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Shoptalk Online Contents

Federal Updates

TG Updates

Trends and Issues

Shoptalk Online 461, July 1, 2008

TG Updates

Making the training difference: Join TG at this year's NASFAA Conference

TG's training sessions at this year's NASFAA National Conference focus on an assortment of timely financial aid topics, including regulatory changes, financial literacy, student retention, and lender list creation.

TG presenters will be leading discussions or moderating sessions, offering an informal setting for audience members to ask questions on issues important to them.

Varied agenda
For this year's conference, TG constructed a program of sessions with something for every financial aid professional — from the latest regulatory changes to financial literacy research.

Regulatory training: TG's Kelly Kaelin will be co-presenting two regulatory sessions — Policy Potpourri (Sunday, July 6; 2:30 p.m.) and Regulatory Perils in Graduate/Professional Aid (Monday, July 7; 2:45 p.m.) — with Gordon "Dino" Koff, director of financial aid, Dartmouth Medical School. Audience members will learn their regulatory facts by competing informally in a friendly game of knowledge. The focus is on practical regulatory information and interactive learning.
Financial literacy: A special session — Advancing Student Success Through Financial Know-How (Monday, July 7; 9:00 a.m.) — assembles a panel of experts to discuss what their campuses offer in the way of financial literacy services for low-income and first-generation college students. The panel will discuss relevant research and consider programs that promote financial literacy, financial planning, and smart borrowing. (Co-presenters: Linda Gonzalez-Hensgen, financial aid director, El Paso Community College; Mary McKinney, executive director, financial aid, University of Central Florida; Tommy Sims, corporate director, default management, Colorado Technical University; Francisco Valines, director of financial aid, Florida International University; and Anne Walker, financial aid director, Rice University; moderator: Jacob Fraire, TG assistant vice president of educational alliances)
Student retention: The Face of Change: Shifting Demographic Trends and the Impact on Student Aid Offices (Monday, July 7; 9:00 a.m.) considers important demographic trends in the Hispanic population that higher education administrators must address. A panel of financial aid administrators will discuss how these changes are affecting their campuses, and then lead a discussion on creating effective financial aid packages for first-generation students; understanding the effects working while in college have on low- to middle-income students; and managing the potential impacts of loan default for a changing population. (Co-presenters: Linda Ballard, associate financial aid director, Texas Southern University; Jon Riester, associate dean, admission and financial assistance, Hanover College; Bill Spiers, director of financial aid, Tallahassee Community College; and Jeff Webster, TG assistant vice president for research and analytical services)
Lender list creation: TG offers a special training session at the NASFAA Conference titled, Automating Your Lender Selection Process (Monday, July 7; 2:45 p.m., and Tuesday, July 8; 10:15 a.m). The session is designed to provide financial aid professionals with a discussion of preferred lender lists (PLL). Among other things, the session offers an overview of current issues; examines why schools elect to use a PLL; suggests practices for handling the creation of a PLL; and provides a preview of TG's forthcoming lender survey tool — List Assist^SM. This session will be presented by Margie Harvey, TG market strategist.

More information
Stop by the TG booth (#432) to learn the latest about TG's products and services. To learn more about the conference, and to view the agenda, visit NASFAA National Conference 2008. Find out about TG's regulatory training offered through the TG Speakers Bureau by reviewing the online training catalog at www.tgslc.org/speakers/basics.cfm.

TG's June Edufacts™: Few students graduating with skills to manage finances well

TG's latest Edufacts™ considers some sobering news on the money management skills of high school seniors. Many of today's students are graduating with the equivalent of an "F" in financial literacy. Basic concepts of saving, investing, and using credit wisely elude many students, according to a biennial test administered by the Jump$tart Coalition for Personal Financial Literacy®.

The latest test was given to over 6,800 seniors from high schools in 40 states. High school seniors have scored consistently low since the test was first administered in 1997. Students responded correctly to about 57 percent of the questions that year — the highest score. Grades on this year's survey showed a marked decline — down to 48 percent.

Students continue to be challenged by a range of financial concepts. Some 42 percent understood that sales tax actually adds to the cost of a purchase. Less than 49 percent correctly said that someone who pays the minimum amount on a credit card will pay more in finance charges than someone who pays the entire balance. And only 17 percent answered that stocks are likely to yield better returns than savings bonds.

Many colleges recognize that low financial literacy is an issue for their students, especially incoming freshmen. Financial aid offices regularly field questions on a variety of rudimentary financial skills, including how to budget or how to build good credit. A growing number of financial aid officers have begun connecting financial literacy with a student's long-term ability to thrive in college and in a career.

To learn more
To read the complete edition of this Edufacts, visit www.tgslc.org/edufacts/2008/edufacts_0608.cfm.

