TG Looks to Redefine Itself

Since its creation, the Texas Guaranteed Student Loan Corp. has guaranteed $41.6 billion in loans for millions of Texas students.

But the massive overhaul of the student loan industry in March cut private lenders out of the student loan equation altogether in favor of direct borrowing from the federal government.

Now, Texas Guaranteed — which reported $52 million in revenue in 2009 — faces a vastly transformed landscape for doing business.

Gone is its "guaranteed" function, and with it a sizeable chunk of the revenue the corporation brought in from originating loans — $32.5 million, or 27 percent of its revenue in the 2009 fiscal year, said George Torres, a senior adviser with Texas Guaranteed.

The Round Rock-based public nonprofit was created by the state Legislature in 1979 to administer the bank-based federal student loan program. It guaranteed loans for half a million student borrowers in 2009 and has served more than 3 million since its inception.

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