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Contact:
Michael Gee
TG
(512) 219-4606
(800) 252-9743, ext. 4606
michael.gee@tgslc.org
December 7, 2007
TG to continue to subsidize federal default fee on behalf of students
Round Rock, TX — TG's board of directors today voted to continue to subsidize the 1 percent federal default fee for federal Stafford and PLUS loans for student and parent borrowers for the 2008-2009 award year.
The decision will result in savings for more than 500,000 borrowers whose loans are guaranteed by TG between July 1, 2008 and June 30, 2009, regardless of which postsecondary school a student attends or of the financial institution issuing the loan.
This is the third consecutive year that TG will subsidize the federal default fee. TG has helped more than 2.2 million borrowers through the waiver and subsidization of guarantee and federal default fees since 1999.
"Subsidizing the federal default fee provides a direct benefit to borrowers," said Sue McMillin, TG's president and CEO. "This decision by our board of directors also reflects TG's commitment to help reduce expenses for students, many of whom must overcome economic obstacles and other societal factors in order to have access to college."
The Deficit Reduction Act (Public Law 109-171) requires guarantors to deposit 1 percent of the amount of loans guaranteed and disbursed on or after July 1, 2006, into the federal fund. The federal fund is owned by the federal government and covers its risk associated with student loan default. TG's board of directors carefully determines whether to continue this subsidy before each award year.
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About TG: TG is a public, nonprofit corporation that helps create access to higher education for millions of families and students through its role as an administrator of the Federal Family Education Loan Program (FFELP). Its vision is to be the premier source of information, financing, and assistance to help all families and students realize their educational and career dreams. Additional information about TG can be found online at www.tgslc.org. This press release can be downloaded from www.tgslc.org/newsroom/.