Many students prefer federal loans over private student loans simply because these government-backed loans have lower interest rates and are easier to repay. Private student loans are also readily available, but only a few consider applying because of the widespread notion that private student loans are more expensive than federal loans.
The private student loans will come up as the best comprehensive financial solution to meet the education expenses such as fees, living expenses, supplies, computers, and all other associated expenses.
Alternative student loans have more adjustable payment options. Federal loans have a strict time frame of 6 months for you to repay your loans. In contrast, private student loans let you pay back your loans for up to a year. You may also negotiate with your lender your ideal payment terms; they can adjust these for you.
Once the student acquires the funds, the money can be used for multiple purposes such as tuition and books. Federal student loans place limits on how disbursed money is used. However, a private student loan can pay for a variety of education-related expenses such as a laptop, rent, transportation, etc.
While private student loans offer flexibility and quick processing, getting approved for such loans is no easy task. Federal student loans and grants do not require good credit, which is a nice feature since many college students have little or no credit history. Private student loans are quite the opposite. Because private banks approve the funds, loan requirements include a solid credit history and verifiable income. Plus, the interest rate on a private student loan is generally higher than a Federal student loan, which can equal a higher monthly payment.
Read the complete article on Private Student Loans by visiting http://loans-pages.info, a popular website that provides the best tips and advice on getting a bank loan.

The rising costs of college tuition have made it almost a necessity to apply for a student loan today. Students not only have tuition costs, but the cost of books, meals, gas, cell phones, recreation, etc. The variety of student loans enables students to take care of their varying college expenses. A student loan however, is a loan that must be repaid under specified circumstances.

A Federal Family education loan or a Stafford loan consist of subsidized or unsubsidized terms. With a Subsidized Stafford Loan the government covers the interest on your student loan as long as you are enrolled in school and taking 6 or more credits. You can qualify by meeting the criteria for financial need. On the contrary with an Unsubsidized Stafford Loan the student must pay the interest on the loan while they are enrolled in school.

The other thing you need to consider before applying for a student loan is your ability to pay back the loan. Consider the kind of job you would possibly have after you graduate. Make an estimate of what your starting salary would be when you get a job. The cardinal rule in borrowing is that you should only borrow an amount that you are certain you will be able to pay back. Before turning in your student loan application, you also need to know how much you will have to pay every month if your loan gets approved.

There are different options during the grace period. The grace period lasts for the first 3 months after you graduate college. This is the time to take advantage of your loan repayment options. Find more information about loan grace periods by referring to the resource box.

Virtually any school or program will allow you to utilize the Direct Student loan, Guaranteed Student loan or PLUS loan. It is very important to thoroughly research all available options for funding long-term education. Your future is tied to your funding, which is your student loan.

Read the complete article on Private Student Loans by visiting http://loans-pages.info, a popular website that provides the best tips and advice on getting a bank loan.

Many students prefer federal loans over private student loans simply because these government-backed loans have lower interest rates and are easier to repay. Private student loans are also readily available, but only a few consider applying because of the widespread notion that private student loans are more expensive than federal loans.
The private student loans will come up as the best comprehensive financial solution to meet the education expenses such as fees, living expenses, supplies, computers, and all other associated expenses.
Alternative student loans have more adjustable payment options. Federal loans have a strict time frame of 6 months for you to repay your loans. In contrast, private student loans let you pay back your loans for up to a year. You may also negotiate with your lender your ideal payment terms; they can adjust these for you.
Once the student acquires the funds, the money can be used for multiple purposes such as tuition and books. Federal student loans place limits on how disbursed money is used. However, a private student loan can pay for a variety of education-related expenses such as a laptop, rent, transportation, etc.
While private student loans offer flexibility and quick processing, getting approved for such loans is no easy task. Federal student loans and grants do not require good credit, which is a nice feature since many college students have little or no credit history. Private student loans are quite the opposite. Because private banks approve the funds, loan requirements include a solid credit history and verifiable income. Plus, the interest rate on a private student loan is generally higher than a Federal student loan, which can equal a higher monthly payment.
Read the complete article on Private Student Loans by visiting http://loans-pages.info, a popular website that provides the best tips and advice on getting a bank loan.

The introduction of the Sunshine Act follows recent reports detailing the aggressive and highly questionable tactics some lenders are using to market private loans and court the favor of colleges and universities to offer such loans to their students. It also responds to the rapid growth in the use of private loans in recent years—such as “alternative loans” that lenders offer through schools, and direct-to-consumer private educational loans. According to the College Board, the total volume of private student loans has grown at an average rate of 27 per year since 2001, and now totals $17.3 billion, or 20 percent of all student loan volume. Some private loans carry interest rates as high as 19 percent - compared to 6.8 percent for loans made through the government’s loan programs - and often are marketed to students and families with poor or no credit histories.

“Going to college is hard enough. Students shouldn’t have to worry about being exploited when they take out student loans,” said Senator Kennedy. “It’s obvious that some lenders are pulling out all the stops to woo colleges into offering their loan products. These inducements may be legal, but they’re wrong. They get in the way of providing students and their families with the help they need to afford college. At a time when students and families are turning to private and alternative loans more than ever, we need to make sure they’re being offered under the best terms possible, not because a lender has sought to make a sweetheart deal with a school.”

