Janesville55.8°

Whitewater closing leaves 116 out of work

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Kevin Hoffman
November 5, 2010
— A Whitewater credit collections agency says the government takeover of student loans and ailing financial market contributed to its closure this week, leaving 116 people out of work.

Sallie Mae in Whitewater closed Monday, marking the second major layoff in the city in the last month. In early October, Trostel Ltd., which designs and manufactures custom seals and molded rubber products, announced 87 permanent layoffs beginning in December.


"Obviously, this is a big blow to any community," City Manager Kevin Brunner said. "It's my understanding they lost the contract to administer student loans, and the federal government is administering those loans as opposed to contracting with groups like Sallie Mae.


"Hopefully, their fortunes might change, and they'll reconsider in the future."


In March, the federal government overhauled student aid by removing commercial banks from the loans process. The changes passed as part of health care reform.


All Sallie Mae employees will receive full pay until Dec. 31, and severance pay is available based on position and tenure, according to a letter from the business.


Almost all of those laid off were collectors. The layoff also included an auditor, two receptionists and a human resources representative.


The Gazette could not reach anyone at the business Thursday for comment.


The company instructed employees to call a hotline for updates, which includes information about resume workshops, financial planning sessions and a job fair scheduled for next week. About seven businesses are expected to attend.


Companies with 50 or more employees are required to give the state 60 days notice before mass layoffs or closings. Communications Director John Dipko at the state Department of Workforce Development on Thursday said it had not yet received written notification.


The letter already was provided to Brunner, and Dipko said it's likely in the mail.


The business, at 855 S. Janesville St., was formerly Arrow Financial. Sallie Mae in 2004 purchased majority ownership of the company.



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