Repository: UIHistories Project: Board of Trustees Minutes - 1988 [PAGE 414]

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BOARD OF TRUSTEES

[October 15

And Be It Further Resolved that said Bank shall rely upon the genuineness of said signatures so certified. And Be It Further Resolved that all prior resolutions heretofore adopted by this corporation authorizing the maintenance of its accounts and the transaction of its business with said Bank, be and the same hereby are revoked and cancelled. And Be It Further Resolved that the Secretary or any other officer of this corporation, is hereby authorized and directed to certify a copy of these resolutions and the names of its officers and such other employees as may be authorized to act in its behalf, to said Bank and said Bank is hereby authorized to rely and act upon such resolutions and certificate until formally advised by a like certificate of any changes therein.

On motion of Mr. Wolff, the foregoing resolution was adopted. Assignment of National Defense/Direct Student Loans

(13) Under Federal regulations, defaulted notes in the National Defense and Direct Student Loan (NDSL) programs may be assigned to the Federal government for collection after the institution has followed certain prescribed "due diligence" collection procedures. T h e Board of Trustees has approved such assignment several times over the last few years. This year, if the assignment is made prior to February 15, 1988, an institution can better its default ratio and enhance its eligibility for additional Federal capital contributions for 1987-88. The funds in question are held in trust by the University and loaned to students in accord with criteria established by the Federal government. They consist of Federal capital contributions plus institutional capital contributions equal to one-ninth of the Federal contributions. Collections and earnings are added to the funds and the expenses of the program are credited. Under the law, the loan and interest are cancelled in case of death or permanent and total disability. T o assist institutions in reducing their current default rates (which in turn will increase their eligibility for future funding), the Federal government has agreed t o accept the assignment of notes which have been in default for two or more years if the due diligence collection efforts have taken place. Loans assigned to the Federal government will not be counted in determining the University's default rate, but the government will retain any funds it may recover. T h e value, in terms of increased eligibility for Federal student loan support, is greater than the net recovery anticipated from the University's continued efforts at collection. T h e net assets of the loan fund will remain in excess of the University contribution to the fund. The vice president for business and finance has recommended the assignment of defaulted NDSL notes on which reasonable collection efforts have been made by the University in the following maximum amounts: Chicago campus Urbana-Champaign campus I recommend approval. $ 95 000 (90 loans) 109 000 (71 loans)

On motion of Mr. Wolff, this recommendation was approved. Resolution Designating Agents to Transact Securities for Health Maintenance Organization Plan Trust

(14) T h e University of Illinois Health Maintenance Organization Plan Trust was established by the Board of Trustees on March 21, 1985, for the purpose of funding a health maintenance organization ( H M O ) to be operated and administered by the University of Illinois Hospital. T h e University contributed $300,000 to the trust from the Hospital Income Fund to establish minimum capitalization and a special contingent reserve fund.