“We need to shine a bright light on the incentive-based relationships that exist between some universities and lenders. We want college officials to look out for the interests of their students instead of looking forward to the next gift or all-expenses paid exotic vacation,” said Senator Durbin, who has called for an Inspector General investigation into potential conflict of interest between lenders and universities. “Before signing on the dotted line, students and their families should have all the facts and should feel confident that they’re receiving the best deal on their college loan. The first obligation of any college or university is to help its students, not the lenders.”

The Sunshine Act:

* Requires full disclosure of special arrangements that lenders and institutions of higher education have to offer loan products at the institution;
* Bans lenders from offering gifts worth more than $10 to college employees, including travel, lodging, entertainment, and in-kind services that lenders provide to college financial aid offices;
* Requires full disclosure of the reasons why an institution of higher education has selected a lender for its “preferred lender” list, including any special arrangements the lender has with the school;
* Encourages borrowers to maximize their borrowing through the government’s loan programs before taking out alternative loans and direct-to-consumer loans with higher interest rates.

The Sunshine Act applies to all lenders that make private educational loans through colleges and universities, as well as lenders of direct-to-consumer educational loans. The provisions of the Act also apply to all post-secondary educational institutions that receive Federal funds.

Student Loan Sunshine Act
Senators Edward M. Kennedy and Richard J. Durbin

The Student Loan Sunshine Act protects students and parents from exploitation by private lenders and lenders who offer gifts to colleges as a way to secure loan business. It requires full disclosure of special arrangements that lenders and colleges have to offer loan products at the college; bans lenders from offering gifts over $10 to college employees; and encourages borrowers to maximize their borrowing through the government’s loan programs before taking out private loans with higher interest rates.

The Student Loan Sunshine Act Protects Students and Families by:

- Ending Inappropriate Lender Practices.

    * The Act prohibits lenders from offering any gift worth more than $10 to a college employee, including free or discounted trips, meals, invitations to entertainment events or other form of hospitality.
    * It also prohibits lenders from offering services to financial aid offices that create a conflict of interest, such as lending staff during peak loan processing times.
    * It prohibits lenders from entering arrangements with colleges that require the college to “brand” the lender’s loan product with the college’s emblem or logo.

- Giving Students and Families More Information About Special Arrangements Between Lenders and Colleges, and the Terms and Conditions of Loans, and Preferred Lender Lists.

    * The Act requires lenders to report any special arrangements they have with colleges to make loans to the Secretary of Education, including the terms of the arrangement related to marketing, recommending, endorsing student loans, and any benefit, direct or indirect, provided to or paid to any party in connection with the loan arrangement.
    * The Act requires the Secretary of Education, together with members of the higher education community and students, to develop a clear, easy-to-use model format for reporting the terms and conditions of student loans, similar to the APR disclosure required for other types of loans.
    * The Act requires colleges’ preferred lender lists to: include at least three non-affiliated lenders; clearly and fully disclose why the college has identified a lender as a preferred lender; and state that students do not have to borrow from the preferred lender list.

- Encouraging Borrowing Through the Government’s Loan Programs, and Discouraging Overborrowing through Direct-to-Consumer Education Loans.

    * The Act requires all lenders of direct-to-consumer private educational loans to clearly and prominently state that borrowers may qualify for low-interest loans through the Federal government’s loan programs. It also requires these lenders to clearly disclose how the interest rate is determined; sample loan costs disaggregated by type; information on any and all fees; information on collection in the case of default; and information on Better Business and state consumer agency or state attorney general complaints against the lender and their resolution.
    * Before a DTC lender can offer an education loan of more than $1000, the Act requires the lender to notify the borrower’s college of the amount of the proposed loan, so the school can advise the borrower if the loan exceeds what’s necessary to cover the student’s cost of attendance after other aid sources are factored in.
    * The Act bars lenders from offering a private loan through a college (also known as an “alternative loan” until the college has informed students and parents of all their options for borrowing under the government’s Title IV loan programs—including information on any terms and conditions of Title IV loans that are more favorable than the private loan.

Facts about Private Loans, Lender Gifts, and Preferred Lender Lists:

- Private Loans

    * Private student loans now total $17.3 billion, and have grown at an average rate of 27 percent per year since 2001. In 2001-02, private loans accounted for 12 percent of total education borrowing; in 2005-06, they accounted for 20 percent. Unlike loans offered through the federal government’s loan programs, private loans frequently carry much higher interest rates, especially for students without credit histories and families without strong credit ratings.
    * Some lenders are increasingly using questionable methods to market private loans to students and their families and court the favor of colleges and universities. For example:
          o The private loan company Loan to Learn invited college officials and their spouses to attend an all-expenses paid “education conference” in the West Indies.
          o The private loan company Student Loan Xpress has offered 100% loan approval at colleges if the college agrees to “brand” the private loan with the college’s name and emblem - making the loan appear to be offered by the college, not the private lender.
          o Other private loan companies encourage borrowers not to fill out the Free Application for Federal Student Aid (FAFSA)—which allows borrowers to obtain loans at lower interest rates - while not prominently disclosing the fact that private loan interest rates are typically much higher.

