SLB to adjust loan policy in new year
Published:Wednesday | December 28, 2011 | 12:00 AM
Marcella Scarlett, Business Reporter
Starting January, the Students' Loan Bureau (SLB) will reduce insurance premium on its loans and lengthen the repayment period by five years, well placed sources said.
The new repayment period will apply to new as well as existing loans.
Gary Robinson, management accountant at the SLB, confirmed that changes are "in the pipeline" but said he would not disclose details ahead of a formal announcement scheduled for the new year.
"There are a number of adjustments in the pipeline. It is something we are working on. It is something on the table. We would not want to put it out there yet before everything is finalised as there is more work to be done," said Robinson.
"There will be a public announcement about it soon," he said.
Currently, loans issued by the SLB are repayable in 10 years, inclusive of the period of study.
Wednesday Business sources say the proposal is to lengthen the period to 15 years, plus an additional five for students studying law and medicine, which are among the most expensive courses on offer at the University of the West Indies.
Liability protection
Repayment insurance, which protects the borrower and the guarantor from liability in the event of mental or physical incapacitation or death of the borrower, is usually paid at the commencement of the repayment period, straddled over six months.
The insurance charge will be reduced from J$1 for every J$1,000 borrowed to 60 cents per J$1,000 borrowed, a 40 per cent reduction. Additionally, payment of this fee will be distributed over the entire life of the loan rather than over the first six months.
The adjustments to loan policy follow a recent reduction in rates from 12 per cent add-on to nine per cent add-on.
Asked what impact the new changes would have, Professor Errol Morrison, the president of University of Technology, was not optimistic.
"It can be a good thing, but let us see," said Morrison.
The SLB, he said, is always working on improvements to benefit the student but "for some reason we are yet to see them" realised.
He recalled that two years ago students studying special courses such as nursing, agriculture and pharmacy were promised a reduction in interest rates down to four per cent by the Ministry of Finance and the Students' Loan Bureau, but, "to date, we are yet to see it," Prof Morrison said.