Dear Claudienne,

I am a graduate of the University of the West Indies (UWI). I took out a loan from the Students’ Loan Bureau (SLB) for the academic year commencing September 2009 through to May 2012. Because I did not complete the number of credits required within the specified period, I had to spend an additional year at the institution.

I asked the SLB to defer my loan payment period for a year and was told that in order for my loan payment to be deferred to the following year I would have had to apply for a loan extension. An extension of the loan would have meant not just the deferral of the payments to the following year, but also that the SLB would pay for the courses I would be doing during my additional year in order to satisfy the university’s credit requirements.

In an attempt not to increase the total amount of money I would owe the SLB, I opted not to apply for the loan extension but rather to begin the loan repayments. I therefore began to repay the loan in January 2013, and at the same time self-financed my tuition for the academic year September 2012 to May 2013. After the completion of my degree in May 2013, I was not able to gain employment until January 2014. So although initially I began to make the monthly payments to the SLB on the due date, I was unable to keep up with all the payments. This resulted in my account being in arrears of more than J$100,000.

I then received an e-mail from the SLB about my account, and this prompted me to visit their office. A representative of the SLB told me that the Bureau would give me a period of six months to clear the arrears on my account and that I would be required to pay $40,000 monthly over the six- month period. I was told by the representative that the account would now be monitored and if I failed to pay the specified amount any month during that six-month period, my account would be transferred to the legal department. Although I told them I couldn’t pay $40,000 per month, the representative insisted that I pay that sum and exercised no flexibility.

I was unable to pay the $40,000 monthly as I was working part-time and my monthly salary was $40,000.

Instead I made monthly payments of $10,000 with the exception of the month of August when I made a payment of $5,000.

Recently my guarantor phoned me and said that she had received several calls from the SLB informing her that they would be repossessing her assets and taking her to court.

I then went back to the Bureau where a representative told me that my account had been transferred to a debt collector and that nothing could be done as the matter was now outside of the SLB’s control. As a result of the transferral of the account to the debt collector my arrears have now moved from a little over $100,000 to $200,000. The increase, I was told, was due to the fact that the debt collector was receiving a commission of either 20 or 25 per cent. So in addition to the late fee which I am charged monthly for having my account in arrears, I am also responsible for paying the debt collector.

Also, in an attempt to make a payment arrangement with the debt collector, he has informed me that I would be required to pay $89,000 monthly for the next three months. This amount far exceeds what I receive monthly. I think it is overtly unfair that even though I have been making payments on the account, due to the challenges I have been facing, my arrears have been increased by the SLB to cover the charges incurred by the debt collector. My loan tenure is not due to be completed until the year 2019. I am already struggling to pay my loan and the implementation of the debt collector has intensified the challenge.

I was given your e-mail address by a friend who once received assistance from you.

I would appreciate your assistance to resolve the current issue which I am facing.

SG

Dear SG,

Tell Claudienne communicated with the SLB and requested that they meet with you to try and resolve the matter. The SLB said that they could not disclose personal information about your account to a third party. However, you have informed us that the SLB invited you to a meeting. You said that they requested to see your last three pay slips and have also been in communication with your guarantor. You said that they have now restructured your loan. You said that the SLB has agreed to spread the arrears you owed over the duration of the loan tenure. The new arrangement means that your payments will be increased from some $13,000 monthly to $16,800 monthly, inclusive of the arrears you owed. We note that you and your guarantor have signed the forms the SLB sent you, agreeing to the restructuring of the loan.

The SLB sent Tell Claudienne the following e-mail:

“Reference is made to the captioned account and e-mail from SG dated September 24, 2015, which was forwarded to the SLB for our comments.

We have not been authorised to disclose personal information on SG’s account; however, we will respond to the general issues and concerns as they appear therein as well as our solutions regarding same:

1. Graduation Date Extension/ Deferral of

Loan Repayment

Please be advised that it is the policy of the Students’ Loan Bureau to grant graduation date extensions/ deferrals where beneficiaries are experiencing one or more of the following circumstances:

o Financial Difficulties

o Illnesses

o Circumstances beyond the control of the beneficiary where the date of completion is affected by changes made to the programme of study by the Institution.

“Kindly note the SLB does not fund students who have failed courses. Therefore the option could not be offered to a beneficiary as was the instant case where the extension requested is as a result of failing to meet the academic requirements.

2. Unemployment and Payment arrangements

“Loan Repayment is not dependent on the beneficiary being employed; therefore the Guarantors in circumstances of unemployment are required to service the loan during the period that the beneficiary is unable do so. Once a beneficiary has gained employment after a protracted period they have an obligation to ensure that they pay on a monthly basis. The explanation given by SG that she was “unable to keep up with all her payments”, after having not paid for over a year due to unemployment, cannot and should not be deemed justifiable. It has to be borne in mind that repayment inflows to the SLB directly go to tuition fees for other bright Jamaicans who would otherwise not be able to fund their tertiary education.

“Failure on the part of the beneficiary and Guarantors to put suitable arrangements in place despite advisories and notices, as was the case at hand, is deemed a breach of the contract, and results in recovery action being initiated. It is of importance to note that prior to recovery action being taken, a debtor is given several options to explore in an effort to rehabilitate the loan and avert action. Beneficiaries of student loans have an obligation to ensure that their student loans are given a priority on a monthly basis, which was not the case at hand.

3. Outsourcing to a Debt Collection Agency

“When an account has been outsourced to a Debt Collection Agency, the signatories to the contract are directed to the collector to work out a structured settlement arrangement. The cost associated with recovery action is borne as per contract by the loan beneficiary who failed in the case at hand to make consistent monthly payments whilst being employed. Debt collectors are required to outline to the parties a set timeline to settle the arrears, or close the account. A beneficiary, having breached the contract, cannot rely on the original terms of same, inclusive of the loan tenure, and therefore negotiation is critical at this juncture. If a Debtor is unable to meet the terms outlined to clear the arrears as SG is alleging, the option is available to negotiate with the Collector, or to seek redress within the SLB, possibly from the Manager of the Department to which the account is assigned. It is noted that SG opted not to explore any of these options, but sought instead to write to the media.

“Now that the account has been brought to the attention of the Manager of the Legal Department, contact has been made with the beneficiary and the Collection Agency to which the account is assigned, and an agreement has been reached for SG to restructure her account. A restructuring of the account will allow the beneficiary to make affordable monthly payments towards her loan, which will no longer be in arrears.

We trust the above-mentioned information has adequately addressed the concerns outlined.

Please feel free to contact us for any clarification that may be necessary.”

Good luck.

Have a problem with a store, utility, a company? Telephone 936-9436 or write to: Tell Claudienne c/o Sunday Finance, Jamaica Observer, 40-42 1/2 Beechwood Avenue, Kingston 5; or e-mail: edwardsc@jamaicaobserver.com. Please include a contact phone number.