- Lender Gifts

    * Lenders who participate in the government’s Federal Family Education Loan (FFEL) program also engage in questionable tactics, like offering “educational conferences” at luxury hotels, and offering college officials free entertainment and tickets to sporting events. Many lenders offer their staff to work in financial aid offices during peak loan processing times, print materials for financial aid offices - and even e-mail students on behalf of the financial aid office.

- Preferred Lender Lists

    * Most colleges maintain “preferred lender” lists and encourage students to borrow from the list. While some colleges use a rigorous process to ensure that these preferred lenders offer the best loan terms and conditions to students, others don’t - and many preferred lender lists don’t clearly state why the lenders has earned “preferred” status. Some preferred lender lists don’t offer a real choice of lenders at all - because all the names on the list are subsidiaries of the same big lender.

 The Student Relief Act of 2007, H.R. 5, was passed in the House of Representatives in Washington and is waiting for the Senate to pass it as well. It will slash the interest rates for college loans by half, from a 6.8 percent to 3.4 percent over the next five years.

Read more…

A National SMART Grant will provide up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security.

The student must also have maintained a cumulative grade point average (GPA) of at least 3.0 in coursework required for the major.

The National SMART Grant award is in addition to the student’s Pell Grant award.

Apply for this loan at the student financial aid office of the school where you are or intend to be enrolled.

The Health Professions Student Loan program provides long-term, low interest rate loans to full-time, financially needy students to pursue a degree in dentistry, optometry, pharmacy, podiatric medicine, or veterinary medicine.

Eligible Disciplines

Under this program, funds are awarded to accredited schools of

dentistry
optometry
pharmacy
podiatric medicine
veterinary medicine
Eligible Applicants

You are eligible to apply for this loan at a school that participates in the Health Professions Student Loan program if you are

A citizen, national, or a lawful permanent resident of the United States or the District of Columbia, the Commonwealths of Puerto Rico or the Marianas Islands, the Virgin Islands, Guam, the American Samoa, the Trust Territory of the Pacific Islands, the Republic of Palau, the Republic of the Marshall Islands and the Federated State of Micronesia.

Apply for this scholarship at the student financial aid office of the school where you are or intend to be enrolled

The Scholarships for Disadvantaged Students program provides scholarships to full-time, financially needy students from disadvantaged backgrounds, enrolled in health professions and nursing programs. Participating schools are responsible for selecting scholarship recipients, making reasonable determinations of need, and providing scholarships that do not exceed the cost of attendance (tuition, reasonable educational expenses and reasonable living expenses).

Eligible Disciplines

Under this program, funds are awarded to accredited schools of

• medicine
• osteopathic medicine
• dentistry
• optometry
• pharmacy
• podiatric medicine
• veterinary medicine
• nursing (associate, diploma, baccalaureate and graduate degree)
• public health
• chiropractic
• allied health (baccalaureate or graduate degree programs of dental hygiene, medical laboratory technology, occupational therapy, physical therapy, radiologic technology, speech pathology, audiology, and registered dietitians)
• graduate programs in behavioral and mental health practice (includes clinical psychology, clinical social work, professional counseling, or marriage and family therapy)
• programs providing training of physician assistants

Eligible Applicants

You are eligible to apply for this scholarship at a school that participates in the Scholarships for Disadvantaged Students program if you are

• From a disadvantaged background as defined by the U.S. Department of Health and Human Services:
  An individual from a disadvantaged background is defined as one who comes from an environment that has inhibited the individual from obtaining the knowledge, skill, and abilities required to enroll in and graduate from a health professions school, or from a program providing education or training in an allied health profession; or comes from a family with an annual income below a level based on low income thresholds according to family size published by the U.S. Bureau of Census, adjusted annually for changes in the Consumer Price Index, and adjusted by the Secretary, HHS, for use in health professions and nursing programs.
• A citizen, national, or a lawful permanent resident of the United States or the District of Columbia, the Commonwealths of Puerto Rico or the Marianas Islands, the Virgin Islands, Guam, the American Samoa, the Trust Territory of the Pacific Islands, the Republic of Palau, the Republic of the Marshall Islands and the Federated State of Micronesia

Apply for this loan at the student financial aid office of the school where you are or intend to be enrolled

The Loans for Disadvantaged Students program provides long-term, low-interest rate loans to full-time, financially needy students from disadvantaged backgrounds, to pursue a degree in allopathic medicine, osteopathic medicine, dentistry, optometry, podiatric medicine, pharmacy or veterinary medicine.

