I had my own problems with TGSLC in the past, namely four years of phone calls trying to make extra payments to get out of wage garnishment and being told there was no way out unless I quit working. (Or got another job and they didn't find out about it.) Luckily, I came here and got good advice from Lynn and two years ago consolidated my loan through DoEd. (Now I only owe $1900--whoopee!)

NOW...my brother's wife is trying to consolidate. TGSLC put her in wage garnishment about a year ago, because she couldn't afford the payments they were asking for on $20,000 in loans. My SIL filled out an application to consolidate and all the forms that went along with it, then she got a call from Federal Direct. They said everything was in order, but they couldn't consolidate because TGSLC is refusing to release the loan. The DoEd person also said that was highly irregular. My SIL was told to call TGSLC and ask them for some kind of release. After speaking to a TGSLC rep yesterday, she got the following email today:



Is this right? Can they refuse to let her get out of wage garnishment? It's not like they're not going to get their money. What's the next step?

I have never heard of being refused a consolidation due to AWG...we used to actively encourage people being garnished to consolidate to get affordable payments.

Suggestion....call back TSGLP and ask for the regulation # of the Higher Education Act that allows them to refuse consolidation. I saw abolutely nothing on their website that states this.

Alternative.....call or write the student loan ombudsman

Toll Free: (877) 557-2575
http://ombudsman.ed.gov

Thank you, Lynn! I'm passing on the info and we'll see what happens.

Okay, here is the answer from TGSLC:



Now, when I looked at that document online, this is what I found in section F: (F) In default but agrees to repay the consolidation loan under the income contingent repayment plan described in Sec. 685.208(f) and signs the consent form described in Sec. 685.209(d)(5).

I looked further and found this at the ed.gov site, but I'm not sure what it means:

Comments: Several commenters pointed out that Sec.
685.220(d)(1)(ii)(E) and (F) prohibit a borrower from consolidating a
loan that is subject to a judgment or an order for wage garnishment
unless the judgment has been vacated or the wage garnishment order has
been lifted at the time the borrower applies for a Direct Consolidation
Loan. In contrast, the corresponding FFEL Program regulations in Sec.
682.201© provide that a judgment or wage garnishment order must have
been vacated or lifted at the time a Federal Consolidation Loan is
made. The commenters recommended that we revise Sec. 685.220 to be
consistent with the FFEL Program requirements related to the
consolidation of loans subject to a judgment or wage garnishment.

Discussion: We agree with the commenters that the Direct Loan
Program regulations should make it clear that the judgment and wage
garnishment eligibility requirements must be met at the time the Direct
Consolidation Loan is made rather than at the time of the borrower's
application for the loan.

Changes: We have revised Sec. 685.220(d) to clarify that the
eligibility requirements for consolidating a loan subject to a judgment
or wage garnishment must be met at the time a Direct Consolidation Loan
is made.

Comments: To ensure that Direct Loan Program borrowers have the
same options for resolving a default as FFEL Program borrowers, some
commenters recommended that the Secretary clarify in the regulations
that a borrower with a defaulted Direct Consolidation Loan remains
eligible for loan rehabilitation with a repayment plan that provides
for reasonable and affordable payments such as those available under an
income contingent repayment plan. Other commenters recommended that the
Secretary amend the Direct Loan Program regulations to allow a borrower
to consolidate a defaulted Direct Consolidation Loan if the borrower
first makes satisfactory repayment arrangements on the defaulted loan
and includes at least one additional eligible loan in the
consolidation.

Discussion: There is nothing in the regulations that prohibits a
borrower with a defaulted Direct Consolidation Loan from entering into
an agreement to rehabilitate that loan under a repayment plan that
provides for reasonable and affordable payments.
We agree that the Direct Loan Program regulations, as currently
written, might suggest that a borrower with a defaulted Direct
Consolidation Loan is ineligible to consolidate that loan into a new
Direct Consolidation Loan under any conditions. However, this was not
our intent. A borrower with a defaulted Direct Consolidation Loan may
consolidate that loan into a new Direct Consolidation Loan if the
borrower includes at least one additional eligible loan in the
consolidation, and meets the other eligibility requirements that apply
to borrowers who wish to consolidate a defaulted loan.

Changes: We have revised the regulations in Sec. 685.220(d)(1)(ii)
to clarify that a borrower may consolidate a defaulted Direct
Consolidation Loan if the borrower: (1) makes satisfactory repayment
arrangements on the defaulted loan or agrees to repay the new Direct
Consolidation Loan under the income contingent repayment plan; and (2)
includes at least one additional eligible loan in the consolidation.

Can anyone decipher any of that?

From what I was told, as long as the order is lifted, it can be consolidated. There is nothing in the regs that say the guarantor cannot lift it.

Maybe the question is whether TGSLC is compelled to lift the wage garnishment order. When I consolidated, I was in wage garnishment and I never even talked to TGSLC. My application with Federal Direct simply went through and that was that.

The person my SIL talked to at Federal Direct did indicate it was highly unusual for a loan not to be released for consolidation. She and my brother are very frustrated because they are taking 15% of her pay and they are literally at the point they cannot afford to make extra payments. Anyway, the TGSLC people have been quite rude and they've basically told her there's nothing she can do.

When he was notified of the pending garnishment, did he not fill out the appeal request???? Did he request a hearing??

I would still recommend him talking to the Ombudsman.

I'm not sure. When I went through all this stuff with TGSLC, I was denied an appeal. I didn't find out I was in wage garnishment until my employer told me, and at that point, TGSLC told me it was too late to appeal. Once I was in garnishment, that was that. Of course, they lied...


Yes, they have contacted and are waiting for a reply.