Chris Bodnar more in risk premiums from TTAWA BUREAU CHIEF Ottawa, while other pegged OTTAWA (CUP) - Both government and banking officials cannot provide key information about Canada's student loan system, a Canadian University Press (CUP) in- vestigation has revealed. Last week, three of Canada's largest banks - the Royal Bank, CIBC and Scotia Bank - announced they were no longer admin- istering the Canada Student Loans program for the fed- eral government. Monetary losses and lack of financial guarantees from Ottawa for defaulted loans were cited as reasons for the pullout. These three banks had administered the pro- gram since 1995, when Human Resources Development Canada transferred the loan system from their department to the _ private sector. <4 Yet immediately fol- ’ lowing the bank announce- ment, conflicting reports began to circulate about thereal cost of the program and the true demands of the banks. Media reports said the loan system cost anywhere from $1-billion to $1.8-bil- _ lion a year toadminister. Other stories said the banks wanted $75-million Aeewes we moon e iat page 14 the number at $100-million. And questions about the true number of student loan defaults were rampant, as critics accused the banks of inflating the default rate numbers. But clarifying details with those involved isn't easy. "Have you called the government?" asked Shan- non Bonus, a representative from CIBC, responding to an inquiry about how many student loans the banks fi- nanced. "That sounds like an industry number. Have you called the Canadian Bank- ween wee ers Association?" Sharron Wilks, of the Canadian Bankers Associa- tion, replied that only Human Resources Development Canada and the three banks involved with the program keep these numbers. "Only three of our members are involved, so we don't keep those num- bers," said Wilks. "You'll have to contact the member banks involved." Meanwhile, Steve Dyck, a representative from the Royal Bank, cited figures as reported in the media. He said the default rate on stu- dent loans is at 27 per cent, citing HRDC figures he said he saw. "T think that's an accu- rate number," said Dyck. Dyck also said his bank may have lost be- tween $100- to $160-mil- lion annuallyin administering student loans, but he couldn't provide specific numbers. When asked how much the banks spent in ad- ministering the program, Dyck wouldn't commit to numbers. Upon suggestion that some media outlets reported _ the amount to be $1-billion, he responded, "I don't know if that's an accurate number." The government wasn't being any more help- ful than the banks. Gino Trifiro, an HRDC spokesperson, told CUP he didn't know how much the student loan systemcost the banks to ad- "We can't calculate the cost last year because we -were not administering the system," he said. "What we can say is that starting August 1 we will have to raise the capital to run the program, and that is $1.8 billion." Current figures kept by Statistics Canada show that Canadian banks had a total of $3.6-billion lent out in the form of government- guaranteed loans. Government critics say this figure points to the fact that the system is likely losing money, and that a vi- tal trust was broken be- tween the banks and the government. "This program was a disaster and the banks re- alized the situation wouldn't improve," said Henri Sader, a researcher for New Democratic Party MP Lome Nystrom. "The banks wanted to be perceived as white knights for financing education. Instead they be- came the arm twisters fore- ing students into debt." If the $3.6-billion fig- ure is correct, said Sader, and you assume that 20 per cent of students default on their loans, then you can conclude that the three banks were collectively los- ing $700,000 annually. But accurate default rates are also hard to come by. The latest figures from Ottawa show 80 per cent of students repay their Canada Student Loans without incident, while 13 per cent repay their loans after defaulting at least once. In other words, 93 per cent of students eventually repay their federal loans. These numbers, how- ever, date back to 1995 - the same year the three ma- jor banks begin administer- ing the student loan system. Student oans