Participating schools are responsible for selecting loan recipients, making reasonable determinations of need and providing loans which do not exceed the cost of attendance (tuition, reasonable educational expenses and reasonable living expenses

Eligible Disciplines

Under this program, funds are awarded to accredited schools of

• allopathic medicine
• osteopathic medicine
• dentistry
• optometry
• pharmacy
• podiatric medicine
• veterinary medicine

Eligible Applicants

You are eligible to apply for this loan at a school that participates in the Loans for Disadvantaged Students program if you are

• From a disadvantaged background as defined by the U.S. Department of Health and Human Services:
  An individual from a disadvantaged background is defined as one who comes from an environment that has inhibited the individual from obtaining the knowledge, skill, and abilities required to enroll in and graduate from a health professions school, or from a program providing education or training in an allied health profession; or comes from a family with an annual income below a level based on low income thresholds according to family size published by the U.S. Bureau of Census, adjusted annually for changes in the Consumer Price Index, and adjusted by the Secretary, HHS, for use in health professions and nursing programs.
• A citizen, national, or a lawful permanent resident of the United States or the District of Columbia, the Commonwealths of Puerto Rico or the Marianas Islands, the Virgin Islands, Guam, the American Samoa, the Trust Territory of the Pacific Islands, the Republic of Palau, the Republic of the Marshall Islands and the Federated State of Micronesia

Second year students must also have maintained a cumulative grade point average (GPA) of at least 3.0. The program will be available for the first time for the 2006-07 school year for first year students who graduated from high school after January 1, 2006 and for second year students who graduated from high school after January 1, 2005.

The Academic Competitiveness Grant award is in addition to the student’s Pell Grant award.

More aid is being targeted toward the 21st century skills valued by employers. New Academic Competitiveness grants and SMART grants, which build on the successful Pell Grant program, will benefit more than half a million low-income college and college-bound students who took rigorous coursework in high school or who are majoring in math, science and critical foreign languages. These subjects are key to America’s economic competitiveness and national security.

This is an exciting and hopeful time for students and parents. As you prepare for college, we trust you will find this Web site helpful. Please visit us again soon.

TG names two new account executives

Round Rock, Texas — Greg Mackey and June Perry have joined TG’s relationship management and consulting team as account executives. Mackey will serve as a regional account executive in South Florida and Puerto Rico, and Perry will serve as an account executive for the Dallas area.

Greg Mackey has more than five years experience in higher education and financial aid. Prior to joining TG, he worked as a business analyst, student loan coordinator, and graduate and athletic scholarship coordinator at Florida International University in Miami. Mackey holds a master’s degree in public administration and bachelor’s degrees in finance and management information systems, all from Florida International University.

June Perry has more than 12 years of financial aid experience and a wealth of knowledge about financial aid programs, including student loans, and has first-hand experience as a user of TG’s products and services. She most recently served as the associate director of financial aid at the University of Texas Southwestern Medical Center at Dallas. She began her career there in 1993 as an administrative technician in the office of the registrar. She then went on to serve as a financial aid counselor and assistant director of financial aid. Perry holds a bachelor’s degree in management and finance from the University of Texas at Arlington.

“Both Greg and June bring a wealth of industry knowledge and solid relationships with customers in their respective regions,” said Margie Harvey, assistant vice president of relationship management and consulting. “Their expertise will be an asset to TG’s customers.”

Mackey can be reached at (800) 252-9743, ext. 2507, or by e-mail at gregory.mackey@tgslc.org. Perry can be reached at (800) 252-9743, ext. 4629, or by e-mail at june.perry@tgslc.org.

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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.

TG names two new lender consultants

Round Rock, Texas — John Cerda and Beth Gonzalez have recently joined TG’s lender partnerships team. As lender partnership consultants, they will provide enhanced customer service to TG’s lending partners as part of TG’s relationship management and consulting team.

John Cerda began his career at TG in 1993 as a loan servicing liaison and as a pre-claims collector in default prevention. He then moved on to become an operations analyst, where he was responsible for providing schools, lenders, and secondary markets with assistance on regulatory issues. Prior to joining the lender partnerships team, Cerda worked as a senior desktop analyst.

“John’s multiple business degrees coupled with business development and marketing experience make for a great addition to our team,” said Kevin Harris, TG’s director for lender partnerships.

Cerda earned a bachelor’s degree in finance and an MBA in management from St. Edward’s University. He also earned a master’s degree in science and technology commercialization from the University of Texas at Austin. Cerda can be reached at (800) 252-9743, ext. 4716, or by e-mail at john.cerda@tgslc.org.

Beth Gonzalez joins TG with 10 years of financial aid and education lending experience. Before joining TG, she worked for Edfinancial Services (formerly Edamerica Services) in Knoxville, Tenn. Most recently, she served as a business processes and systems coordinator responsible for all technical aspects affecting the loan origination and disbursement departments. Prior to that, Gonzalez served as a school set ups and disbursement supervisor, where she gained extensive experience with CommonLine and ELM. She also served as an originations specialist, processing student loans for Edamerica.

“Beth brings a wealth of student loan experience, including marketing support at state and regional conferences,” Harris said. “We’re excited to have Beth join our team.”

Gonzalez holds a bachelor’s degree from Johnson Bible College. She can be reached at (800) 252-9743, ext. 2515, or by e-mail at beth.gonzalez@tgslc.org.

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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.
 

For Immediate Release

TG implements e-mail encryption system

Round Rock, Texas — In order to continue its commitment to providing a high level of protection for non-public personal information, TG has implemented e-mail encryption software.

TG has long been committed to protecting our customers’ and borrowers’ non-public personal information (NPI). In addition to TG’s secure Internet and Web-based environments, e-mail encryption software will protect NPI sent via e-mail and provide our customers with an additional level of privacy protection.

