By RICARDO WELLS
Tribune Staff Reporter
SCORES of scholarship applicants will be turned away by the Ministry of Education in the coming weeks as the Minnis administration continues its push to cut government expenses amidst the country’s dire financial outlook.
Education Minister Jeffrey Lloyd disclosed this during a recent interview with The Tribune.
According to Mr Lloyd, officials had hoped to recover some of the $156m owed in delinquent student loans to aid its scholarship programmes until the government was in a better financial position to fund the initiatives.
Last month, the South Beach MP, during the 2017-2018 budget debate, warned those owing the Education Loan Authority (ELA) to pay up or face “grief”.
The loan programme was established in 2000 to assist persons pursuing tertiary education, either locally or abroad.
However, it was suspended in August 2009 due to its high delinquency rate. When contacted by The Tribune over the weekend for an update on the situation, the South Beach MP indicated his ministry has commenced the dissemination of written requests to the more that 4,600 former loan recipients, requesting some form of repayment.
Similar letters were issued during the Christie administration.
“Funds were limited for some time now, and instead of opting to correct the process, former administrations opted to simply pour money into a corrupted cycle,” Mr Lloyd told The Tribune.
He added: “As a result, the system remains contaminated with massive failures and defaults. Therefore, the decision was taken by the government to suspend until sanity and liquidity could be returned to the Education Loan Authority.”
Mr Lloyd continued: “We have $156m in principle that is outstanding and through attorneys and the realisation that there is a penalty, many persons have come forward and are coming forward. However, success to date has been limited.
“It pains me to say, the money isn’t there for new scholarship and loans. Now, while we are fully committed to the promises, loans and scholarships already issued, we are unable to, from this point issue anything new.
“In addition to the financial position of the country, we in education met a $5m shortage of educational scholarships that we are obligated to meet. This is a tough position to be in. A frustrating one, but we have to work until we have this all sorted.
“It will take time, but once we have sorted through this, we will be in a place to carry out much of what we promised to deliver in education.”
The issue of delinquent student loan payments has been ongoing for some time.
In March 2016, then Minister of Education Jerome Fitzgerald said the ELA was owed $155m in outstanding loan payments for its student loan scheme.
At the time, the Progressive Liberal Party Cabinet minister urged delinquent borrowers to arrange repayment methods or face court action.
Mr Fitzgerald also said in March 2016 that his ministry and ELA officials had established a student loan repayment Incentive programme to help secure the outstanding funds.
This involved the establishment of a 12-month period of “incentives and waivers” from March 1, 2016 to assist and encourage delinquent borrowers to repay their loans. This was to be an interest-free period, during which no interest will be applied to loans, Mr Fitzgerald said at the time.
In 2015, a new bill was passed in Parliament to create a Loan Support Unit to help the ELA recoup funds owed to the government.
On the 2017 campaign trail, the FNM promised in its manifesto to finance through scholarships, grants and tax incentives, the ability for all qualified students to access a tertiary education.
Additionally, Prime Minister Dr Hubert Minnis directly guaranteed free tertiary level education at the University of the Bahamas (UB) for all Bahamians who qualify.
He has also promised that any Family Island student who qualified for UB would be assisted with accommodations and provided with a monthly stipend to help with living costs.
When asked about these promises and the possibilities of the party adhering to them, Mr Lloyd admitted the FNM would not be able to carry out the promises in “the immediate term.”
He added: “We expect to help many students in the years to come, but not in the way the ministry is known to. Again, we are in a tough spot.”
He continued: “Those who are now the beneficiaries, we will continue to honour, but because of budget issues we will be unable to award the number that we have usually.
“We have 4,000 applications. The committee will have to be really discerning as they make their decisions. I am of the understanding the bulk of awarded scholarships will go to the (students at) University of the Bahamas and we will insist on grade point averages being maintained.”
The ELA was established in 2002 to raise funds for the Educational Loan Guarantee Scheme, which provided educational loans to Bahamian students who wanted to study at approved colleges and universities.