January 23, 1998
KALAMAZOO--Western Michigan University will contract with a private firm to administer its federal student loan programs.
The WMU Board of Trustees Jan. 23 authorized the administration to negotiate a contract with University Accounting Service Inc. of Brookfield, Wis. Terms and dates of a contract have not yet been worked out, said Robert M. Beam, vice president for business and finance.
"We have struggled with account maintenance, system reconciliation, collections and default reduction in the administration of these programs," Beam said. "We decided to pursue an alternate solution that we believe will provide better service for less cost."
Beam said he expects the University to save about $75,000 per year. The move will eliminate 2.5 positions from the WMU payroll in customer account services. Persons in those positions will be reassigned. A committee of student financial aid and business office staff members was unanimous in selecting UAS.
"A full-service provider such as UAS will offer more services of equal or higher quality and at less cost than operating the program ourselves," Beam said. "Vendors were evaluated on the basis of level, quality and cost of services."
WMU has about 2,500 active loan accounts valued at some $7 million through the National Direct Student Loan/Perkins Loan programs, which offer loans to students at a relatively low interest rate. The new arrangement could be implemented as early as April 1.
"Through the use of its own systems and staff, UAS will maintain loan history and interaction with the borrower," Beam said. "The firm also will provide more extensive procedures for past due accounts, which will assist in loan repayment and reduce default rates."
UAS provides services to 15 institutions in Michigan, including four-year public, private and community colleges. Public institutions in the state include Central Michigan, Ferris State, Michigan Technological and Northern Michigan universities and the University of Michigan. In Kalamazoo, the firm serves Kalamazoo College and Kalamazoo Valley Community College.
In other action, the board approved a recommendation to revise the University's investment policy on annuity and life income funds. The changes state that the policy should not include donor-restricted assets, indicating that any exceptions would fall outside the policy. It also provides for a new asset category called a net income unitrust.
The board also authorized the administration to renew a lease agreement for a facility at 751 Pleasant Ave. in Kalamazoo for use by the Center for Developmentally Disabled Adults, which WMU operates under contract with Kalamazoo County. The monthly rate for the new three-year lease is to be $2,839. The Pleasant Avenue facility is one of four that WMU rents for this program.
Office of University Relations
Western Michigan University
1903 W Michigan Ave
Kalamazoo MI 49008-5433 USA