This software application is capable of identifying and encrypting e-mail messages sent to customers from TG that contain NPI. Protected information may include, but is not limited to, Social Security numbers and account numbers.

Securing the transmission of electronic messages that contain sensitive information helps TG maintain compliance with various government regulations, including the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act, and state information security laws.

For more information regarding e-mail encryption and its use at TG, visit TG Online at http://www.tgslc.org/resources/securemail.cfm.

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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.

For Immediate Release

TG to host teleconference on distance education

Round Rock, Texas — Now that recent legislation has enabled qualifying schools that deliver most or all of their programs via distance education to participate in federal student aid programs, the topic of distance education is more timely than ever.

To help schools to understand the upcoming changes to the federal student aid rules and how the changes may open up federal student aid access to thousands of higher education students, TG is presenting a telephone conference titled “A Conversation about Distance Education.”

The telephone conference, which is free of charge and open to participants from any institution, will be held Thurs., March 9, 2006, from 2-3 p.m. (CST). During the telephone conference, presenters will:

• Discuss a recent report from the Alfred P. Sloan Foundation and other data regarding the growth of distance education
• Give a synopsis of the change to the 50-percent rules in the Higher Education Act that became effective with the recent passage of the Higher Education Reconciliation Act (S. 1932), which opens federal student aid (Title IV) eligibility to many schools that provide their programs mostly or entirely through telecommunications
• Provide a brief overview of how newly eligible postsecondary schools may apply to participate in the federal student aid (Title IV) programs

A brief question-and-answer session will follow the telephone conference. Questions may be submitted in advance of the event to viola.perez@tgslc.org. Pre-registration is not required. For more information about the event, visit www.tgslc.org/custfocus/teleconf.cfm, or call (800) 252-9743, ext. 4507.

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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.

For Immediate Release

Students’ costs may be manageable even with passage of S 1932: TG projects up to $5 monthly increase for student loan borrowers
Round Rock, Texas — On Feb. 1, 2006, Congress passed S 1932 — The Deficit Reduction Act of 2005 — which included the Higher Education Reconciliation Act of 2005. Included in the legislation are two student loan interest rate changes which have been reported as dramatically increasing the cost of federal student loans to borrowers. The Congressional Budget Office (CBO) has estimated that these changes in borrower interest rates, in combination with maintaining the variable interest rate formula for lenders, will result in a $15 billion savings to the federal government over a five-year period and $36.3 billion savings through 2015.

To get a better picture of how these changes will affect individual student loan borrowers, TG — a nonprofit student loan guarantor that assists more than 550,000 parent and student borrowers each year — conducted a preliminary analysis of the impact on TG FFELP borrowers.

“We wanted to examine the actual impact of this one policy change because of its potential impact to students and families,” said George Torres, TG assistant vice president for congressional and legislative relations. “However, we certainly are not meaning to increase or diminish the impact of the policy choice of reducing borrower benefits as a method to control the cost of entitlement programs.”

Stafford Loan Interest Rate
The first “change” that TG examined was actually placed in the Higher Education Act in 2001. Congress chose to leave this scheduled change in place with this reconciliation bill. In effect, the Stafford loan interest rate will change from a variable interest rate (indexed from the three-month Treasury bill rate plus 1.7 percent while the borrower is in school or in grace, and 2.3 percent when the borrower enters repayment), to a fixed 6.8 percent interest rate for the life of the loan.

Over the past few years, the Treasury bill rates have been at record lows, resulting in extremely low interest rates on Stafford loans. For the period of July 1, 2005, through June 30, 2006, the rate on these loans is 4.7 percent while a borrower is in school or in grace and 5.3 percent when the borrower enters repayment.

However, Treasury Bill interest rates have been going up since July 1, 2005. According to the CBO estimates, if the current rules remained in effect, and the rate stayed variable, it would increase to 6.2 percent while the borrower is in school and 6.8 percent when the borrower enters repayment on July 1, 2006. Also, this rate could continue in future years to increase up to the statutory cap of 8.25 percent.

The main difference between the old and new rules for student borrowers is the amount of interest that is capitalized into their loan value while they are in school. Under the old rules, this rate would be 6.2 percent during 2007, while it will be 6.8 percent under the new rules. For a student who enters a bachelor’s degree program in the fall of 2006 and borrows the aggregate limit of Stafford loan funds (all unsubsidized) over a five-year period (for a total of $23,000), this will result in $436 dollars of additional debt when the student enters repayment. This translates into a $5 month increase in loan payments (from $255 to $259 month) and a total cost of $602 over the life of a 10-year loan.

PLUS Loan Interest Rate
The second interest rate change contained in the bill applies to PLUS loans (loans taken out by parents on behalf of their children). Under the current rules, this rate would have been fixed at 7.9 percent beginning July 1, 2006. With the enactment of S 1932, this rate changes to 8.5 percent. This translates into an additional cost of $382 for every $10,000 borrowed by parents under the PLUS Loan Program.

“It’s important to note that while there may be some additional cost, funds are still available,” said Torres. “The possible increase in cost should not act as a barrier to students enrolling in higher education.”

