Student loan debts block scholarships

This week, Minister of Education Jeffrey Lloyd said 'something is wrong' with the country’s educational system.

As of Tuesday, July 25, 2017

By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

SCORES of scholarship applicants will be turned away by the Ministry of Education in the coming weeks as the Minnis administration continues its push to cut government expenses amidst the country’s dire financial outlook.

Education Minister Jeffrey Lloyd disclosed this during a recent interview with The Tribune.

According to Mr Lloyd, officials had hoped to recover some of the $156m owed in delinquent student loans to aid its scholarship programmes until the government was in a better financial position to fund the initiatives.

Last month, the South Beach MP, during the 2017-2018 budget debate, warned those owing the Education Loan Authority (ELA) to pay up or face “grief”.

The loan programme was established in 2000 to assist persons pursuing tertiary education, either locally or abroad.

However, it was suspended in August 2009 due to its high delinquency rate. When contacted by The Tribune over the weekend for an update on the situation, the South Beach MP indicated his ministry has commenced the dissemination of written requests to the more that 4,600 former loan recipients, requesting some form of repayment.

Similar letters were issued during the Christie administration.

“Funds were limited for some time now, and instead of opting to correct the process, former administrations opted to simply pour money into a corrupted cycle,” Mr Lloyd told The Tribune.

He added: “As a result, the system remains contaminated with massive failures and defaults. Therefore, the decision was taken by the government to suspend until sanity and liquidity could be returned to the Education Loan Authority.”

Mr Lloyd continued: “We have $156m in principle that is outstanding and through attorneys and the realisation that there is a penalty, many persons have come forward and are coming forward. However, success to date has been limited.

“It pains me to say, the money isn’t there for new scholarship and loans. Now, while we are fully committed to the promises, loans and scholarships already issued, we are unable to, from this point issue anything new.

“In addition to the financial position of the country, we in education met a $5m shortage of educational scholarships that we are obligated to meet. This is a tough position to be in. A frustrating one, but we have to work until we have this all sorted.

“It will take time, but once we have sorted through this, we will be in a place to carry out much of what we promised to deliver in education.”

The issue of delinquent student loan payments has been ongoing for some time.

In March 2016, then Minister of Education Jerome Fitzgerald said the ELA was owed $155m in outstanding loan payments for its student loan scheme.

At the time, the Progressive Liberal Party Cabinet minister urged delinquent borrowers to arrange repayment methods or face court action.

Mr Fitzgerald also said in March 2016 that his ministry and ELA officials had established a student loan repayment Incentive programme to help secure the outstanding funds.

This involved the establishment of a 12-month period of “incentives and waivers” from March 1, 2016 to assist and encourage delinquent borrowers to repay their loans. This was to be an interest-free period, during which no interest will be applied to loans, Mr Fitzgerald said at the time.

In 2015, a new bill was passed in Parliament to create a Loan Support Unit to help the ELA recoup funds owed to the government.

On the 2017 campaign trail, the FNM promised in its manifesto to finance through scholarships, grants and tax incentives, the ability for all qualified students to access a tertiary education.

Additionally, Prime Minister Dr Hubert Minnis directly guaranteed free tertiary level education at the University of the Bahamas (UB) for all Bahamians who qualify.

He has also promised that any Family Island student who qualified for UB would be assisted with accommodations and provided with a monthly stipend to help with living costs.

When asked about these promises and the possibilities of the party adhering to them, Mr Lloyd admitted the FNM would not be able to carry out the promises in “the immediate term.”

He added: “We expect to help many students in the years to come, but not in the way the ministry is known to. Again, we are in a tough spot.”

He continued: “Those who are now the beneficiaries, we will continue to honour, but because of budget issues we will be unable to award the number that we have usually.

“We have 4,000 applications. The committee will have to be really discerning as they make their decisions. I am of the understanding the bulk of awarded scholarships will go to the (students at) University of the Bahamas and we will insist on grade point averages being maintained.”

The ELA was established in 2002 to raise funds for the Educational Loan Guarantee Scheme, which provided educational loans to Bahamian students who wanted to study at approved colleges and universities.

TalRussell 7 years, 4 months ago

Comrades! Oh sure the red cabinet will chase after student loans but not chase after the many elites (many connected red party) who still owe the government large sums monies for anything from Bank Bahamaland loans, BEC light bills, Nation Insurance unpaid workers contributions, unpaid customs, property duties, permits and fees, business fees, crown lands, etc, etc.

DDK 7 years, 4 months ago

Comrade! They need to go after EVERYTHING that is owed!

Sickened 7 years, 4 months ago

Tal is seriously doubt this new government will do the same crap previous governments did and only try to collect from people who support the 'other party'. If they act like PLP's then they will be removed like PLP's.

sheeprunner12 7 years, 4 months ago

HOW MUCH OF THE OUTSTANDING $156 MILLION HAS LLOYD COLLECTED SINCE MAY ......... OR IS HE ALREADY BACK-PEDALING ON HIS BRASH ANNOUNCEMENT ?????

sheeprunner12 7 years, 4 months ago

Every student loan had to have a form submitted with the names of the parents of the student and two or more witnesses and/or guarantors that the loan will be repaid ........ So, how hard is it to commence court proceedings and freezing of assets until payments are completed??? ..... This has to do more with WHO these loans were given to than HOW to get the loans re-paid.

DDK 7 years, 4 months ago

Should not be hard........... Bessie not be!

BahamasForBahamians 7 years, 4 months ago

Sheep we finally agree on something.

