Full-time employees of the government are among the people who have not been repaying the loans they have obtained from the National Student Loans Company.
“Recent analysis indicates that far too many of the delinquent borrowers are gainfully employed persons — many within the civil service — who have simply decided not to repay their loans,” Minister of Finance Camillo Gonsalves said in his Budget Address.
“We will employ various measures this year to remind those delinquent borrowers that student loan repayment is not optional.”
Gonsalves said the company has a loan portfolio of EC$32 million and 744 active accounts.
There are 187 current students taking advantage of this programme, and accessing $5.4 million worth of loans.
He noted that in its 2020 manifesto, the ruling Unity Labour Party committed to “bolster further” the Economically-Disadvantaged Student Loan Programme through a number of measures, including a pledge to “reduce the interest rate on all existing and new loans going forward to 5%”.
The minister said the impact of the La Soufriere eruptions of April 2021 and the post-COVID spike in interest rates “conspired to delay that pledge, but the time has come for its fulfilment”.
He announced that the government has decided to reduce the interest rate from 6 to 4.5%.
“This will undoubtedly be welcome news to the students and families currently taking advantage of this programme, as well as those who have been faithfully repaying their loans,” he said.
“On the other hand, we also agreed with the National Student Loans Company that more can and should be done to address the unacceptably high rate of delinquencies within the programme,” Gonsalves said.
During the campaign for the 2020 general elections, the opposition New Democratic Party promised to reduce the interest rate to 4.5%.
Even after winning the elections, Prime Minister Ralph Gonsalves dismissed the proposal as political opportunism on the part of the opposition although his party’s manifesto contained a similar proposal.