Prime Minister Ralph Gonsalves, who, as Minister of Finance, signs as guarantor for recipients of loans under his government’s economically disadvantaged student loan programme, said he is concerned that one in every four recipients is not repaying the loan.
“I am concerned that within recent times, the non-performing student loan portfolio has risen to about 25 per cent,” he told a press conference in Kingstown on Monday.
“So we still have more people who are paying than who are not making their payments on time,” he however noted.
The prime minister’s comments came just over a week since the Student Loan Company, a state-owned agency, published in a local newspaper the names of a number of persons asking them to contact the company.
The notice did not say why the persons were being asked to contact the company, but it was quickly noted that all the names were of persons who had received loans under the programme.
Many persons speculated that the names were of persons who were not servicing their loans, and some persons supported the publication of the names, while others said it was unnecessary shaming of the recipients.
But it later emerged that some of the persons on the list were, in fact, servicing their loan, and, according to report, when they contacted the company, was told that the company merely wanted to update the recipient’s contact information.
Gonsalves told Monday’s press conference that “it must not be assumed that all the names which were published are names of students who are in arrears”.
He said the list also contains the names of persons who are not in arrears “but they have not been in touch with the Student Loan Company for several pieces of information which are required and they were written to and they haven’t responded.
“You borrow money, you must keep in touch with your lender,” Gonsalves said.
“I want also to make this point to all those who have borrowed money from the Student Loan Company or through the Student Loan Committee before that, through what is now the Bank of St. Vincent and the Grenadines, I want to say to you, if you are not making your payments on a timely basis or not at all, get in touch with the entity that actually loaned you the money, that is to say the bank or the credit union and get in touch with the Student Loan Company. Go and see Stuart Haynes at the NIS.”
Gonsalves said the people in the Student Loan Company “are not beasts”.
“They want to hold your hand. There are ways and means for you to work with them and restructure your loan.”
He reiterated his appeal for defaulters to contact the company.
“I want you who are listening to me, just go to the people who lend you the money and to the Student Loan Company. Forget about all the theories and all the expressions or this or that advice you’re getting on social media; you just do what is right and proper as I’m advising you.
“I repeat, the student loan Company is there to assist you with your obligation. You have an obligation, but don’t feel diffident about it. And clearly, those who have jobs and are in a position to pay, please pay, because if you do not, you are going to create difficulties for others, including, probably, your brother or your sister or your nephew or your niece.”
Gonsalves said that while he was not involved in the publication of the list, he would not have dissuaded the Student Loan Company from doing so.
He said that that, at the base of the programme, is that “the government trust the young people and trust them to do the right thing.”
At least 25% of those students cannot find employment after finishing their education. In particular medical students who were trained in SVG and/or Cuba, cannot get jobs in the US or the Caribbean.
Of course we must remember that Gonsalves said when embarking on this scheme that if the students could not repay the loans he would through the government.
The problem is now that a figure of $90 million has been taken as student loans from the bank and the bank are looking to repay the loans as they underwrote them. But the government do not have the money so they have taken to try and shame the students into paying. But you cannot get blood from a stone.
Perhaps this is the reason that the ULP government have been in such a hurry to buy back the bank shares, is there something to hide?