Sun | Aug 28, 2016

Change student loan strategy

Published:Monday | November 12, 2012 | 12:00 AM

Reserve disbursements for studies critical to national development

There is a motion standing in the name of the member of parliament for North West St Ann, Dr Dayton Campbell, which calls on the Parliament to urgently debate ways to fund tertiary education.

Dr Campbell's motion says: "Whereas the country's development is directly linked to the educational qualification of its citizens; and whereas the cost of tertiary education has a direct bearing on national development: Be it resolved that, given the perilous trajectory on which the Students' Loan Bureau finds itself, which is one that raises the question of viability, the Human Resource and Social Development Committee be mandated to urgently examine the adequacy and affordability of funding tertiary education in Jamaica and report to this Honourable House on its findings and recommendations."

We urge Phillip Paulwell, the leader of government business in the Lower House, to give meaning to the word "urgently" in the motion and have it considered by the House within short order.

Not the first

It is not the first time such a motion has been brought to the Parliament for consideration. In the last Parliament, Ronald Thwaites, then an opposition member, brought a similar motion. It stayed on the table of the House until it got grey hair and started to wrinkle, and despite being eventually debated, not much came of it as the Parliament was dissolved shortly thereafter.

Dr Campbell's motion should not be allowed to suffer a similar fate; but we do not believe that it should be debated for debate sake. It is our hope that MPs who intend to participate in the debate would have already been doing the research and canvassing their constituents for creative ways to fund tertiary education. Dr Campbell has the responsibility to ensure that when he gets the chance to open such a debate, it is of such a high level that those coming after him would be hard pressed to follow.

In fact, The Gavel serves warning that intellectually deficient contributions will be frowned upon. Discussions on funding tertiary education should not sink to the level of Senator Robert Montague's populist and emotionally charged rant. Montague, speaking in the Senate last Friday, said the Government should fire its consultants and use the more than $255-million-plus savings to provide support for the Students' Loan Bureau (SLB).

The SLB has said it is facing a crisis of viability. In October, the SLB's executive director, Monica Brown, said only approximately $1.7 billion, or 41 per cent of the projected $4.2 billion to be disbursed, had been identified. We believe the SLB has found itself in this position because it is seeking to offer loan financing to everyone who comes knocking. Such a model is a recipe for perpetual crisis.

The SLB must stop concerning itself with trying to give loans to all students who have applied for tertiary education. Instead, we believe the SLB should first concern itself with making loans available to persons pursuing tertiary studies in areas critical to national development such as pharmacy and engineering.

Former Prime Minister Bruce Golding, in 2009, said instructions were given to Ministry of Finance staff to come up with a list of disciplines the Government considered to be priority. We believe it is time for that list to be brought to the Parliament for consideration, and thereafter, communicated to all Jamaicans. With this, people will know they pursue certain disciplines with the great risk of not being able to access government funding, and if they did, it would be at a much higher cost when compared to disciplines considered critical to national development.

We are not suggesting that persons doing history, sociology, psychology, communications, and the other dime-a-dozen degrees should be denied tertiary education - far from it. We are merely suggesting that limited funds be directed to those areas which are of strategic importance to the country, and at lower interest rates.

Thwaites right

We are encouraged by the posture of Education Minister Ronald Thwaites on this issue, and we hope there is long-lasting truth to his recent statement: "There is no entitlement for the people of Jamaica to pay for everyone's tertiary education." The minister correctly pointed out that "those who receive financial assistance for education must be those who need it, first of all, and secondly, who are going to contribute to the upliftment of the nation and be able to fit with workforce needs."

We associate ourselves with that view.

The time has long come for the country to confront the many challenges of effectively funding tertiary education. We believe the answer partly lies in accelerating the pace at which credit bureaux are able to operate. Perhaps an urgent review of the playing field is needed at this point, especially when one considers that Parliament passed the legislation to enable credit bureaux in 2010.

Three licences have been issued by the Government, and one entity has indicated it will be on stream by next year. The Government must seek to offer all the support to enable the roll-out of these entities.

It is our view that these entities hold the key to people being able to access loan financing at a fair rate. If credit-rating companies operate in the way it is envisaged, and private financial institutions create student-loan packages, it would be a new day for funding tertiary education.

But of course, that's a big IF.

The challenge of funding tertiary education did not come upon us overnight, and we don't believe the problem will be solved by waving a magic wand. As such, we must take deliberate, long-term actions to ensure our children receive the best education. Certainly, responsible parenting is the place to start. Every parent should start saving for his or her child's education from birth. It is irresponsible and downright careless for parents to bring children into this world and leave their future to either chance of the generosity of the State, or some philanthropist.

NIS support

In the interim, however, we wonder whether the National Insurance Scheme (NIS) could be called upon to support the SLB over the next five years. We acknowledge that the NIS, too, is facing a crisis of viability, but if actuarial studies support it being able to assist, we believe it should be pursued. This, of course, is subject to the assistance being permitted within the legal framework of the laws governing the NIS.

If this proposal is workable, we further suggest that beneficiaries of NIS funds be required to give up an additional one per cent of their salaries when they make their statutory contribution to this pension scheme.

Another avenue that is worth considering is the setting up of a national tertiary education fund similar to the way the National Housing Trust is set up. The Gavel does not claim paternity for this idea, but we find it to be a worthy prospect. The gravamen of this proposal is that parents contribute money to this fund and would be able to draw down on it at the time their child reaches the age for university education.

This, however, will mean that the Government will have to be like Lot's wife in managing these funds. It should not be subject to any form of abuse.

We also need to seriously consider the cost of tertiary education. The Government is spending $11 billion of its $74-billion recurrent budget on recurrent bills in tertiary education. With this subvention from the State, students are required to pay 20 per cent of their tuition fees.

Even without evidence to support it, our anecdotal university experience has left us convinced that a huge portion of the 80 per cent subvention is the victim of inefficiency. A complete review of the operations of our tertiary institutions will either disabuse our minds that monies are being wasted, or will be the basis for the reduction of fees at these institutions.

In the same vein, we join Dr Kofi Nkrumah-Young, vice-president, planning and operations, at the University of Technology, who a few years ago called for the establishment of a tertiary commission to manage the allocation of the State's funds to all approved tertiary institutions in a transparent and equitable manner.

We do not hold ourselves out as having the answers to tertiary education. We are convinced, however, that notwithstanding this challenge, the answer lies in the collective wisdom of the Jamaican people. Somewhere out there are possible answers, and we need all the suggestions on the table.

It is for this reason we urge tertiary students, parent-teacher associations, and youth clubs to take the lead in discussing this issue of funding tertiary education. We expect that when Dr Campbell's motion is referred to the Human Resource and Social Development Committee of Parliament, its chairman, Rudyard Spencer, will do the right thing and invite submissions from the public.

It would be a travesty if our collective voices remained silent on this issue.

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