The National Student Loan Programme

Permanent Secretary,

Ministry of Ediucation

The National Student Loan Programme is administered by the Student Loans Advisory Committee. The Ministry of Education functions as the secretariat for the National Student Loan Programme. Application forms along with information on established criteria for the programme are available at the Ministry of Education and when completed forms are submitted to the Ministry, initial screening of each application is conducted by the Secretary to the National Student Loan Advisory Committee (a member of staff in the MoE) in collaboration with the Permanent secretary, Ministry of Education, who is also a member of the Student Loans Advisory Committee.{{more}}

The Student Loans Advisory Committee administers student loans under two modalities:

The Regular Programme: Applications are received at the Ministry of Education (the secretariat). After ensuring that all applications lodged have been correctly completed and contain all relevant documentation, the applications which meet the established criteria, including the eligibility of the programme and eligibility of the educational institution of choice, are then countersigned by three officials: the Chair of the Student Loans Advisory Committee, the Permanent Secretary, Ministry of Education and the Secretary of the Committee. The applications are then forwarded to the financial institution of choice, indicated on the application form.

Financial institutions are not obliged to approve loan applications forwarded under the regular programme; rather, negotiations are undertaken between the applicant and the financial institution and the outcome determined via this process. Under the regular student loan programme, applicants are mandated to provide their own collateral to back loans and consequently, recommendations forwarded to the financial institutions may be turned down due to insufficiency of collateral.

The Economically Disadvantaged Programme: As in the case of the regular programme, applications are received at the Ministry of Education (the secretariat). However, there are specific guidelines governing the eligibility of applicants who attempt to access loans under this programme. Similarly as under the regular scheme, applications received are reviewed for completeness by the Permanent Secretary Ministry of Education and the secretary of the Student Loans Advisory Committee. The applications are then forwarded to the Chair of the Student Loans Advisory Committee for a more in-depth screening in respect of additional established criteria which must be satisfied by applicants wishing to access funding under the economically disadvantaged programme. These criteria were established and approved by Cabinet in 2003 when the Student Loan Programme for the Economically Disadvantaged was initially set up.

Following the review by the Student Loans Advisory Committee, applications which do not meet criteria such as:

• Those established to deem an applicant as being economically disadvantaged;

• Satisfaction of criteria that area of study is an eligible programme of study (a list of eligible programmes is established by the Services Commissions Department each year);

• Satisfaction of criteria that institution offering the programme is an eligible institution (extra-regional study is not facilitated under the Economically Disadvantaged programme unless the area of study is on the eligible programs list and the programme is not available in the region, in that case the Committee has the right to recommend the applicant for approval. (After interviews, the programme may still not be recommended based on available financing).

Applicants whose applications pass this detailed screening by the Committee are then invited to interviews, which are usually held during the summer vacation period, as the deadline for submission of applications is usually around mid-July each year.

After interviews have been conducted by the Student Loans Advisory Committee, recommendations made by the Committee are then forwarded to the Ministry of Finance, for review and endorsement by the Minister of Finance as the awards made under this modality of the National Student Loan Programme are guaranteed by the Central Government. No collateral is required by applicants to secure these loans.

At the Ministry of Finance, another review is conducted of recommendations made by the Student Loans Advisory Committee. Applications endorsed by the Minister of Finance are returned to the Permanent Secretary, Ministry of Education for final dissemination to the financial institution indicated on the application form, provided that the institution participates in the economically disadvantaged programme (throughout the years of operation of the scheme different financial institutions (FIs) have participated in the economically disadvantaged programme).

FINANCING OF THE NATIONAL STUDENT LOAN PROGRAMME

Over the years there have been injections into the National Student: loan Programme from various sources, inter alia: local financial institutions, including banks and credit unions and loans from the National Insurances Services Limited and the Caribbean Development Bank.

The financing of the National Student Loan Programme for the Economically Disadvantaged is done through the National Student Loan Company Ltd, which is chaired by the Permanent Secretary, Ministry of Education.

