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What a relief!

Published:Friday | April 29, 2011 | 12:00 AM
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Minister of Finance Audley Shaw making his Budget presentation at Gordon House yesterday. - Ricardo Makyn/Staff Photographer
Hundreds of applicants for student loan camped outside the Students' Loan Bureau offices in New Kingston in this April 2005 file photo, as they attempted to meet the deadline to submit their forms. - File
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Reduced interest rates, insurance premiums, extended repayment period mark revised student-loan policy

Gary Spaulding, Senior Gleaner Writer

Tertiary-level students seeking to borrow from the Students' Loan Bureau (SLB) have got a well-needed reprieve.

Finance Minister Audley Shaw yesterday announced that interest rates on loans from the bureau will be slashed by three per cent, from 12 to nine per cent.

He also announced the lengthening of the loan-repayment period from 10 years to 15 years.

The revision took effect April 1.

"We will be reviewing the interest rate again later this year," Shaw declared.

Shaw, opening the Budget Debate in Parliament, said a more comprehensive review of the loan policy of the SLB is being undertaken.

However, he said his team is awaiting the completion of an actuarial study being currently undertaken on the bureau.

He also announced a reduction in insurance premiums from $1.50 per $1,000 to $1 per $1,000.

The finance minister said this was significant as the insurance cost represents more than 40 per cent of the total monthly payment in some instances.

Describing the reduction as significant, as the premiums represent the bulk of the loan, Shaw said he predicted it would shave off thousands of dollars off the repayment amounts.

He said the interest on a $500,000 loan is currently $195,000 and told the House that the reduction has shaved off monthly payments on such a loan from more than $9,000 to just over $5,000.