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Consolidation Application and Promissory Note

There are many reasons why a borrower may apply for a Consolidation loan. A borrower may seek a Consolidation loan to merge several types of federal student loans with varying repayment terms into a single loan. Or a borrower may seek a Consolidation loan in an effort to lower monthly payments or extend the repayment period.

TG Consolidation Policy
Effective April 30, 2007, TG has modified its Consolidation loan policy to accept all eligible Consolidation loans for guarantee, regardless of whether they include at least one underlying loan guaranteed by TG, or one Federal Direct loan.

Consolidation Forms
A borrower with federal student loans completes the Consolidation Loan Application and Promissory Note to merge some or all of these loans into a single loan, simplifying repayment.

The consolidation loan forms include an application the borrower must complete to apply for the loan and a promissory note to secure the debt. The forms also provide the borrower with instructions for completing the forms, important information regarding the borrower's rights and responsibilities, and an overview of the loan process.

Two versions of the Consolidation Application and Promissory Note and Instructions are provided below. The first is Standard, which lists the required standard, graduated, income-sensitive, and extended repayment options for borrowers. The second is Lender-specific, which allows a lender to revise section E of the application and instructions to include specific information on repayment plans offered by the lender.

A borrower completes the Additional Loan Listing sheet only if he or she needs more room to list loans than is available on the application and promissory note.

A borrower completes the Request to Add Loans only if he or she discovers that some federal loans that the borrower wanted included in the Consolidation loan were not included. The Request to Add Loans must be completed by the borrower and received by the lender within 180 days of the consolidation.

A borrower's loan holder(s) completes the Loan Verification Certificate to provide the consolidating lender with information needed to pay off the borrower's loan(s) and to certify continued eligibility.

A lender may supply the borrower with the optional Repayment Information available from TG or may supply customized information directly related to the lender's services and benefits.

The Addendum to the Consolidation Loan Application and Promissory Note discloses changes to Consolidation loan terms and conditions required by the College Cost Reduction and Access Act of 2007 (CCRAA). When the Consolidation Loan Application and Promissory Note and the Consolidation Loan Application and Promissory Note Addendum have conflicting information, the Addendum takes precedence.

Usage
This latest version of the Consolidation Application and Promissory Note below was approved in March 2007 and has now been fully implemented.

The Addendum to the Consolidation Loan Application and Promissory Note must be used with the Consolidation Loan Application and Promissory Note until new forms are approved by the U.S. Department of Education.

TG Proprietary Forms
Consolidation loan add-ons and adjustments can be reported to TG Loan Guarantee Operations by either hardcopy or CAM Record Type 18 (add-ons and increase adjustments only). Consolidation loan adjustments are defined as increases or decreases to the consolidation loan guarantee amount due to an underpayment or overpayment of an underlying loan balance. The following three forms allow lenders and servicers the ability to manually report consolidation loan add-ons, increase adjustments, or decrease adjustments:

Forms on this page require Adobe Acrobat Reader to view and print. For an important notice and further information, please visit our PDF Help Page.


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© 2008 Texas Guaranteed Student Loan Corporation