It seems some people here in The Bahamas don’t understand what the word “loan” means.
The student loan system is in crisis. As reported last week, the government is struggling to get people to pay back the money they borrowed to pay for their education.
How many are paying it back? Only around one in ten of the loans are not in default. That’s right – not in default. A full 88 percent of the loan book is in default according to the latest figures.
Well, our hats off to those who have been paying back their loans and shame on all those who haven’t.
Failing to pay back that money hits the nation two-fold. First of all, that money has to be made up for somehow, so who has to pay for it if those who took out the loans don’t? That’s right, the rest of us. We’re all left on the hook for $100m.
But worse than that, who gets hit the most? The next generation of students.
That big pot of money got emptied really fast – and the deal is that those who borrowed it fill the pot back up so the next wave of students can borrow from it.
Because no one has been paying it back, the pot is empty. No new credit has been issued for nearly ten years because the money simply isn’t being paid back.
How is that fair to the students desperate for an education and not in any way responsible for the delinquency of those who went before them? And what kind of example are we setting them?
Student loans are commonplace the world over – simple measures such as salary deduction to repay them once salary reaches a certain level allows people to repay the debt when they are financially able, and at a sustainable rate. It’s not rocket science.
This isn’t a new problem, of course – as that ten-year figure well shows. This lack of responsibility for the debts we incur has gone on too long. Well, the gloves may finally be off.
Minister of Education Jeffrey Lloyd says the education authority may be about to hire a private collection agency.
He says the authority’s staff has been “overwhelmed” by the task – which raises questions of its own about how functional the authority has been. We can’t help but think that in the past there may have been a reluctance politically to pursue people for debts when you might soon be pursuing them for votes too.
A private collection agency will have no such qualms, and enough is enough.
The authority has tried to encourage people to pay off their debts, offering discounts of 40 percent on the amount owed. That was the carrot. It hasn’t proven enough. It’s time for the stick.
There is no such thing as getting something for nothing – and the price for treating the loan as a gift falls heaviest on those we say mean the most to us: our children, our future.
So if you have a debt with the authority, if you’ve been ignoring it for years – now’s the time to take advantage of any remaining discounts and incentives. Before you get a knock on the door and a summons to pay up.
And don’t forget, since the FNM came to power, The Tribune revealed the “do not disconnect” lists – imagine if a student debtor list was to be revealed and who might have risen to a high position without paying their debts!