TG Updates

TG to subsidize federal default fee on behalf of students

TG will subsidize the 1 percent federal default fee for federal Stafford and PLUS loans on behalf of student and parent borrowers for the 2006-07 Award Year (loans guaranteed through June 30, 2007). TG's board of directors last week approved the subsidy, which is expected to provide about $35 million in savings to more than 500,000 borrowers over the next year.

The recently enacted Deficit Reduction Act (Public Law 109-171) requires guarantors to deposit 1 percent 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 will evaluate the continuation of this subsidy beyond the next award year by spring 2007.

"TG has been able to provide $150 million in savings to more than 1.2 million borrowers over the past seven years through its guarantee fee waiver," said Albon Head, chair of TG's board of directors, "We are delighted that by subsidizing this fee, we can continue to provide students with additional funds to apply directly to their educational expenses."

TG's President and CEO, Sue McMillin, pointed out that TG's subsidy of the federal default fee will not compromise the exceptional customer service and products for which TG is known.

"We are pleased to have the opportunity to assist students and families through this direct benefit to education loan borrowers," McMillin said. "At the same time, we are mindful of our obligation to maintain the financial integrity and stability of the Federal Family Education Loan Program for generations to come."

Back to Top

TG offers student financial literacy and retention workshops nationwide

Spring is a good time for schools to explore new ways to improve their student retention and graduation rates by strengthening their campus-student connections and sharpening their students' financial literacy skills.

Over the next few months, TG will offer workshops across the country that will address these issues as part of TG's Positive+Balance™ program, an initiative that focuses on the connection between debt management and student success — both on campus and after graduation.

The workshops will be provided at no cost to attendees and will provide opportunities for higher education and financial aid professionals to:

• Examine cumulative default rates and learn why student loan default may still be an issue for a campus despite current cohort default rates,
• Learn why developing a successful financial literacy program on your campus will help students succeed in school and after graduation and how TG's Positive+Balance program can help, and
• Understand campuses' current practices for helping students succeed and how to incorporate new strategies for even greater results.

"By sharing information and expertise about proven debt management strategies with campuses that are actively seeking to help students develop financial literacy skills, we are confident that we can help inspire positive change. This change not only affects campuses, it has the potential to transform students' lives for the better as well," said Sue McMillin, TG president and CEO.

Workshop dates and locations

• May 3 — Texas A&M University-Kingsville, Kingsville, Texas
• May 18 — Embassy Suites-Kansas City Plaza, Kansas City, Missouri
• May 23 — Wyndham Denver-Tech Center, Denver, Colorado
• May 25 — Tallahassee Community College, Tallahassee, Florida
• June 9 — Courtyard Marriott, Montgomery, Alabama
• June 15 — Hampton Roads Convention Center, Hampton, Virginia
• June 23 — Las Cruces Hilton, Las Cruces, New Mexico
• June 28 — Northwood University, Cedar Hill, Texas
• June 30 — University of Texas at San Antonio Main Campus, San Antonio, Texas

Learn more
The Positive+Balance workshops are free, but registration is required. To find out more and to register, visit www.tgslc.org/positivebalance or send an e-mail message to positivebalance@tgslc.org.

Back to Top

Question of the week

Q: Is a borrower still responsible for repaying his or her loan when the school that the student has been attending has stopped offering the student's program of study but did not close?

A: Yes, the borrower is still responsible for repaying his or her loan. The closed school loan discharge program pertains only to cases in which a student's entire school closes, not to cases in which a student's individual program of study is discontinued.

Do you have a question?
If you have a question that needs an answer, feel free to Ask TG™. Ask TG is TG's online query tool for borrowers, schools, and lenders. Ask TG includes a database of frequently asked questions about financial aid, student loan processing, and TG's products and services. To submit a question to Ask TG, visit http://tgslc.custhelp.com.

Back to Top