Boost of $1.7 Billion to SLB means more Loans to Students

The recent allocation of $1.7 billion by the Jamaica Bankers Association (JBA) to the Students’ Loan Bureau (SLB), will significantly increase the institution’s ability to lend to needy students who wish to pursue higher education.
Lenice Barnett, Executive Director of the SLB, tells JIS News that the allocation of the fund will indeed increase the resources that will be available to qualified applicants of the loan scheme.
“I would like to say that it is a tremendous offering by the JBA and it is something that will certainly help, not just the students, but the country and everybody involved, and it will certainly increase our capacity to lend significantly and allow us to increase the grant aid as well,” she adds.
Mrs. Barnett emphasizes that the entire sum of $1.7 billion, which will be issued to the SLB before year-end, will be used wisely. “It is not an infinite sum, when you consider that for a year we lend over $600 million in loans and up to $80 million in grants and aids,” she says, adding that these figures are going to increase significantly as the discrimination between university and non-university applicants is removed.
The Executive Director points out that there could be an additional 2,000 prospective borrowers who attend teachers’ college, private institutions and community colleges. “Formerly, persons in those institutions got up to $35,000 to borrow and their fees can be as high as up to $100,000, so when we remove the discrimination we are talking about an increase of at least $100 million,” she says, adding that all eligible persons can now get the full cost of tuition. For those students considered to be the poorest of the poor, the provision of a grant, separate and apart from the loan, is also given to assist with other expenses incurred as a student. For those persons enrolled in one of the three universities in Jamaica, their grants will now be $50,000, while for non-university students, the grant for this year will be $25,000. “Our grant-in-aid is going to be in the region of up to $130 million, an increase from $80 million,” Mrs. Barnett adds.
She also notes that the interest rate on loans to students has been reduced from 16 to 12 per cent. “In the past, there has been so much negative discussion on the interest rate and nobody seems to remember that it has dropped from 22 per cent to 16 per cent and it has taken a further slide to 12 per cent,” she informs.
Mrs. Barnett stresses the importance of students repaying their loans. “This is a recurring expenditure and the fund is largely replenished from repayments,” she explains.
For those who are unemployed and legitimately are unable to pay, Mrs. Barnett says this needs to be communicated. “The fact of the matter is that I don’t know how many people are not working if they don’t tell me. If they are not working there are a lot of things that can be done. We have a facility called deferment. We have another called restructure and we have recourse to guarantors,” she says, adding that a distinction has to be made between getting the job you want and the job you get.
She notes that the SLB has had to “bend backwards” to take a risk that no other financial institution would take. “We are expected to always have funds to increase the amount of loans to the number of students. Other students are waiting on the very money that you are holding. It is not just about giving it back to the Bureau, it is a process,” she says.
The publishing of photographs of delinquent borrowers is not the delight of the SLB. However, it has become necessary due to lack of communication from delinquent borrowers. “There is never a photograph published unless the person has not paid for 365 days. Before we publish their photographs, there are two things we know for sure – they (delinquent borrowers) are working, and they are in the banking sector doing some other kind of payment,” points out.
Mrs. Barnett tells JIS News that there are two sets of people who are never photographed – persons who have become ill or those who demonstrate an act of good faith. “We have quite a significant number of persons who have become mentally and physically ill. We would never publish those, unless of course we don’t know because nobody told us; and we don’t publish those persons who have demonstrated good faith. It is the absence of good faith upon which we act,” she says.
She is adamant that the repayment period for loans is not too short. “In Jamaica, when you look at our economic context presently and the fact that every loan has a life of 10 years, on average of four years nobody pays a penny because we do give a moratorium each year,” she points out.
The Executive Director says the SLB prides itself on efficiency, and that the organization is highly automated, with a staff of 56 persons, most of whom are qualified at the tertiary level. “We processed 6,000 applications (in April) and this speaks volumes about the efficiency of the staff of the SLB,” she adds. Mrs. Barnett notes that the approval of a loan is just one stage of the process. “Once we determine who is to get a loan and grant, we have to advise each applicant that he or she needs to come in with the guarantors. Each person has two guarantors, and we must interview them. We must have the documentation signed, the executed documents packaged and we must do what we have to do to get the money to the school on time,” she explains, adding that this is not a one-day process.
She explains that the government has mandated the SLB to give each eligible person a loan, once he or she qualifies. “We are committed to giving each qualified person a loan as well as a grant-in-aid aid. That will allow you to understand why the verification process is so painful. Why the questions we ask are so important and why once we have taken in the application, we have months of work to do,” she adds.
Since 1996, Mrs. Barnett reports that some 50,000 loans amounting to some $2.7 billion have been given to eligible persons. Grant-in-aid amounting to $462 million have been given to some 39,000 students.
“We have equipped persons to step out of poverty and bring future generations out, and they now have the capacity to change this country,” says Mrs. Barnett.
The Executive Director says the staff of the SLB is highly motivated to deal with applications, but the crowd of students who apply at the end of April each year is really a problem. “This is absolutely unnecessary, because they can apply from as early as January,” she argues.