SLB not in the business of embarrassment

We write in response to the letter to the editor published in The Gleaner on December 10, 2019, captioned ‘Stop embarrassing people, SLB’.

Please note that it is never the intention of the Students’ Loan Bureau (SLB) to embarrass anyone, but it is of critical importance that we collect what we lend so that the Revolving Fund can continue for the benefit of other students and to increase the bureau’s contribution to building our nation.

It is of note that the matter of student loans continues to pose a challenge not only for us in Jamaica, but also at the international level, given the attendant high risks.

The regular SLB loans are extended for 15-20 years and no payment is required while in school (although encouraged), and a further six-month grace period is allowed before repayment is scheduled to commence. Professional groups that require post-degree certification to be able to practise in their fields receive additional time to attain same before their loans become due for repayment.

We fully understand that there may be delays in some graduates getting employment within the period allowed and continue to invite those persons to enter into formal arrangements with the SLB to defer payments or reschedule their loans until they start earning and/or incomes increase. Where such arrangements are in place, we continue to work with our beneficiaries and debt-recovery action is put on hold.

In recent years, the SLB revised its policies to make the monthly payments more affordable for borrowers and encourage repayment.

Some of the policy changes include:

n Increasing the loan tenor to 15-20 years (from 10 years)

n Reducing interest rates to as low as six per cent (from 15 per cent) in some cases

n Interest calculation was changed from the ‘add on’ to ‘reducing balance’ method

More recent policy change allows a two percentage points discount to be applied to loans deemed to be in ‘good standing’. All these measures have served to significantly reduce the required monthly payment and make it more affordable. However, the rate of delinquency continues to be high.

As part of the collections process, the SLB normally sends out payment reminders via text messages, phone calls, emails, advisories/notification letters to borrowers and their guarantors. Some persons respond and service their loans; however, there are others who totally ignore all communication from the SLB and refuse to pay, placing the loan in a delinquent state. We must therefore pursue the latter persons to recover the loans.

MAKE ARRANGEMENTS

Where loans remain unpaid and become delinquent with no formal arrangements in place, such cases are referred to the legal department for escalated collection action and debt collectors/external attorneys are engaged to get the borrowers to repay their debt to the SLB.

It is only after all the above initiatives have failed to recover the debt that the SLB reverts to publication of the names and faces of chronically delinquent beneficiaries.

Note that beneficiaries are not published where it is known that they are unemployed. Publication is normally done at least annually and only approximately 100 delinquents are published each time, compared to the thousands of delinquent borrowers.

It should be further noted that publication works in encouraging persons to pay and we reap the benefit of the increased collections reported during the publication period.

The SLB invites persons who are experiencing difficulties in servicing their loans to come in and speak with us so that arrangements can be put in place to avoid being classified delinquent, which could lead to publication.

The board and management continue to review its policies and make adjustments as necessary, for the benefit of all stakeholders, including beneficiaries.

We invite persons who know the whereabouts of delinquent borrowers who continue to evade us, or those who may have some workable solutions to resolving the delinquency problem, to contact us at email: info@slbja.com.

Students’ Loan Bureau. Email feedback to info@slbja.com and columns@gleanerjm.com