SLB repayment can be cappedMonday, March 01, 2021
We must re-evaluate our approach to how the Students' Loan Bureau (SLB) does its formulae for repayments.
The SLB provides exceptional service to young people who would not have otherwise had access to tertiary education. But it still represents a burden to young professionals who have not been lucky enough to secure high-paying jobs.
For years I have seen university graduates choose between repaying the SLB amounts, paying their rent, and buying food. We should not force our young people into this kind of dilemma.
A workable solution is to have a ceiling on repayments at 8 per cent to 10 per cent of income. This will improve the repayment system as more low-income graduates will be inclined to pay with the amounts being more manageable. The SLB would end up with fewer graduates being delinquent and higher inflows.
A student who is earning $70,000 would be required to pay $7,000 at the higher end of the spectrum, allowing them to have enough to cover their remaining bills. Currently, in this country, at the extreme end, we have young people making under a $100,000 and above $20,000 monthly.
I was alarmed when a friend of mine told me that after he left university he was advised of a $21,000 repayment requirement, while only making approximately $55,000 at his first job.
As young professionals develop and grow into their respective careers the natural result is they will earn more income. With more income, the dollar amount that the SLB will receive with that 10 per cent ceiling will also increase.
This policy represents a more equitable approach to repayment that will benefit graduates from the most vulnerable backgrounds, who often also help to carry the financial burdens of their families.
This, of course, is an oversimplification of what must be done to make repayments more manageable, but something needs to be done to reduce the struggle.
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