TG’s public service Web site, www.AIE.org, provides a loan repayment calculator that can help borrowers determine how their payments may be affected by the interest rate changes on July 1. In addition TG’s financial aid experts are available by phone at (800) 845-6267 to address borrowers’ concerns or answer specific questions about planning and paying for college.

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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.

— Secretary Margaret Spellings

The U.S. Department of Education today announced that more than $1.1 billion in funds from the Hurricane Education Recovery Act, signed by President Bush on Dec. 30, 2005, will be made available to reopen schools in the Gulf Coast region and to help educate students across the country who were displaced or impacted by Hurricanes Katrina and Rita.

• $645 million will be provided in four installments under the Temporary Emergency Impact Aid for Displaced Students (Impact Aid) Program to assist local education agencies in 49 states and the District of Columbia in paying for the cost of educating students who were enrolled in public and non-public schools. The first installment of $120 million will be made immediately, with $750 per student ($937.50 per student with a disability) provided.
• Approximately $500 million will be immediately provided under the Immediate Aid to Restart School Operations (Restart Aid) Program to help reopen and restart damaged schools in the states most affected by the storms. This is on top of the $253 million in aid delivered to the region in January.
• $5 million will be provided under the Assistance for Homeless Youths (Homeless Aid) Program, to help state education agencies address the needs of students displaced by the storms.

Hurricanes Katrina and Rita created real and pressing educational needs in the Gulf region and nationwide.

• More than 370,000 students were unable to attend school in the weeks following the hurricanes.
• About 158,000 students were still displaced as of Oct. 1, 2005, and are eligible for Impact Aid.
• More than 1,100 schools—public, private and parochial—were still closed two weeks following the storms.
• Public and private school enrollment in New Orleans stands at about 30 percent of the pre-Katrina level.

The aid is designed to meet the real needs of families, schools and communities.

• Impact Aid funds may be used to pay school personnel, to provide books and other classroom supplies, or to cover school transportation and health costs.
• Impact Aid funds may also be used to offer in-school or outside supplemental services such as tutoring, mentoring and counseling.
• Restart Aid funds may be used to recover student and personnel data; to replace or repair school district information systems; to replace instructional materials and equipment, including textbooks; to rent mobile educational units and lease space; and to recreate instructional plans and curriculum development.
• Homeless Aid funds may be used to identify and enroll students, to cover transportation costs, to provide school supplies, and for other purposes.
• Public, private and parochial schools may qualify for the aid.

The U.S. Department of Education and federal government continue to offer assistance to help the Gulf Coast region recover and get families back on their feet.

• Charter School Grant — The Department provided more than $20 million through a special charter school grant to Louisiana to help open or reopen charter schools in order to serve the children affected by the hurricanes. This has enabled public schools in New Orleans to reopen as charter schools, expediting the children’s education and the region’s recovery.
• Higher Education Help — the Department allocated $190 million to the Louisiana Board of Regents and the Mississippi Institutes for Higher Learning to assist colleges and universities in those states affected by the hurricanes. In addition, the Department is currently distributing over $18 million (out of $30 million total) in unused federal campus-based student aid funds to severely affected colleges.
• Hurricane Help for Schools (www.hurricanehelpforschools.gov) — This website was launched to serve as a nationwide clearinghouse resource for schools to announce their needs so Americans could help meet them. First Lady Laura Bush recorded a public service announcement asking Americans to contribute. To date, more than 650 matches between contributions and needs have been made by individuals, businesses and organizations through the site.
• Donated Federal Supplies — The Department has helped coordinate the donation of thousands of desks and other supplies by the federal government to the Gulf Coast region.
• Student Loan Forbearance — The Department offered six months of student loan-payment forbearance for borrowers in the federal student loan programs impacted by the disaster.
• Aid to Colleges and Universities — Post-secondary institutions educating displaced students have received aid (up to $1,000 per student) to help defray new and unexpected costs resulting from the hurricanes.

More information on the Hurricane Education Recovery Act can be found at: http://www.ed.gov/policy/elsec/guid/secletter/051230.html

For Immediate Release

TG awards grants of more than $1.8 million to organizations to advance college opportunity, student retention, research

Round Rock, Texas — TG’s Public Benefit Grant Program, a philanthropic initiative of TG, has awarded more than $1.8 million to 20 institutions and non-profit organizations to help fund local, regional, and statewide efforts that will lead to greater opportunities and access to higher education and greater student success in preparing for and earning a college degree.

“Our nation’s future depends on our ability to inspire students to achieve all that they’re capable of accomplishing,” said Sue McMillin, president and CEO of TG, a Texas-based, non-profit corporation that provides federal student loan guarantees to help ensure access to higher education for millions of students across the country each year. “Since TG’s founding 25 years ago, we have been committed to the ideal that everyone who aspires to complete a college degree should have the opportunity to do so. However, many families don’t have access to information or resources to understand how they can achieve their educational and career goals. Through TG’s Public Benefit Grants, we’re pleased that we can help these like-minded organizations reach out to students and families.”

