SLB Working to Remove Stigma

The Students’ Loan Bureau (SLB) no longer wants to be seen as the institution that provides loans for only needy students.

“We don’t want that stigma. We want to be known as the institution of choice that provides funding for tertiary-level studies,” Executive Director of the SLB, Monica Brown, tells JIS News.

She says that the 48-year-old institution’s mission is to provide affordable financing to all students pursuing tertiary education, thereby contributing to national development. For a long time, the issue of access to tertiary education has been of concern to administrations, but with the change in policy direction of the Bureau, it is being made much easier.

According to Ms. Brown, needy students will continue to get priority with special emphasis on those beneficiaries under the Programme of Advancement through Health and Education (PATH).

She notes that the Bureau has been moving decisively in the direction of ensuring that those who qualify to pursue tertiary education, but can least afford it, have access. The SLB is also mandated to take a broad-based approach to tertiary education, and is therefore partnering with organisations within the tertiary sector to ensure that the sector is aligned to the productive needs of Jamaica in relation to economic development. However, Ms. Brown tells JIS News that for the SLB to effectively meet the demand for loans, it is critical that borrowers repay their loans.

The SLB disburses funds from a revolving loan scheme, therefore its ability to sustain the fund is heavily dependent on the repayment of loans.

Several steps have been taken by the SLB to make loans more accessible, while encouraging loan repayment. The Pay As You Study (PAYS) is one step in that direction. PAYS targets undergraduate students and can be accessed by a parent or whoever is able to pay monthly by salary deductions, while the student is pursing studies.

Repayment on this loan attracts six per cent interest on the reducing balance. Persons may borrow up to $1 million with seven years to repay. Unlike the traditional loan type, application to access the PAYS loan can be submitted at any time.

There is also the income contingent approach to repayment of loans, which is to be formalised and fully implemented by the SLB. Under this loan repayment arrangement, the amount repaid by the borrower monthly will depend on his or her income. This approach to loan repayment will also be enhanced by loan tenure which has been extended from 10 to 15 or 20 years depending on the area of studies.

Ms. Brown says this makes it easier for persons to repay and more persons will be willing to repay their loans. “Our aim is to make repayment more manageable,” she says. Borrowers are advised to inform the SLB of their employment status when they have completed their course of studies.

The Executive Director laments that in most instances, they are not aware of the loan beneficiaries’ status, whether they are unemployed or is unable make the full monthly payment based on the loan agreement.

“If you are not in a position to make that full payment, come in and speak to us so we can put a structure in place based on your ability to pay. The system will now reflect that although you are paying less, you have expressed an intent to honour your obligation. When the SLB knows what is happening, we are now in a position to exercise some discretion. Our contingent approach to payment will be used to solve issues like these,” she says.

Policy Analyst at the Jamaica Tertiary Education Commission (J-TEC), Tracey-Ann Smith, who supports the SLB efforts, said that income contingent loan repayment is a popular mechanism used in many countries across the world. However, in order for income contingency regime to be effective, a sophisticated administration system is critical.

Mrs. Smith says that while the cost of tertiary education can seem overwhelming, achieving education at that level has a plethora of benefits. A highly educated society engenders better citizenry, greater health outcomes, increased productivity and a more robust democracy. The SLB is now accepting loan applications for the 2018-2019 academic year. The deadline for applications is Thursday, May 3, 2018.