After months of waiting, Human Resource Development Canada has finally announced which providers will be administering the Canada Student Loans Program next year--an announcement that brought mixed reactions from the stakeholders involved.
Edulinx Canada Corporation will administer public institution loans and BDP Business Data Services Ltd. would be in charge of lending for students at private institutions. The separation between public and private is the result of both higher default rates for private students and different needs between them--a decision that all parties seem to agree with.
Edulinx Communications Director Wally Hill said he understands the standpoint of both the government and students.
"Private institutions have a very different student life cycle," noted Hill, adding they also have very different repayment profiles.
Edulinx, who will be servicing public schools like the University of Calgary, is part owned by CIBC, which controls 51 per cent of the company, and USA Group, which owns the remaining 49 per cent. However, the Canadian Alliance of Student Associations expressed worries that the contract was not awarded to a fully Canadian-owned provider.
"We're concerned with having American companies come up and take care of our business that Canadian groups should be able to," said CASA National Director Mark Kissel, adding there were a number of providers bidding for the spot that were entirely Canadian owned.
The selection process began during summer of this year. In September, a final draft of the request for proposals was published and bidding opened.
Bryce Conrad from HRDC explained that proposals were given points based on the services they planned to offer and what plans they had presented. These points, which were awarded based on very specific criteria, were compared to the financial cost of each provider.
"Edulinx had the lowest cost per point [so] they won the evaluation for the public institutions," said Conrad, who also explained that he does not feel that involvement with USA Group will be an issue on the administration of loans. "If for some reason Edulinx, be it because they have an American influence or not, isn't delivering [adequate] service, then we will hold them responsible and accountable."
Hill also maintains that ownership will not be an issue.
"As far as we're concerned, we are a Canadian company," explained Hill. "The only impact from our perspective of having [USA Group] as part owner is that we have access to their over 40 years of experience in student loans."
According to Hill, the transition from the old program should be fairly smooth with major changes only occurring in communication with students.
"Students can expect to have greater access to their information, more two-way communication between the people administering the loan and themselves," noted Hill. "The government and Edulinx are both very concerned to make sure that it's as smooth a transition as possible for students."
Edulinx would like to see major improvements in communications with students , pointing out government efforts earlier this year to outline changes in the program.
The only real change in procedure will be that students will now take completed student loan papers to Edulinx, who will be set up at post-secondary institutions during peak times, rather than their bank as in previous years. The major difference here is that the money is now coming directly from the government instead of banks.
"Edulinx is supposed to be a transparent corporation," said Kissel. "It is the government of Canada, when it's all said and done, doing the student loans."