4
      UPEI
      News
     
     
      Royal
      Bank
      pulls
      out
      of
      student
      loans
     
    
   
   
    
     
      *Continued
      from
      page3
     
     
      complicated
      and
      hard
      to
     
     
      administer,
      which
      was
      one
     
     
      reason
      it
      was
      turned
      over
      to
     
     
      the
      banks
      in
      the
      first
      place.
     
    

    
     
      “The
      banks
      know
     
     
      more
      about
      lending
      and
     
     
      managing
      accounts
      than
      any
     
     
      government
      employee,”
      he
     
     
      added.
      But
      he
      was
      quick
      to
     
     
      point
      out
      that
      the
      government
     
     
      controls
      who
      receives
      student
     
     
      loans.
     
    

    
     
      Some
      bankers
      are
     
     
      concerned
      about
      the
      high
     
     
      debt
      loads
      students
      face.
     
    

    
     
      “We're
      asociety
      that
     
     
      isconsumer
      driven...
      .
      [putting
     
    
   
   
    
     
      students
      in
      debt]
      starts
      to
     
     
      slow
      the
      economy,”
      com-
     
     
      mented
      one
      official.
     
    

    
     
      John
      McRae,
      Metro
     
     
      Credit
      Union
      administrative
     
     
      assistant,
      suggested
      that
      fi-
     
     
      nancial
      institutions
      are
      in-
     
     
      volved
      in
      student
      loans
      to
     
     
      build
      a
      future
      customer
      base.
     
     
      Both
      the
      Credit
      Union
      and
     
     
      the
      CIBC
      renewed
      their
     
     
      contract
      with
      the
      PEI
      gov-
     
     
      ernment.
     
    

    
     
      The
      Royal
      Bank,
     
     
      which
      had
      profits
      of
      1.82
     
    
   
   
    
     
      billion
      dollars
      last
      year,
      did
      not
     
     
      see
      the
      double
      in
      premiums
     
     
      offered
      by
      the
      government
      as
     
     
      adequate.
      Some
      students
     
     
      have
      questioned
      the
      Royal’s
     
     
      decision
      to
      stop
      providing
     
     
      student
      loans.
     
    

    
     
      “It’s
      like
      they’re
      tod
     
     
      ing
      away
      the
      investment
      from
     
     
      something
      that’s
      so
      important
     
     
      ...
      Ifthey
      are
      making
      record
     
     
      profits
      vy
      year,
      how
      much
     
     
      are
      the
      ly
      losing?”
      asked
     
     
      Erin
      Fagan,
      a
      second
      year
     
     
      English
      student.
     
    
   
   
    
     
      The
      Cadre
     
    
   
   
    
     
      Kirby
      asserted
      that
     
     
      default
      rates
      were
      much
     
     
      higher
      than
      expected.
      But
     
     
      when
      asked
      for
      default
      fig-
     
     
      ures,
      he
      indicated
      that
      he
     
     
      could
      not
      discuss
      these
      de-
     
    
   
   
    
     
      “[It’s]
      proprietary
      in-
     
     
      formation,”
      ety
      replied.
     
     
      Kirby
      was
      also
      un-
     
     
      able
      to
      provide
      specific
     
     
      information
      on
      how
      default
     
     
      rates
      are
      collected.
      Although
     
     
      a
      student
      loan
      is
      declared
      in
     
     
      default
      after
      two
      missed
     
    
   
   
    
     
      ¢
      12
      January
      1999
     
    
   
   
    
     
      payments,
      it
      is
      not
      known
      if
     
     
      the
      default
      figures
      include
     
     
      students
      who
      have
      begun
     
     
      repayment
      after
      defaulting,
     
     
      or
      ifthe
      figures
      are
      restricted
     
     
      to
      loans
      that
      are
      never
     
    
   
   
    
     
      repaid.
     
    

    
     
      -
      Several
      groups
      have
     
     
      estimated
      the
      national
      number
     
     
      of
      students
      who
      never
      repay
     
     
      their
      loans
      to
      be
      eight
     
     
      percent.
     
    
   
   
    
     
       
     
    
   
   
    
     
       
     
    
   
   
    
     
       
     
    
   
   
    
     
       
     
     
         
     
     
          
     
    
   
   
    
     
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