Bain 7 years, 4 months ago

The reality is the many students who got the loan returned home and were not able to find employment. Also, many got jobs that were only paying minimum wage and could not afford to repay the loan and is still financially struggling even today...not to mention those government employees who never got promotions or salary re-assessment upon completing their degreed.

Let's be real, the loan program was never properly structured. As a matter of fact I remember a student who was given a full scholarship to complete a degree in Agriculture Science. He returned home and could not find employment for 2 years. He ended up going back to the USA where is now employed with the FDA.

This will be just another one of those bad debts that the Government will have to write off. Why? many persons do not have any assets for the government to seize, Fox Hill Prison is overcrowded as is, so going to jail is not an option.

Maybe what the Government can do is get persons to do community service as a means of repaying the loan. For example, teach after school classes in the government schools, open some government offices on weekends, clean up all government parks and beaches, paint all government buildings etc. Just my 2 cents.

ohdrap4 7 years, 4 months ago

i know of two people who got grants and were supposed to work for govt upon return.

they reported to the public service commission and received letters that they could not be placed. repeated letters.

one of them went to work in the US, one has to make a living.

the other one is underemployed around here and having a hard time meeting family commitments.

jackbnimble 7 years, 4 months ago

I think they give you the option of working to pay it off or paying it off with monthly installments. I can't see a student not getting a job and then returning to the U.S. to work without paying a dime of the loan back.

The fact the you didn't get a job does not exempt you from paying back the loan if you got a job as a result of your education. It's foolhardy to say otherwise.

If the loan debt was $155M when Fitzgerald was the Minister and is now $156M obviously Fitzgerald or the Ministry went ahead and granted another $1M in additional scholarships but I still find it unfair to stop the program completely and rob the new applicants who genuinely need the help of getting a scholarship. They must find a way to collect the outstanding funds and tighten up on the application and payment process.

Well_mudda_take_sic 7 years, 4 months ago

Lloyd needs to understand that he was not elected to whine about problems we all know about, but rather to find solutions to them that are in the best interest of our country and its people. For starters, the list of delinquent student loans totaling (at least) $156 million should be carefully scrutinized by Lloyd and other senior officials within the Ministry of Education to identify those loans with guarantors who are known (in our relatively small community) to have the annual income and/or possess the assets necessary to arrange for all or a significant portion of the delinquent balance to be paid upon a proper calling of the guarantee. And if these guarantors of known financial means should refuse pay, then appropriate and effective legal action should swiftly follow to recover the outstanding loan balance plus any accrued interest due. Come on Lloyd, stop moaning and groaning, and get on with the people's business!

Honestman 7 years, 4 months ago

Well said!

baldbeardedbahamian 7 years, 4 months ago

The loans were given without garreteers, otherwise a good idea. Publish the names at least.

Well_mudda_take_sic 7 years, 4 months ago

Only students age 18 or older could sign a promissory note and a personal guarantee in respect of the repayment of their loan. For students under age 18 one or both parents (or another backer) would have been required to sign the instrument of indebtedness and personally guarantee repayment of the loan made for the benefit of the under aged (minor) student. Not even an agency of our government has the power to enter into an enforceable contract with a minor. There's no way Alfred Sears and Carl Bethel could have been overseeing mega millions of dollars of taxpayers' funds being dished out to foreign colleges and universities with no hope of repayment because of legally deficient or otherwise unenforceable loan documentation. If that did happen, then both Alfred Sears and Carl Bethel (who each served as Minister of Education under different governments during the more relevant times that the loans were made) should be held fully liable for having caused the effective theft of millions and millions of dollars of the people's (taxpayers) funds. Are you listening Mr. Lloyd?!

observer2 7 years, 4 months ago

What about the FNM promise of free education at UB?

PastorTroy 7 years, 4 months ago

How can they pay their loan when they have no jobs??? Or, is making minimum wage struggling to feed themselves and keeping a roof over their heads? You can't squeeze water out of a rock! Maybe if we begin to think outside the box, and legalize cannabis, use some of the tax money to offer FREE college/university education to our citizens, then maybe this won't be such a vexing situation. And if the Bahamas Chrismas Con artist those start to protest, Cancel ANY tax exemptions that they may receive and use that to pay down the student loan debt. Hey! MEDICAL DOCTOR PM Minnis, "It's The People's Time Right?". Tell The People The Truth!

sheeprunner12 7 years, 4 months ago

Stop talking SHIT ............ These people who got loans almost twenty years ago and many of them are very much well off and capable of settling their debts ............. Carl, Dezzie and Sears were responsible for the ELA until 2009 ......... They are all alive .......... They can answer for the $156 million debt

birdiestrachan 7 years, 4 months ago

roc with doc promised free university of the Bahamas education. What happened to that, they say a promise is comfort to fools.

realfreethinker 7 years, 4 months ago

How the hell you expect Doc to live up to his promise when your plp boys and girls leave the treasury broke

TalRussell 7 years, 4 months ago

Comrades! In your pockets is a portable communication, publishing and production device which means that the most ordinary of the ordinary Bahamalander - does carry's around with them a radio and TV Station. Use it to put truth to the politicians promises of transparency. Track down each MP, Senator and political appointee to demand to know - if they owe "It's the People's time's Public Treasury" any monies? If yes, expose them? We are all potential reporters. We are the "People's Media." This red government is not getting nothing done - except lockup PLP's and chase after the poor and the near poor for monies. Even the UBP under Sir Stafford, never chased down after the poor and the near poor.

birdiestrachan 7 years, 4 months ago

Most of these loans were given out by the FNM Government. The PLP Government tried to collect . Roc with doc would have known or should have known the situation with the loans. the "millions" or what ever they call themselves will be most affected by this. They voted for "The people's time"

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