Mon | Jan 16, 2017

$2.5-billion boost for student loans

Published:Wednesday | March 31, 2010 | 12:00 AM

Nadisha Hunter, Gleaner Writer

The Students' Loan Bureau (SLB) is moving to allay fears that it might not have the money to meet demand for the next fiscal year.

The SLB said it will have an additional $2.5 billion to offer in loans and grants in the 2010-11 fiscal year which starts April 1.

According to the SLB, it is expecting more than 10,000 loan applications, of which more than 8,000 are likely to be approved.

This would mean total dis-bursement of more than $2 billion based on the present tuition forecast.

The SLB said it plans to implement a sustained collection drive by expanding the number of outlets islandwide to put the brakes on a slowdown in repayments, a likely result of the current economic downturn.

The bureau said it would be lobbying for legislative reform to reduce delinquency.

Up to May last year, borrowers owed the bureau $760 million - accounting for 7,127 delinquent borrowers.

Delinquents

Most of the delinquents were graduates of the University of the West Indies, Mona, and the Univer-sity of Technology, Jamaica.

Lenice Barnett, executive director of the SLB, has previously claimed that bad loans, some dating back to 1996, had handicapped the bureau in its drive to remain viable and to provide assistance to new students.

On the same note, Prime Minister Bruce Golding told Parliament last year that the rate of SLB-loan delinquency was linked mainly to students leaving universities and being unable to find employment.

"The Students' Loan Bureau is faced with a dilemma. They are financing studies for students, many of whom, having qualified, are unable to find employment and, therefore, are unable to pay back the money, and they become the subject of some persistent pressure from the Students' Loan Bureau to pay back," Golding had said.

He announced that his Govern-ment would be steering the SLB in a direction in which it would be inclined towards areas of study deemed critical to national development.

This was met with criticism from secondary-school students who described the plans as unfair, saying they would not be willing to change their career goals to get special treatment from SLB.

The bureau plans to improve operational efficiency through integration of business

processes, records management as well as changes in technology infrastructure.

According to the bureau, this is expected to facilitate a boost in collections and customer relations.

The SLB is projecting a net surplus of $651.75 million, representing a marginal increase of $5.5 million over an estimated $645.98 million.

The agency has attributed the positive performance primarily from growth in principal and interest repayment, investment income, as well as application and processing fees.

nadisha.hunter@gleanerjm.com