Member of Parliament for North West St. Ann, Dr. Dayton Campbell, is recommending that adjustments be made to the Student Loan Bureau (SLB) to focus on areas of study that are critical to nation development.
“I believe the SLB should first concern itself with making loans available to persons pursuing tertiary studies in areas…such as Mathematics, Pharmacy, Engineering, the Sciences,” he stated.
Dr. Campbell was opening the debate on a private members motion on funding for tertiary education, on June 11 in the House of Representatives.
He stated that new programmes should be assessed for relevance, in terms of whether they “respond to labour market needs, foster innovation or serve community aspirations, before approval”.
Dr. Campbell said that while he is not suggesting that persons pursuing degrees that are “oversubscribed” or those with “a low employment potential” should be denied tertiary education, the SLB’s limited resources should be directed to those areas which are of strategic importance to the country, and at lower interest rates.
These rates, he noted further, “should be inversely proportionate to the need of the area for national development thus the higher the need the lower the interest rate”.
According to Dr. Campbell, the country is in need of Mathematics and Science teachers and in order to increase enrolment in these areas, students should get incentives to pursue these subjects at the tertiary level.
“I want to take it a step further and propose that no income tax be collected for the first three years of employment for Mathematics and Science teachers, who needed state financing to complete their studies. This portion would instead go straight to the Bureau as a part of their repayment,” Dr. Campbell said.
He also proposed the establishment of an income-contingency repayment plan, which would base the monthly loan repayments on the salaries of borrowers. He noted that such a loansystem addresses risk and uncertainty faced by individuals by providing insurance against inability to repay and improves progressiveness by providing a lower public subsidy for graduates that obtain higher private returns.
Demand for student loans has increased over the last six years, moving from 6,600 persons in 2007 to 16,600 in 2012, and is projected to swell to over 20,000 persons for the upcoming academic year.
The growth in demand, coupled with the annual increase in tuition costs, has significantly increased the pressure on the limited resources of the SLB to provide loans, which is estimated to reach $20 billion in the 2015/16 financial year.
For the 2013/14 academic year, approximately $4.9 billion is required to fully cover the projected demand, which will be financed by the Education Tax and loan inflows from the Caribbean Development Bank (CDB).
On March 19, the House of Representatives approved a Government guarantee of a US$20 million loan from the Caribbean Development Bank (CDB) to the SLB.
By Latonya Linton, JIS Reporter