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Companies hired to run student loans
OTTAWA – The federal government has awarded EDULINX Canada of Mississauga, Ont. and BDP Business Data Services Ltd. of Toronto the contracts to act as service providers for the Canada Student Loans Program.
EDULINX won a contract valued at $91.6 million to act as the service provider for borrowers attending public educational institutions. BDP won a contract valued at $45.7 million for servicing borrowers attending private educational institutions.
Both companies demonstrated their ability to provide high-quality service to Canadian students at the lowest cost to Canadian taxpayers, the government said in a December news release announcing the move.
Under the terms of the contracts, awarded by Public Works and Government Services Canada on behalf of Human Resources Development Canada, the companies will provide services for the Canada Student Loans Program beginning in March 2001. The contracts expire in March 2004, but provide for the possibility of two one-year extensions.
Both companies will be responsible for the administration of loan disbursements, the management of accounts while student borrowers are attending the educational institution, the consolidation and repayment of loans, and the management of student loan debt while student borrowers are in repayment.
Funding for this contract was provided for in the February 2000 federal budget and is built into the existing fiscal framework.
In March 2000, the federal government announced it would implement a direct financing regime for the management and administration of the Canada Student Loans Program. A Request for Proposal (RFP) was issued in September.
The services to be performed by the service providers include:
- Administration of loan disbursements - communication between student borrowers and the Canada Student Loans Program on administering the loan disbursement.
- In-study account management - communication between students in-study and the Canada Student Loans Program to advise borrowers about their interest-free loan status.
- Loan consolidation and repayment - communication between borrowers who have concluded studies and the Canada Student Loans Program regarding consolidation of loan interest and repayment options.
- Debt management - communication between borrowers facing financial hardship and the Canada Student Loans Program regarding debt-management help available from the Government of Canada.
The service providers have shown their ability to increase service to students through interactive voice and Internet-based technologies response systems.
The government says the service providers will have to meet rigorous service standards, including the overall satisfaction of borrowers as demonstrated by regular surveys.
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