On June 24, the U.S. Department of Education announced that it had signed contracts with five companies who would act as student loan servicers after the department’s current contracts expire. In addition to some familiar names, that list also included some new ones, including the Texas Guaranteed Student Loan Corp (Trellis).
While Texas Guaranteed Student Loan Corp is not yet officially a student loan servicer for the Direct Loan program, it is very likely that they will be.
Curious what that means for your student loans? Below, we take a look at who Texas Guaranteed Student Loan Corp is, what they do, and the role that they will be responsible for playing as a federal student loan servicer.
Who is Texas Guaranteed Student Loan Corp?
In 1979, the Texas legislature created the Texas Guaranteed Student Loan Corporation as a public, nonprofit corporation that would service loans made under the Guaranteed Student Loan Program, which would later be known as the Federal Family Education Loan Program (FFELP). The company operates under a mission of promoting access to higher education while also helping students repay their student loans.
Texas Guaranteed Student Loan Corp and Trellis
In August of 2019, Texas Guaranteed Student Loan Corp rebranded as Trellis Company. Though the company changed its name, logo, and branding, no contracts or accounts changed hands; student borrowers who previously had accounts with Texas Guaranteed Student Loan Corp still had their accounts with Trellis.
What does Texas Guaranteed Student Loan Corp do?
Once their contract with the U.S. Department of Education is finalized, Texas Guaranteed Student Loan Corp will begin to perform those duties required of them as a student loan servicer for federal student loans. This will include:
- Collecting and applying your monthly student loan payments
- Broadly managing your student loan account and status
- Receiving and processing any student loan paperwork you submit
- Helping you understand and apply for student loan deferment or forbearance, as well as discharge and forgiveness
- Helping you understand the different repayment plans you may qualify for, and helping you choose one that makes sense for you
Types of Loans Serviced by Texas Guaranteed Student Loan Corp
Currently, Texas Guaranteed Student Loan Corp services legacy student loans made under the Federal Family Education Loan Program (FFELP). Upon finalization of their contract with the Department of Ed, they will also begin servicing loans made under the Direct Loan Program, including:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct Parent PLUS Loans
- Direct Graduate PLUS Loans
- Direct Consolidation Loans
Alternatives to Texas Guaranteed Student Loan Corp
Currently, Texas Guaranteed Student Loan Corp does not service any Direct Loans. That being said, once their contract with the Department of Education is finalized, they will officially become a student loan servicer for such loans. As such, you may find that your loan is transferred to Texas Guaranteed Student Loan Corp.
If you are worried about this transition, or are unhappy with your experience with the company, you may be wondering if you will be able to transfer your loans to a new servicer. The short answer: No. The Department of Education typically reserves the right to decide your servicer, and they are unlikely to consider any requests for transfers.
That being said, you may have some options available: Namely, student loan consolidation or refinancing.
Student Loan Consolidation
If you have multiple federal student loans, you can choose to consolidate them into a single new loan (called a Direct Consolidation Loan). When applying for consolidation, you can choose to either stay with your existing servicer or request a new one.
If you are unhappy with your experience with Texas Guaranteed Student Loan Corp, then during consolidation you should request a new servicer. While this request is sometimes unable to be granted, it very often will be.
While consolidation can be a great way of transferring to a new servicer, and can also help you keep track of your student loans more easily, it also comes with some downsides: It can reset the clock on student loan forgiveness, for example, or change the repayment plans that you are eligible for. For that reason, make sure you understand the pros and cons of consolidation before moving forward.
Student Loan Refinancing
Another option is to refinance your student loans through a private student loan company. By undergoing the refinancing process, you will essentially convert your federal student loan into a private student loan. As such, you have final say over who you want your lender to be; the Department of Education cannot choose your servicer for you.
Refinancing can also help you qualify for lower monthly payments or a lower interest rate, but it means that you will need to forfeit certain borrower protections that come with federal student loans. Again, it’s very important that you understand the pros and cons of refinancing your student loans before you make a decision either way.