- A sum of $2 billion has been earmarked in the Budget to bolster the Students Loan Bureau’s (SLB) ability to lend to tertiary students.
- The allocation will allow the lending agency to meet the anticipated demand at the same level, as was satisfied last fiscal year.
- The Minister informed that the Board of the SLB has approved a number of policy changes, which are expected to make it easier for students to qualify for loans.
A sum of $2 billion has been earmarked in the Budget to bolster the Students Loan Bureau’s (SLB) ability to lend to tertiary students.
Minister of Finance and Planning, Dr. the Hon. Peter Phillips, informed that the allocation will allow the lending agency to meet the anticipated demand at the same level, as was satisfied last fiscal year.
“There is a provision of $2 billion, which when added to the expected collections and funds in hand, will meet the demand projected to be approximately $4.8 billion,” he stated, while opening the 2014/14 Budget Debate in the House of Representatives on April 17.
In the meantime, the Minister informed that the Board of the SLB has approved a number of policy changes, which are expected to make it easier for students to qualify for loans and reduce the overall delinquency rate.
Among the proposed changes is the decision to extend the moratorium period for particular target groups of beneficiaries. These include nurses, pharmacists, and mechanical engineers.
“Whereas now there is a fixed moratorium period for all SLB beneficiaries, which ends on December 31 of the year in which their course ended, the moratorium period will be extended for these groups to include the time before they are licensed to practise their profession, instead of the December when their courses are finished,” Dr. Phillips explained.
He said this will ensure that the beneficiaries have a capacity to earn before they are required to start repaying their loans.
The SLB will also be implementing a two-tiered system of interest rates. This, he said, will ensure that the interest rates during the moratorium period will be lower than the interest charged during the payment period. This is expected to reduce the monthly payments for the beneficiaries.
Requirements pertaining to guarantors have also changed. Among the changes is the requisite age range for sponsors. Dr. Phillips noted that whereas guarantors previously could not be older than 60 years old, this rule is now being relaxed, so that guarantors may be accepted beyond the age of 60. This will be done on a case by case basis, depending on their financial capabilities and providing they fulfil the other stated requirements.
The SLB is also relaxing the rule whereby one guarantor could only provide a guarantee for one student. “Now an individual with the financial means will be able to provide guarantees for up to a maximum of three students, provided that he/she proves to be financially capable,” the Minister informed.
It is also proposed that the interest due on outstanding loans to the SLB will not be calculated any longer in the current ‘add on’ basis, but on the reducing balance, thus reducing the monthly payment for beneficiaries who pay.
These changes and others should go a far way toward making student loans more accessible and more affordable to potential beneficiaries, the Finance Minister said.