Jamaica News: The Government will be providing $3 billion in grant support to the Students’ Loan Bureau (SLB) during the 2019/20 fiscal year, in keeping with the Administration’s focus on increasing access to tertiary education.
This was announced by Finance and Public Service Minister, Dr. the Hon. Nigel Clarke, during his opening presentation in the 2019/20 Budget Debate, which got underway in the House of Representatives, on March 7.
The announcement comes against the background of what he said was a 22 per cent increase in the value of SLB loans disbursed over the past three years. He noted that between 95 and 99 per cent of the applicants from 2015/16 to 2017/18 were successful.
Meanwhile, Dr. Clarke advised that a new SLB Board has been appointed with the mandate of ensuring that tertiary education financing “continues to be affordable and accessible,” and that the revolving loan fund “becomes sustainable.”
“The new Board is developing a strategy to achieve these objectives, including improving the SLB’s use of technology and its management of loan delinquencies,” he added.
The Minister also outlined several reforms which will be undertaken at the Bureau, “in keeping with the objective of expanding economic opportunity for all.”
Dr. Clarke said effective April 1, the application of payments will be the first option presented to borrowers with the most outstanding balances, instead of resorting to penalties at the outset and then interest before getting to the loan principal.
The Minister argued that the latter sequence is not consistent with the practice of financial institutions generally, “and has the effect of making SLB loans harder to service.”
“Economic opportunity for all means that payments by borrowers will be applied to [the] most outstanding payment first,” he added.
Additionally, Dr. Clarke said eligible borrowers in good standing with the SLB will be entitled to a two per cent reduction in their interest rates.
This, he indicated, will see postgraduate loans falling from 9.5 to 7.5 per cent, and Pay-As-You-Go loans reduced from six to four per cent.
The Minister advised that this is in keeping with the Bank of Jamaica’s policy rate reduction over time.
Meanwhile, all SLB borrowers employed full time to registered charities, which are in good standing, will benefit from a 10 per cent reduction on their loan balance, forgiven for each full year that they are attached to those entities.
Dr. Clarke said this policy will help students, charitable organisations, the vulnerable population served by these entities, “and helps Jamaica.”
“There are many charities doing outstanding work in Jamaica. We want to encourage them and to encourage talented graduates to work in the non-governmental organisation space, even for a few years, as we work together to build a better Jamaica,” he said.
Source: JIS News