The Cadre + 12January 1999

UPEI News 3

Royal Bank pulls out of student loans

By MELISSA DOUCETTE

The Boys Bank is no longer provi or cial student loans (PSL) to Prince Edward Island and New Brunswick.

Also, the Royal Bank is the only financial institution that handles stu- dent loans in Nova Scotia. This agreement was up for renegotiation in December 1998, but has only been extended for another six months.

The Royal Bank is the top lender for Canadian Student Loans, and the second biggest provider of student loans in PEI. Specu- lation has it that the Royal Bank will not renew their contract with the Federal

overnment in the year 000.

Sean Kirby, Royal — declined to

iscuss specific reasons for

Value-for-Money Audit hig

Compiled by MELISSA DOUCETTE

In early 1998, the PEI government launched the controversial value-for- money audit on UPEI. Neither the student union nor the University adminis- tration welcomed the audit, whose findings were re- leased in late December, 1998. :

The following textis excerpted from the obser- vations and recommenda- tions of the value-for-money audit. The audit is approx!- mately 120 pages, and contains 72 recommenda- tions.

From Overall Comments: “A value-for-money audit was carried out at the University of Prince

Island at the request of the Legislative Assembly. To [the auditor general’s]

not renewing the student loan contract in PEI, saying only that the PEI government did not accept the Royal’s offer. According to Kirby, it was a “competitive balding proc-

ess.

Butthe provincial gov- emmenthas a different view on the process.

“Tt was certainly nota

merry process,” com- quired a

ve MacPherson, PEI Manager of Student Finances.

Negotiations between all PEI student loan lenders occurred in December. Agree- ments between the CIBC, the Credit Union, and the Royal Bank were up for renewal at this time.

With the previous agreement, each lender was paid a five percent risk

remium by the government.

is figure is based on five

percent of the money loaned to students by each institution.

mented

knowledge this is the first time an audit of this nature has been conducted at a Canadian University.”

From the Introduction: |

« _. Value for money is a generic term for an audit that encompasses economy, effi- ciency and effectiveness issues in an organization . . . Under this form of reporting, obser- vations and recommendations are made on the adequacy of management and prac- tices relative to the economi- cal, efficient, and effective administration of human resources. We also consider whether the public and the Members of Legislative Assembly are be- i vided with accountabil- ity information...

From Governance:

1.3“... To believe that the corporate model could | adapted to the University

and academic

After it became a parent that the Royal would no longer be a lender for PSL’s, the PEI government sought another lender. The National Bank was con- tacted, and a contract was quickly agreed upon. Nego- tiations were conducted via phone and fax, and no face- to-face meetings were re-

“It gives the students more choices,” MacPherson said about having another student loan provider.

In addition, special arrangements have been made for students who had loans with the Royal Bank. To change financial institu- tions for student loan pur- poses, students generally need a special transfer. The process can take weeks, or even months, but most of this wait has been eliminated.

Under _ the new PSL agreement, all

environment oversimplifies why the University exists and how it should be run. The realities confronting the Uni- versity do not lend them- selves to a corporate deci- sion-making model...” From Senate:

1.23“... there still does not exist a documented ranking of priorities for academic rograms at the University. This would serve as a reference point for discussion on reductions and changes to required

due to resource restrictions. In spite of the difficulties

the associated with setting aca-

demic priorities, this should

and courses offered are

congruent with its mandate and can be provided within the budget available.”

be Recommendation 1.40:

The Senate should identify

financial institutions in PEI are paid a ten percent risk remium. This increase is

hi than expected. Terms of agreement in Nova Scotia

have not been disclosed. MacPherson _indi- cated that student loans are

*Continued on page 4

to look for alterna ” -photo by Richard Haines

the academic priorities for the University. This identi- fication should be clear enough to serve as a basis for ion on program changes.

From the Role of Govern- ment:

1.28:“... During the course of the audit, no one has uestioned the — of freed om enjoyed by the University. In fact, most would argue that institutional and academic free- dom are essential if the University is to meet its mission and mandate as an institution of higher learning under the University Act.”

_From Accountability:

2.27: “. . . In my view, an annual report on perform- ance is for an institution as important as the University is the public of

hlights

Recommendation 2.31: The University’s annual report on performance should be referred, after tabling in the Legislative Assembly, toa Committee of the Legislature to pro- vide an oppo ity for the University to explain the report, and Members to deliberate and ask ques- tions of the University regarding the report.

From Academic Programs — Goals and Objectives:

7.10“Weexamined the goals and objectives within the Faculties of Arts and Science and the AVC.”

7.12 “The lack of goals and objectives can affect the University’s capacity to im- plement its mandate and to adjust to changing circum-

*Continued on page 5