The TG Public Benefit Grant recipients for 2006 include:

• Admission Control
• College For All Texans Foundation/Texas Higher Education Coordinating Board
• Communities in Schools of San Antonio
• Council for Opportunity in Education/Pell Institute
• Georgia Foundation for Independent Colleges
• McLennan Community College Foundation
• Mountain View College
• San Antonio Education Partnership
• South Carolina Independent Colleges and Universities
• Texas A&M University
• Texas State Technical College - Waco
• Texas Tech University
• Texas Woman’s University
• University of Houston - Downtown
• University of Houston - Victoria
• University of Nebraska - Lincoln
• University of Texas at Brownsville
• University of Texas - Pan American
• West Texas A&M University
• Wichita Area Technical College

In determining the recipients, TG required each non-profit organization to declare its intent to use grant funding to improve access to, or participation in postsecondary education, college retention, and student success. TG intends that the primary beneficiaries of these efforts, either directly or indirectly, be students who are from low- to moderate-income families.

The grant awards will help organizations carry out efforts that include:

• Financial aid, in the form of grants to students;
• Student mentoring;
• Pre-college outreach to students and parents;
• Academic support and instruction;
• Student retention;
• Student transfer guidance and support;
• Debt management and default prevention; and
• Education research.

These public benefit grants are offered in addition to ongoing support for the Charley Wootan Grant Program, a need-based grant program established by TG in 2000. In the 2005-2006 academic year, $1 million in Charley Wootan Grants were provided to help students enrolled in postsecondary education. Since its inception, the program has awarded more than $3.7 million in grants to hundreds of public-, private-, community- and career colleges and universities.

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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.

For Immediate Release
  
TG offers free workshop to help students, families complete federal financial aid application process
Round Rock, Texas — On February 2 from 7-8 p.m. (CST), TG will host The FAFSA Made Easy, a video program to help students and families complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is the first step students must complete to determine their eligibility to receive the grants, work-study and student loans that may be available to them. There is no cost to participants attending the event, and several host sites will be presenting the event in Spanish as well.

“Completing the FAFSA can be a lengthy process,” said Richard Sapp, TG’s director of pre-college success. “However, the program is designed to help remove some of the frustration by explaining some of the more complicated issues and pointing out the potential pitfalls and common errors for students and their parents.”

In addition to learning more about the FAFSA, high school seniors viewing the teleconference at host sites can enter their names into a drawing to win one of several $500 scholarships from TG.

To find a listing of available host sites for the broadcast, students and parents can visit TG’s public service Web site Adventures In Education at www.AIE.org.

“Organizations interested in serving as community host sites still have time to register. I encourage them to call and make a difference in the lives of students in their communities,” said Sapp.

Any business, organization, school, or civic group interested in serving as a host site should call (800) 252-9743, ext. 2865, or send an e-mail message to richard.sapp@tgslc.org.

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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.

For Immediate Release
  
TG hosts colloquium for ICUT: Texas independent colleges explore retention issues

Round Rock, Texas — Faculty, staff, and administrators from the Independent Colleges and Universities of Texas (ICUT) met at TG’s offices this week to focus on student retention, an issue that has profound impact on the state’s ability to achieve the goals outlined in the “Closing the Gaps” plan for higher education.

The plan calls for an increase of 630,000 students to earn a postsecondary education by the year 2015. If the goal is not met, the economic projections for the state are dim.

And simply enrolling additional students isn’t enough. Students must stay in school and complete their programs of study in order to gain the most benefit from their education. ICUT institutions have long realized the importance of retention. Information on student retention at ICUT institutions is being collected by the Texas Higher Education Coordinating Board. Their data show that in the fall of 2003 and 2004, over 85% of first-time undergraduates had returned to college for a second year at either a public or independent institution in Texas.

“While ICUT institutions have been fairly effective in retaining students, we realize that the growing need and demand for college graduates will require us to reevaluate our strategies,” said Carol McDonald, president of ICUT. “This colloquium has given us the opportunity to refine and develop new strategies that can help us address the needs of a changing college population.”

During the colloquium, attendees heard presentations from Dr. Scott Swail, president of the Educational Policy Institute and co-author of Retaining Minority Students in Higher Education; from Matt Short, director, institutional enrollment services for TG; and from Dr. Bob Wilkinson, director of analysis, assessment, and planning for Pittsburg State University.

“TG is pleased to support ICUT’s efforts in student retention by hosting this conference,” said Sue McMillin, TG president and CEO. “Student retention has a high correlation to the student’s success in managing repayment of student loans following graduation. We want to see all students succeed, whether they attend independent institutions or public colleges and universities — while they’re on campus and after they achieve their educational goals.”

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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.

About ICUT: Independent Colleges and Universities of Texas, Inc. (ICUT), is a nonprofit association and a member of the Texas Higher Education Coalition (THEC). The group’s goal is to raise awareness around the important issues of accessibility, affordability, and retention in the Texas colleges and universities, and is the voice for Texas’ fully accredited private colleges and universities. For more than 30 years, it has fulfilled its mission of helping policymakers recognize the importance and value of the independent sector of higher education. Additional information about ICUT can be found online at http://www.icut.org.

For Immediate Release
  
TG celebrates 25 years of guarantees

Round Rock, Texas — This week TG celebrates the silver anniversary of its first student loan guarantee. The $1,850 loan, borrowed at nine-percent interest from Herring Bank of Amarillo, Texas, allowed a Baylor University student to attend classes for the 1981 spring semester.

