Amendments are to be made to the legislation pertaining to the Students Loan Bureau (SLB), to facilitate deductions at source, to ensure that loans are repaid by borrowers.
However, in the interim, employers in the public sector will be authorized to deduct payments from employees who have outstanding loans with the SLB and remit these to the Bureau.
This was disclosed by Minister of Finance and Planning, Dr. the Hon. Peter Phillips,as he opened the 2013/14 Budget Debate in the House of Representatives on April 18, under the theme: ‘Restoring Hope – Expanding Opportunity’.
“Employers in the private sector are being encouraged to facilitate these deductions from the salaries of their employees as their contribution to the effort to expand opportunities to our young people who are unable to access tertiary education without the help of the SLB,” the Minister added.
Dr. Phillips also noted that the recent introduction of a Credit Bureau should help in reducing the high delinquency rate, as the credit worthiness of persons will be recorded for future transactions.
Meanwhile, the Minister emphasized that it is critical that tertiary institutions periodically review the types of programmes and courses offered to determine their relevance to the market needs.
He said this will assist students in getting jobs on graduation and as such, will be able to repay their loans, so that the demand on government for funding can be reduced.
Over the last six years demand for students’ loans has increased, with the number moving from 6,600 in 2007 to 16,600 in 2012, and this is projected to increase to over 20,000 for the upcoming academic year.
This increased demand, coupled with the annual increase in tuition costs by tertiary institutions, has resulted in significantly increased pressure on the limited resources of the SLB to meet the growing demand, which is estimated to reach $20 billion in the 2015/16 financial year.
Of this amount, inflows of approximately $12 billion will be sourced between now and 2015/16 from the recent increase in Education Tax and from loan repayments.
“This will still leave a shortfall of approximately $8 billion for the period,” Dr. Phillips noted.
He informed that 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.
“The SLB is (also) engaged in discussions with private sector financial institutions to induce their participation in funding the demand for tertiary education. These discussions are progressing well and the details are being worked out as to the terms and conditions of the private sector’s participation in this undertaking. Once this is finalized, the SLB will be in a position to determine the extent to which further funding may be available,” Dr. Phillips said.
By Latonya Linton, JIS Reporter