SLB sounds alarm - Students' future threatened with few funding sources in sight
Edmond Campbell, Senior Staff Reporter
The SENIOR management of the Students' Loan Bureau (SLB) is warning that the institution is not currently in a position to give any commitment that it will be able to provide loans in the upcoming academic year to thousands of applicants.
With the bureau strapped for cash and its reserves almost depleted, SLB Chairman Tony Lewars told a parliamentary oversight committee yesterday that the lending agency was in a "predicament" as it relates to identifying new sources to fund the J$6.4 billion needed for the 2014-2015 academic year.
Each year, an average 8,000 students apply for loans at the bureau.
Lewars argued that the institution has a responsibility to maintain its financial health and, as such, would not approve loans unless it had the money to make the payouts.
NOT SLB'S ROLE
Lewars was supported by Shellian O'Gere, legal officer at the bureau, who noted that it was not the responsibility of the SLB to source funding.
"If we continue to source and commit without knowing where the funds are coming from, we are threatening the viability of the fund," O'Gere said.
"So instead of funding persons who are returning and allowing them to complete their course of study, we will threaten … the entire pool. That's the decision the council (board of directors) will have to make pending the receipt of funds," she contended.
At the same time, the ministers of finance and education have engaged the private sector to determine whether it could play a greater role in the provision of student loans and financing of tertiary education.
"But the truth is we are talking big bucks - J$6.4 billion … . I am not sure the private sector, with the best will in the world, will be able to provide that, so we are in a predicament," the SLB chairman said.
However, members of the SLB's senior management team noted that the $2.5-billion funding gap for the current academic year has been significantly reduced.
SLB Executive Director Monica Brown told Parliament's Public Administration and Appropriations Committee that a US$20-million (J$1.9-billion) loan from the Caribbean Development Bank (CDB) has been approved to help cover the balance.
But before the funds are disbursed by the CDB, the Government has to provide a guarantee for the SLB.
"We need a drawdown of the CDB funds during the course of this first quarter, preferably, in order to continue the disbursements to the universities," Brown said.
The CDB will also provide grant funding to the tune of US$175,000 to cover the cost of a consultant who would be conducting a study on the SLB.
For the current academic year, the SLB was required to source funding amounting to J$4.7 billion to provide loans for its applicants.
The SLB had initially borrowed J$1.3 billion from its insurance fund.
Additionally, the PetroCaribe Development Fund provided a grant in the sum of J$100 million to the bureau.
Brown said internal flows and the depreciation of the Jamaican dollar also helped reduce the gap to J$350 million.
She said the Ministry of Finance has indicated it would provide funding to offset the shortfall.