Although TG’s current guarantee process is nearly instantaneous, it wasn’t quite as streamlined two-and-a-half decades ago. TG could only guarantee about 125 applications per day because that was the maximum number the Harris computer could handle for batch printing to be completed by the following day.

“Applications were one page, and then the promissory note printed out after the loan was guaranteed,” recalled Janet Weber, TG claims examiner. “Every application was keyed twice to make sure there were no mistakes.”

Dianne Ivy, TG senior accountant, also recollects a much more labor-intensive process. “When I started doing the federal reporting in July of 1981, you had to report everything in detail,” she commented. “They wanted each loan listed separately. Everything was typed on a typewriter. It was all done by hand - green ledger pads, calculators, and paper.”

Over the course of the first 12 months of guarantee operations, TG guaranteed 55,935 loans for a net cumulative amount of $138,663,631. In comparison, for the most recent fiscal year TG guaranteed 878,691 loans for a total of $3.3 billion. And cumulatively since that first guarantee, TG has guaranteed more than nine million student loans totaling over $40 billion, enabling more than 3 million students to pursue a postsecondary education.

“Our many accomplishments have always been and continue to be guided by the students we serve through strong alliances with schools, lenders, secondary markets, and servicers,” said Sue McMillin, TG’s president and CEO. “Without these organizations, we never would have made it to this point. The solid participation and strong partnerships we rely upon daily have been the key to TG’s success.”

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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.

U.S. Secretary of Education Margaret Spellings announced today a new low student loan default rate of 4.5 percent, and she credited schools, loan industry partners and the Education Department’s Federal Student Aid office for their concerted efforts to help students repay their loans on time.

“There’s a coordinated campaign among all partners in the federal loan programs to focus attention on student loan repayment — and it’s working,” said U.S. Education Secretary Spellings. “Financial awareness outreach to students and families, and targeted intervention when needed have paid off, resulting in significant savings to taxpayers.”

The Department released the FY 2003 national student loan default rate, the latest year for which data are available, along with rates for individual schools, types of postsecondary institutions, states and other sectors of the federal loan industry. The national rate fell from 5.2 percent for FY 2002.

The Department’s enhanced management and oversight of the federal loan programs is one reason the Federal Student Aid (FSA) office was taken off the Government Accountability Office’s high-risk list in January 2005. FSA improved default prevention efforts in a number of ways, including:

• Educating future student consumers as early as middle and high school about the cost of paying for college, the financial obligations that may be necessary to attend postsecondary education and the options to pay for that education;
• Educating borrowers about repayment options that meet their financial needs, including loan consolidation opportunities;
• Working with lenders and guaranty agencies to identify high-risk borrowers and target efforts to help them avoid default; and
• Sharing the latest information on borrower activity with schools.

Borrowers needing assistance on repaying their student loans should contact the holders of the loans to learn about repayment options. For help locating their loan holders, borrowers may access www.nslds.ed.gov or may contact the Department’s Federal Student Information Center at 1-800-4FED-AID (1-800-433-3243).

# # #

NOTE TO EDITORS: The FY 2003 default rates released today represent the most current data available and include data on borrowers who attended some 5,837 schools that participate in the Federal Family Education Loan and William D. Ford Federal Direct Loan programs. The FY 2003 default rate is the percentage of borrowers who began repaying their loans between Oct. 1, 2002, and Sept. 30, 2003, and who defaulted before Sept. 30, 2004.

Individual school default rates are posted on the department’s website at http://www.ifap.ed.gov/DefaultManagement/DefaultManagement.html (click on Press Release hyperlink).

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Schools may have their own deadlines and applications for awarding student aid. Check with the school’s financial aid office for information.

State deadlines may be earlier than the federal deadline. If a link has been provided to a state online form, you can select the state name to be directed to that form.

Note: State forms do not replace filling out the FAFSA. You must fill out the FAFSA to receive federal student aid.

Note: Date received means received by the U.S. Department of Education unless otherwise indicated.

FAFSA on the Web, Renewal FAFSA on the Web, and applications must be submitted by midnight Central Daylight time, June 30, 2006.
Corrections on the Web forms must be submitted by midnight Central Daylight time, September 15, 2006.
The 2006-2007 School Year (July 1st, 2006 - June 30th, 2007):

It is important to note the type of deadline you are up against. Ask your school about their definition of an application deadline, whether it is the receipt date and time or the process date and time of the application.

The Department of Education considers an application’s receipt date and time to be when the application/correction has been successfully submitted. The last page of the online application/correction submission process is therefore called the “Confirmation Page”. It contains a 22 (if an application) or 30 (if a correction) character long “Confirmation Number”. This number contains the exact date and time (Central Standard Time) the form was received. It is recommended you print this for your records.

Note: Transactions must be completed and accepted by midnight to meet the deadline. If transmissions are started before midnight but are not completed until after midnight, those transmissions will not meet the deadline. In addition, any transmission picked up on the deadline date that gets rejected may not be able to be reprocessed because the deadline will have passed by the time the user gets the information notifying him/her of the reject.