TG Updates

TG Finds Community College Transfers Lower-Risk Borrowers Than Expected

A recent study conducted by TG could change perceptions about how transfer students affect school cohort default rates. In the past, community college transfers were considered high-risk borrowers, and it was assumed that they defaulted at rates similar to those of the colleges from which they transferred. However, TG's study showed that while community college default rates still tend to be relatively high, transfer borrowers default at a lower rate—similar to that of borrowers at four-year institutions.

"The results of this study suggest that transfer borrowers do not increase the risk of a lender's, school's, or guarantor's default rate any more than the typical four-year public school borrower," said Jeff Webster, TG's Assistant Vice President for Research and Analytical Services. "This falls in line with previous research that has shown that staying in school lowers a borrower's risk of default. But until now, we didn't know if transfer students would follow the same pattern."

Charissa Bird, TG Research Specialist, compiled and analyzed the data for the report. She concludes from the study that lenders and schools may not need to be as cautious about the impacts of transfer student borrowers upon their institutions' default rates.

"Our findings may encourage financial aid professionals to reexamine their borrowing and enrollment policies," said Bird. "Transfer students seem to stick to their academic goals, putting them in contrast to typical two-year student borrowers who tend to drop out at very high rates."

The results of this study could open new doors for transfer students. Skip Landis, Ph.D., Director of the Biomedical Science program housed in the College of Veterinary Medicine at Texas A&M University, said he was "pleasantly surprised" about the report findings.

Landis feels the study will serve students well. "I didn't realize the default rates would be that low—based on information previously published," said Landis. "Having some perspective from the academic side as well as the financial aid side, I can see that this may affect how and where universities recruit transfer students."

More Information and Questions
To view a graph comparing 1996-1999 default rates for 2-year schools, 4-year schools, and students who transfer to 4-year schools, see the TG press release dated February 12 in the TG Newsroom at www.tgslc.org/newsroom/news/2002/press020212.cfm.

For questions about the research, contact Charissa Bird at (800) 252-9743, ext. 2837, or send an e-mail message to charissa.bird@tgslc.org.

Back to Top

A Day in the Life…A New Series from TG

Shoptalk Online kicks off a new series this month: A Day in the Life. The articles in this series will focus on TG's internal teams and how they interact with TG's customers and partners. The articles will appear in a sequence that mirrors the life of a loan and begins, in Financial Aid Awareness Month, with information about TG's Educational Alliances' awareness team. Before you meet one of the Educational Alliances team members, check out the following summary that describes what this team is all about.

The Message
The first step in obtaining a postsecondary education is to learn about the opportunities that education offers. For most students, the second step is finding out about the availability of financial aid and how to obtain it.

To help families and students take these initial steps toward higher education, TG's Educational Alliances works to disseminate educational and financial aid awareness information throughout the community. Here are some of the ways in which this team does that:

• Through a variety of interactions with the community, such as presentations and exhibits at various conferences.
• Through collaborative efforts with existing federal, state, and community organizations and TG business partners that offer opportunities to reach particular segments of the community.
• Through targeted messages to specific audience groups with differing needs
.

The Right Audience at the Right Time
While spreading the awareness message, the Educational Alliances team focuses on two aspects of awareness programs: reaching various segments of the population with the right information and delivering it at appropriate times. Here are some ideas the group keeps in mind when delivering awareness information:

• Critical decision points are occurring earlier and earlier.
• Timing of information delivery is important, especially for underserved populations.
• Focus on what's possible.
• Promote education as an investment in the future.
• Point families and students to the "free" money first.

Projects and Tools
Multiple teams throughout TG support awareness efforts by providing their own special expertise. Here are a few examples:

• TG Communications: Adventures In Education (www.AdventuresInEducation.org or www.AIE.org) and development of other materials in print and electronic format.
• TG Customer Assistance: Responds to borrower inquiries about financial aid, makes presentations, and offers their expertise to help promote financial aid awareness; also operates as the Texas Financial Aid Information Center.
• Applying for Financial Aid: The FAFSA Process: A nationally televised teleconference that offers step-by-step guidance on completing the FAFSA (last live broadcast on February 7, 2002).

More Insight
Now, gain more insight from Richard Sapp, TG's Director of Awareness Programs, and find out more about the efforts of TG's Educational Alliances team to help families and students make sound decisions by linking to "A Day in the Life of Educational Alliances' Awareness Programs."

Back to Top