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Keeping abreast of Student Loan debt

Published:Sunday | June 15, 2014 | 12:00 AM

Oran Hall, Personal Financial Adviser

I read in the Sunday Gleaner about the SLB partnering with CRIF NM Credit Assurance Ltd by sharing information on all borrowers of the institution. I seek your assistance in getting some information for myself. My daughter is ending her second year, to commence her third year of her four-year nursing programme. She attends UTech. I need to know how much is sent to the school each school year. UTech won't tell and SLB said they were unable to give that information when my daughter went to their office.

Now, at the beginning of the loan, SLB got financial information from UTech on the cost of the programme and agreed to finance same. Now, every school year I have to pay processing fees of between $12,000 and $16,000, which I think is unfair because we already agree that it is a four-year programme.

My daughter or I will have to repay this loan and we must know how much is paid each year so that we can keep our own account. If we are not aware of how much is sent to the school or how much is received that could not be honest to us. I am therefore asking if you could assist us to get the amounts paid to the school for 2012/13 and 2013/14. If the SLB can give his information to a credit bureau, why not the borrower who must repay their loan?

- Joycelyn

FINANCIAL ADVISER: The information that follows is based on general discussions I had with a representative of the Students' Loan Bureau (SLB) and a representative of the University of Technology (UTech), but you do understand that I am not in a position to say what the numbers for your daughter are as neither institution could reasonably give me that information.

The practice of the SLB is to provide a letter at the end of the borrower's course, stating the amount borrowed each year, the full sum borrowed, the rate and the monthly payment.

To know how much is borrowed, the best course is for the student to go to the SLB rather than requesting the information by the telephone, as the representatives need to be certain of the identity of the person to whom the information is being given.

In addition to the borrower, the guarantor may also request the information from the lender.

Upon the approval of a loan application, the SLB advises the applicant, usually by electronic mail. The loan agreement sent to the borrower states the loan amount, the cost of the insurance and the processing fee, and it has to be signed by both the borrower and guarantor before the funds are disbursed to the educational institution.

The SLB does not issue an annual statement because it generally approves loans for the full term of the course of study, and thus gives a statement at the end of the course.

The processing fee and insurance that are charged relate to each tranche of the loan, that is, they relate to the portion of the loan disbursed each year.

With regard to the processing fee, loan information has to be submitted and processed each year that funds are to be paid for the student, as each year has a different loan amount. Bear in mind that a student may choose not to borrow in a particular year.

According to UTech, once the SLB has disbursed funds for one of its students, its cashiers are able to provide a stamped and signed receipt stating the amount paid for a particular semester or academic year from the information on its system.

Students who need to know how much the university has received for them should, therefore, request a receipt from the cashier. Students may also see a customer service representative in the Students Financing Section of the Department of Finance and Business Services.

This receipt is important for reconciling the funds applied to the student's account at UTech with the funds disbursed by the SLB. Differences between them may arise for two main reasons. The SLB may pay more than is required because the student may do fewer than the normal number of courses, or may get exemptions from some courses by benefiting from the transfer of credits from other institutions or UTech itself.

Additionally, the SLB's estimate of how much the student needs may be more than the sum required. Where the sum disbursed is more, the university returns the surplus to the lender. It is thus very important to have correct and current records to reconcile any likely discrepancies.

The information I have received from both institutions suggests that both do provide the information your daughter wants to know. The cashier and a customer service representative in Student Financing at UTech should be able to help.

The contract which your daughter and her guarantor sign each year also states the sum borrowed. It would make sense to print or save a copy.

Oran A. Hall, a member of the Caribbean Financial Planning Association and principal author of 'The Handbook of Personal Financial Planning', offers free personal financial planning advice and counsel.