EDITORIAL: Focus on education loans timely

THE STUDENTS' Loan Bureau (SLB) has been the focus of attention this week, with Parliament approving a US$20-million loan guarantee to increase the pool of funds available for education loans. There was also strong indication that this money is not enough to satisfy the demand.

Additionally, Finance Minister Audley Shaw has called on the bureau to reduce its interest rates to students in keeping with his ongoing campaign to make borrowing cheaper for everyone in the society. He suggested single-digit rates for education loans.

This must be music to the ears of struggling students. The statistics indicate that more students are seeking loans to finance tertiary education via the SLB, with the number of applicants moving from 6,000 in 2008 to nearly 9,000 this year. This may be a result of the tough economic times, or an indication that a smarter and more ambitious generation of Jamaicans is emerging. But it is most likely a combination of both.

Although we have not seen any report on the approval rate, it is a fact that the SLB plays a critical role in society by providing poor students with the means of equipping themselves with higher education. The loan application and approval process should be simple and student-friendly.

Lamentably, the SLB has been plagued with delinquency over the years because thousands of students have defaulted on their loans after graduation. This has forced the agency to reassess its terms and conditions in order to ensure greater compliance. For example, the eligibility criteria for guarantors have become more stringent.

Interest rate change

The change in interest rate proposed by Mr Shaw is a start at overhauling the way the SLB does business. But we feel that if Jamaica is to achieve its development goals the SLB, in association with the Ministry of Education, must help to promote higher education in certain fields of study like engineering, science and technology, business, and research. Creative ways must be found to encourage interest in these areas. Once selected for any of the designated courses, these select students could be given longer repayment period, lower interest rates, and eventually debt forgiveness.

Moratorium period

And for those graduates who have trouble finding employment on graduation, maybe the SLB should consider a moratorium period until they are able to find work or start a business.

Within our institutions of higher learning lies the engine of economic development. It is the engagement of these thousands of students that will provide the impetus for new thought and problem solving. They are the ones who will provide the analytic skills to stimulate growth in industrial and economic activity.

It is a fact that the economic wheels of a country are activated by the additional human resources created on these campuses. The society cannot afford to deny our children that opportunity.

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