US firm reports $50M income from CSLP
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Topic: US firm reports $50M income from CSLP
Posted By: administrator
Subject: US firm reports $50M income from CSLP
Date Posted: 06/April/2006 at 12:07pm
From Canadastudentdebt.ca
Press release
April 6th, 2006
US firm claims over $28 million dollars income in 6 months from student loan servicing! That money could be put to better use funding interest relief for another 20,000 people!
If Edulinx gets the renewal of the student loan administration contract, CIBC gets another 6 million dollars from Nelnet! That money should be used to pay for the damages to graduates whose forms were lost by CIBC, or at least fund debt reduction!
The parent company is concerned that students will pay off their loans quickly, leading to reduced PROFITS! Student loans should not be a “profit center.”
The new Harper conservatives should take immediate action to restore faith, fairness and accountability in the Canada Student Loan Program.
Mark O’Meara
Founder, Canadastudentdebt.ca
Here’s the source info:
Accession Number 870156-5-108
http://www.secinfo.com/$/SEC/Filings.asp?AN=0000870156-05-00 0108&Find=edulinx
Page 25
OTHER INCOME. Loan and guarantee servicing income increased due to the acquisition of EDULINX in December 2004. EDULINX recognized $28.5 million of servicing income during the six months ended June 30, 2005.
Page 28
On December 1, 2004, the Company purchased EDULINX in a business combination for $7.0 million. An additional payment of approximately $6.3 million is to be paid by the Company if EDULINX obtains an extension or renewal of a significant customer servicing contract that currently expires in February 2006. This contingency payment is due following the date on which such extension or renewal period of the servicing contract commences.
Page 31
With respect to EDULINX, changes in the Canada Student Loans Program, or the CSLP, which governs the majority of the loans serviced by EDULINX, could result in a similar negative impact on EDULINX' business.
PAGE 36
The business of servicing Canadian student loans by EDULINX is limited to a small group of servicing customers and the agreement with the largest of such customers is currently scheduled to expire in February 2006. EDULINX cannot guarantee that it will obtain a renewal of the servicing agreement with this largest customer or that it will maintain its other servicing agreements and the termination of any such servicing agreements could result in an adverse effect on its business.
PREPAYMENT RISK
Pursuant to the Higher Education Act, borrowers may voluntarily prepay loans made under the FFEL Program at any time in full or in part. Prepayments may also result from consolidating student loans, which tends to occur more frequently in low interest rate environments, and from borrower defaults, which will result in the receipt of a guarantee payment. The rate of prepayments of student loans may be influenced by a variety of economic, social, and other factors affecting borrowers, including interest rates and the availability of alternative financing. The Company's profits could be adversely affected by higher prepayments, which would reduce the amount of interest the Company receives and expose the Company to reinvestment risk.
Page 41
FOREIGN CURRENCY EXCHANGE RISK
The Company purchased EDULINX in December 2004. EDULINX is a Canadian corporation that engages in servicing Canadian student loans. As a result of this acquisition, the Company is exposed to market risk related to fluctuations in foreign currency exchange rates between the U.S. and Canadian dollars. The Company has not entered into any foreign currency derivative instruments to hedge this risk. However, the Company does not believe fluctuations in foreign currency exchange rates will have a significant effect on the financial position, results of operations, or cash flows of the Company.
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Administrator
Mark OMeara
Author of Let Go and Heal: Recovery from Emotional Pain
https://LaughSingWrite.com - http://bit.ly/heal2024
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