Between 1998 and 2010, approximately 459 students were able to pursue tertiary level education under the regular student loan programme at an approximate cost of $34 million. Between 2003, when the Economically Disadvantaged programme came on stream, and 2009 approximately 510 students were able to pursue their dreams, which would otherwise not have been possible due to their economic circumstances at an approximate cost of $38 million.

Since 2010, an additional $16.1 million has been disbursed to approximately 402 students who have accessed the economically disadvantaged student loan programme, the total commitment being in excess of $20 million. The loans are processed through the Bank of St Vincent and the Grenadines.

The role of the Ministry of Education as secretariat to the programme is therefore critical in that careful scrutiny of applications must be done at all stages of the loan procedure in which applications are received, screened, reviewed and processed by the Student Loans Advisory Committee and in final dissemination of information on loans either approved/ declined to applicants and/ or financial institutions.

The Ministry of Education, through the National Student Loan Company Ltd also shares in the responsibility for monitoring the student loan portfolio and in particular, in following up on interest and principal payments, which are crucial for the continued operation of the programme.

Most persons are honest and diligent in repaying their student loans and some who are not employed within the six-month grace period after completion of studies will write or come in to the Ministry of Education to arrange alternate payment plans in collaboration with the financial institutions or to extend grace or repayment periods.

However, there are a few persons who, though employed within the six-month grace period after completion of studies, simply refuse to make payments on their loans.

There are isolated cases of students who receive loans under the Economically Disadvantaged programme who utilize the funds for personal activities and who then request additional funds to complete their programmes, which may/ may not be available under the programme in light of established maximum limits per programme ($120,000.00 for all subject areas except law and medicine for which the established maximum is $148,500.00). Clearly, these students who do not manage their funds properly put both their own goals and the reflows to the programme at risk.

There is also a small cohort of students who claim that though employed after completion of studies, they have insufficient remuneration to service their loans as well as to live comfortably, citing car and other loans which they have since acquired. Unfortunately, these are the same students who would have sat before the members of the Student Loans Advisory Committee in their interviews and promised fervently to complete their studies and committed to repayment of their loans to allow their successors the same opportunities afforded to them.

It is the responsibility of the National Student Loan Company Ltd (chaired by the P.S. Education), to follow up on these persons and by appropriate means available, such as taking legal action, garnishing of wages, moral suasion, etc, ensure that reflows are available to finance other students who are economically disadvantaged. The aforementioned measures may be resorted to after the telephone calls and letters to delinquent students written by the Company’s lawyer have failed to encourage such persons to come in to the Ministry of Education to simply inform the Ministry of their inability to pay at the current time, to extend grace periods or to set up alternate payment plans to service their student loan debts.

The Ministry of Education is obliged to inform all students under the National Student Loan Programme that default on interest and principal repayments will ultimately lead to significant arrears in their loan portfolio which will continue to grow over time. For those persons who work in the Public Service of St Vincent and the Grenadines, one must be cognizant that the National Student Loan Company Ltd is a state-owned company and pressure may well be put on pension and gratuity payments at the end of a civil service career by arrears on student loans taken out in one’s youth.

For those who have established thriving careers outside of St Vincent and the Grenadines and yet have defaulted on payments, they may well see or hear that their names have been published under an arrears list sometime in the future.

The National Student Loan Programme for the Economically Disadvantaged has afforded many students a university education, and many families have been elevated out of poverty through this initiative. It is indeed sad however, when one considers those who have passed through this programme and who now have successful careers, but still attempt to justify their non-payment of student loans after they would have benefited.

For those persons who are in process of accessing tertiary education under the National Student Loan Programme, the Ministry of Education encourages that you think carefully about the step which you are about to take and be honest and practical in your decision-making process and endeavour to honour your obligations by all means necessary, if you are successful in obtaining a student loan under the 2014 and beyond, National Student Loan Programme of St Vincent and the Grenadines.