COVID-19 helps push demand for student loansWednesday, August 04, 2021
BY ABBION ROBINSON
The Students' Loan Bureau (SLB) is reporting a 5.43 per cent increase in loans for the academic year 2020/2021 which, it says, is being driven by the effects of the novel coronavirus pandemic, among other factors.
The increase compares to the prior year (2019/2020) when applications declined by 5.4 per cent and the academic year 2017/18 when the number of applications saw only a 0.03 per cent uptick.
Meanwhile, the Government-funded body is bracing for a historic payout of $5 billion in grants and loans for academic year 2021/22. This compared to $4.6 billion disbursed for academic year 2019/2020 and $4.2 billion paid out in 2018/2019.
Approved applications for the year ended 2019/2020 numbered 13,452, while those approved the year before were 12,814.
Nickeisha Walsh, executive director of the SLB, told the Jamaica Observer that the pandemic prevented some students from participating in the overseas work and study programme from which they usually fund tuition.
Another factor is “the uncertainty with employment with parents and guardians”.
Walsh said it is noteworthy that several households which usually finance their tertiary study themselves opted to choose the SLB.
She noted, meanwhile, that there were some students who, not wanting to pursue their studies virtually, opted to sit out the year.
For the upcoming financial year 2020/2021, as at June 2020, applications submitted were 8,512 valued at $3.63B, the SLB head shared. However, total projected applications for the new year, 2021/2022, is 13,858 loans valued at $5.0 billion, she shared. Grant in aid payout is expected to be around $150 million.
Walsh cautioned that all data shared are unaudited and “may be subjected to changes or amendments”.
The SLB provided tuition funding to 33 approved tertiary institutions, locally and regionally. The lion's share of loans are paid to applicants from The University of the West Indies and the University of Technology, Jamaica.
Interest rate on loans falls into four bands ranging from six per cent to 9.5 per cent per annum. Special programmes that attract lower rates include: maritime studies, logistics, agricultural studies, engineering studies, sciences and information communication technologies.
Customers who meet certain criteria can also benefit from reduction in interest rates including a one per cent rate for the children of Government of Jamaica (GOJ) employees. The SLB is primarily funded from reflows from the loan repayment; injection from the GOJ via the education tax and loans from external lending agencies.
Loan delinquency has risen under COVID-19 conditions, presenting another challenge for the agency.
As at December 2020, the delinquency rate was 37 per cent of loans, this compared to 33 per cent delinquency at year end 2019. Moratoria have been offered to borrowers in certain categories.
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