The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

NEARLY five hundred borrowers have paid off student loans from the Education Loan Authority through the government's student loan repayment incentive programme, which was established in February 2016.

However, MICAL MP Miriam Emmanuel, ELA chairwoman, said even though the incentive was given, many people who are capable of paying their loans are not meeting their obligations.

The student loan scheme has awarded over 4,000 loans to date, with 98 percent of that sum awarded to borrowers based in New Providence, Ms Emmanuel said in a recent communication in Parliament.

To date, some 3,938 loans worth $42.56 million have been awarded to borrowers in New Providence. Another 669 loans worth $7.41m have been awarded in Grand Bahama, she said, while 126 loans worth $1.39m have been awarded in the Family Islands.

"As of April 2018, the authority portion of the loan scheme's portfolio stood at approximately $84,860,978, which represents 2,182 loans with default, a rate of 90 percent, and a delinquency rate of 275 days that is equivalent to $79,120,750," Ms Emmanuel said.

"Also, as of the same date more than $48,762,496 or 992 loans which represents the accumulation of interest and principal originally were paid off by the government of the Bahamas to approve lenders in accordance with article 21(3) of the repealed Education Guarantee Fund Act 2001."

Ms Emmanuel also said 498 borrowers have paid off their loans through an incentive plan.

For those who are still delinquent, she said the ELA and the government by extension, will do "whatever is legally right" to secure the taxpayers' money.

The student 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.

Last year, Education Minister Jeffrey Lloyd said his ministry had commenced the dissemination of written requests to the more than 4,600 former loan recipients, requesting some form of repayment.

Similar letters were issued during the former Christie administration.

In early 2016, then Education Minister 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 said at the time that the ministry, along with ELA officials, had established a student loan repayment incentive programme to help secure the outstanding funds.

The programme 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. That was to be an interest-free period, during which no interest would be applied to loans, Mr Fitzgerald said.

Secondly, borrowers who wished to pay off their loans during that 12-month period had the option of settling their loans by repaying the principal only, and all interest and related charges would be "forgiven."

Other features of the programme included the application of the full loan payment (interest and principal) to the principal balance only during the 12-month period and subsequent matching of that amount by the ELA by way of "debt forgiveness," as well as the "forgiving" of 1.5 times the loan payment if persons restructure their loans during the 12-month period. In the latter instance, the loan payment on the restructured amount (principal and interest) also would be applied to the outstanding new principal balance.