?
What is TG and how does its role differ from that of my servicer?
What does default mean?
What does claim pending mean?
What is a deferment? What deferments are available?
What is a forbearance?
What is interest capitalization?
I sent my deferment/forbearance/payment, but my lender or servicer didn't receive it. What should I do? Will my loan default?
I am in school. Why am I getting billed? How can I be delinquent? What can I do?
My dependent student for whom I took out a loan is still in school. Why am I getting billed? How can I be delinquent? What can I do?
You keep calling my relatives! Why?
Who handles reports to credit agencies?
I have just filed for bankruptcy and I'd rather collectors speak with my attorney. What should I do?
Where are my loans?
Questions about default prevention?

I can't pay my loan. What do I do now?

Contact your lender, servicer, or TG and explain that you cannot pay and why. We might be able to help you. Numerous repayment options are available.

What is TG and how does its role differ from that of my servicer?

TG is the guarantor of your student loan(s). If you are at least 270 days delinquent, your lender may file a default claim with TG for repayment of your loan. TG is then obligated to pay your lender the remaining balance of interest and principal you owe, provided your lender meets certain requirements under federal guidelines. Your servicer works with and for your lender to bill, collect, and provide you with information pertinent to your loan. If TG pays a claim on your loan, TG becomes responsible for collecting your loan on behalf of the federal government.

What does default mean?

If you fail to meet the terms of your loan and make your scheduled payments, your loan will eventually go into default. After you are 270 days late, or delinquent, your lender can file a claim with the guarantor of your student loan(s). This means that the guarantor will pay the money you owe to your lender. The guarantor then will be able to compel you to repay the loan you owe through a variety of options.

What does claim pending mean?

Claim pending means the guarantor hasn't yet paid the lender's claim, and it might be possible for you to avoid the consequences of default. However, you must act immediately because once your lender files a claim, there are only a few days before the guarantor will pay the claim.

What is a deferment? What deferments are available?

A deferment allows you to postpone the payment of your loan. You are entitled to defer your student loan payments when certain eligibility criteria are met and you request a deferment. There are nine deferment forms available that cover many deferment types. The most common deferments are in-school, unemployment, economic hardship, graduate fellowship, and rehabilitation training. To apply or get further information about deferment, contact your lender, servicer, or TG. You also can get information and download the correct deferment forms from TG Online.

What is a forbearance?

Forbearance is a period of time during which a lender permits a borrower to temporarily cease making payments, to make reduced payments, or to delay payments. Forbearances are usually granted at the discretion of the lender. The borrower is responsible for the interest that accrues; and, if unpaid, the interest may be capitalized. Forbearances are often used to bring delinquent loans current in situations where there is a legitimate financial hardship, but the borrower doesn't qualify for a deferment.

What is interest capitalization?

Capitalization means that a lender adds the interest that accumulates on a loan to the outstanding principal balance, increasing the total amount owed (or the balance) on the loan. After that, interest is charged on the new total principal balance.

I sent my deferment/forbearance/payment, but my lender or servicer didn't receive it. What should I do? Will my loan default?

If your lender didn't receive your deferment or forbearance form, contact a lender representative as soon as possible. Request a copy of the appropriate form by fax and fax the completed form back to the lender. You can also download the deferment forms from TG Online. If your lender didn't receive a payment, contact the lender as soon as possible. Tell the representative the amount of payment, when you mailed it, and the check or money order number. If the payment was a check, ask your bank if and when it cleared. If it did clear, provide this information to the lender along with a copy of the front and back of the check if possible. You might be asked to do the same with a money order. Write legibly on all correspondence and keep copies. Your lender can file a claim with the guarantor if the deferment, forbearance, or payment is not received and your loan(s) becomes at least 270 days delinquent.

I am in school. Why am I getting billed? How can I be delinquent? What can I do?

If you are in school and getting billed for your student loan(s), you probably transferred schools, dropped below half time, or are attending school beyond your anticipated graduation date. You should contact your lender and provide proof of your in-school status whenever your circumstances change. If you fail to do so, then your lender expects you to pay when your grace period is scheduled to end.

My dependent student for whom I took out a loan is still in school. Why am I getting billed? How can I be delinquent? What can I do?

If you took a parent PLUS loan for your dependent student and he or she is still in school and you are getting billed for the loan(s), be sure your lender received your request to defer payments until six months after your student ceased to be enrolled at least half time. If your student has transferred schools, or is attending school beyond his or her anticipated graduation date, contact your lender and provide proof of his or her at least half-time, in-school enrollment. If your student has dropped below half-time enrollment, contact your lender for other options.

You keep calling my relatives! Why?

When you signed your promissory note, you supplied the names, addresses, and phone numbers of relatives and friends so that in the event we are unable to contact you, we can leave a message for you and hopefully obtain your new address and phone number.

Who handles reports to credit agencies?

Federal regulations require your lender to report your loan and repayment information to credit agencies. If TG pays a default claim, federal regulations require TG to report the default to all national credit agencies.

I have just filed for bankruptcy and I'd rather collectors speak with my attorney. What should I do?

Provide your attorney's name and telephone number to the collectors when they contact you. The case number, city filed in, date filed, and chapter are helpful but not necessary. However, the more information you can provide, the faster the collection attempts will stop.

Where are my loans?

Call TG Default Prevention: (800) 338-4752.

We can track all the loans that TG has guaranteed. The financial aid office at your school can help track loans with other guarantors. You can also get information from TG's Adventures In Education web site.

(800) 338-4752
Monday - Thursday 8 a.m. - 9 p.m.,
Friday 8 a.m. - 5 p.m., Saturday 9 a.m. - 1 p.m.
(512) 219-4630 (fax)
Send e-mail to tgcares@tgslc.org

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