Stay on top of loan interest rates with TG poster

The College Cost Reduction and Access Act of 2007 (CCRAA) made a number of significant changes to federal student loan programs, including cutting interest rates for certain subsidized Stafford loans.

Effective today, July 1, 2008, the fixed interest rate for undergraduate subsidized Stafford loans (FFEL and Direct) has changed. For loans first disbursed on or after July 1, 2008, and before July 1, 2009, the rate is 6.0 percent. As this applies only to undergraduate students, the interest rate for subsidized Stafford loans for graduate students remains at 6.8 percent. The interest rate for unsubsidized Stafford loans for both undergraduate and graduate students also remains at 6.8 percent.

The interest rate on FFELP PLUS loans first disbursed on or after July 1, 2006, is fixed at 8.5 percent. This interest rate remains the same.

TG offers a poster to remind you of the new subsidized Stafford loan interest rate, the unsubsidized Stafford loan interest rate, and the PLUS interest rate. The poster is a simple and convenient way to inform borrowers of interest rates on federal student loans.

To order
You can order the interest rate poster by visiting TG Online at www.tgslc.org/order/index.cfm and selecting "School Resources" under "Financial Literacy and Default Aversion."

To learn more
You can direct your student and parent borrowers to other sources of help as well as feature this poster in your office lobby. For questions about the FFELP and the latest Stafford and PLUS interest rates, contact TG's customer assistance team at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.

TG provides support for lender list disclosure requirement

Final rules released last November 1 provided the requirements a school must meet if it chooses to distribute a preferred lender list to its borrowers. One of those requirements is to provide certain disclosures, including comparative information about reduced interest rates and other benefits offered by the lenders to prospective borrowers.

Some online help
While each school is responsible for ensuring that the disclosure requirements are met and for determining the method of dissemination that is most appropriate for its operational environment and student demographics, TG has implemented a new feature in AdvanTG Web™ and TG Loans By Web™ (LBW) to assist schools that wish to provide this information in an online format. Schools were given the ability to enter borrower benefit information via the Lender List screen beginning in early June; the display of this information in LBW was activated as of Saturday, June 28th. Information schools have entered is now available to borrowers in LBW to assist them in their lender selection.

TG encourages those schools that have not done so already to collect the borrower benefit information as soon as possible; this, and the other lender list requirements take effect today, July 1. Pending further guidance from ED, TG has broken the borrower benefit information into the following three categories:

Rates and fees,
Repayment terms, and
Other.

Schools may also choose to include Web addresses for the lenders on its preferred lender list to provide the borrower an additional research tool in making his or her lender selection.

More information
If you have any questions on how to enter the information into AdvanTG Web, please contact your TG regional account executive for assistance.

TG updates internal systems with annual and aggregate loan limits

On May 1, 2008, Congress approved H.R. 5715, the "Ensuring Continued Access to Student Loans Act of 2008" (ECASLA) which includes loan limit increases for undergraduate Stafford loan borrowers. On June 18, ED issued Dear Colleague Letter (DCL) GEN-08-08/FP-08-07, which addresses the increases in Stafford annual and aggregate undergraduate loan limits and provides the effective date as loans with first disbursements on or after July 1, 2008. For loan periods that cross over July 1, 2008, the increased loan limits apply only if the first disbursement is on or after July 1, 2008; or if the school certifies a supplemental loan for the loan period with a first disbursement on or after July 1, 2008.

As of June 28th, TG has updated both annual and aggregate loan limits throughout its systems per the guidance mentioned above. Related to the limits, ECASLA:

Increases the Stafford annual loan limit for dependent undergraduates by $2,000; this increase may be composed only of unsubsidized funds.
Increases the additional unsubsidized Stafford annual loan amounts available to independent undergraduates, and to dependent undergraduates whose parents cannot borrow a PLUS loan by $2,000. This results in a total additional unsubsidized loan amount of $6,000 per year for first- and second-year undergraduate students, and a total additional unsubsidized loan amount of $7,000 per year for third-, fourth-, and fifth-year undergraduate students.
Increases the Stafford aggregate loan limits to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates and dependent undergraduates whose parents cannot borrow a PLUS loan (but the subsidized portion of the aggregate limit still may not exceed $23,000 for both groups).

For additional information about the changes to loan limits please reference Shoptalk Online editions 453 and 460. In addition, ED issued Dear Colleague Letter (DCL) GEN-08-04/FP-08-04 which announced an increase in the aggregate loan limit for graduate and professional students enrolled in certain approved health profession programs to $224,000, effective April 18, 2008. TG's guarantee, support, and reporting team has been manually processing requests that surpassed the new aggregate limits; with the June 28 updates, this aggregate loan limit has been updated on TG's systems and will allow these loans to process without manual intervention.

More information
If you have any questions, please contact TG's guarantee, support, and reporting team at (800) 446-5616, or send an e-mail message to lgo.helps@tgslc.org.