PAYDAY PAYBACK: Student loan debt could force govt to target salaries

Jeffrey Lloyd, Minister of Education.

As of Thursday, June 13, 2019

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

THE Ministry of Education is seeking to garnish the wages of civil servants who have failed to repay the Education Loan Authority as it aims to recover over $83m in delinquent money.

While the overall sum owed to the ELA has been reduced from the $100m that was outstanding in January this year, Education Minister Jeffery Lloyd said yesterday this is still not enough to restart the programme.

When the Minnis administration took office in 2017, more than $150m in principal and interest had not been satisfied. In total, some 2,057 loans are delinquent and many of these include money granted to people in the public service.

“There is a default rate of over 90 percent and a delinquency rate of almost one year - 275 days,” the minister told the House of Assembly yesterday.

“Because of this very high default rate the programme was suspended in 2009, ten years ago and we want to restart this programme, but we can’t because many of those 2,057 who owe money won’t pay and we are going to go after them as we have and seek to prosecute them and require them to pay.

“I am sad to say, Mr Speaker, some of those who don’t pay are public servants, they work for the government. We are going to seek the ways to have their salaries garnished.”

He continued: “When we came to office in 2017 and I credit the great work of the former chairman and present chair in bringing this where it is today, over $150m was owed to the Scholarship Loan Division, today it is $83m.

“And the thing about it is we have had in place now for a couple of years a very generous incentive programme. If you come in I think we knock off almost 40 percent, no interest. So if you owe $10 you only have to pay $6 and they still wouldn’t come.

“So we are working to remedy this. We want to restart this programme. There are many who come to us for loans and we are going to do what we have to do in order to make this a success.”

In January Mr Lloyd told this newspaper that the delinquency recovery rate needed to increase seven-fold as Bahamian taxpayers were “on the hook for $100m”.

At the time, he said, officials were about to hire a private collection agency “with the teeth” to pursue deadbeat borrowers after its staff found themselves “overwhelmed” by the sheer magnitude of the task.

With legal action the ultimate recourse, Mr Lloyd said the delinquency recovery rate needed to increase from the present $60,000-80,000 per month to $400,000-$500,000, or from $1m per year to $6-$7m, if the ELA is to “put a serious dent” in what it is owed.

Warning that his and the authority’s “patience has simply run out”, the minister criticised the “stubborn and recalcitrant” defaulters who refused to enter even settlement discussions, adding that they faced having their credit standing “permanently tarnished” when The Bahamas’ first-ever Credit Bureau goes live within the next few years.

HonestTruth 4 years, 10 months ago

Great news! I support this initiative 300%

It is ridiculous mindset amongst our people that we can take money and not pay it back, that foolishness needs to stop.

Dawes 4 years, 10 months ago

Just tell everyone that if they have not come to an agreement to pay the loan off going forward starting September 1st and then on the first of each month, you will publish a list of those who owe and what. You will find that the shame will cause a large number to come in to pay. Although of note if not already done, there should be a policy that the loan is not repayable until the person is earning over a set figure (say double minimum wage or triple etc).

DDK 4 years, 10 months ago

Suppose said persons never earn double/triple the minimum wage, or perhaps not even bother to work? What then?

Dawes 4 years, 10 months ago

Then it is a freebie. The idea of student loans should be to enable a person to get a better paying job after they have gone to college. If it has failed then there is no point going after it. The hope being the vast majority do earn more and pay back.

DDK 4 years, 10 months ago

Now we're talking sense! Non repayment of legitimate debt is tantamount to theft.

B_I_D___ 4 years, 10 months ago

Do it!!

TalRussell 4 years, 10 months ago

What's to follow next by the 1950's mentality stubborn comrade minister - debtors imprisonment order be executed by education ministry?
The Colony of Out Islands education ministry is the only subsidiary crown to have mobilised its go after students collection network be operating 24;Hours around clock.... while the property owners behind walls most secluded away from ordinary populace were given a tax collection pass, yes, no...... Please we beloved Queen, you has look into such "recalcitrant” matters, yes no..............
I guess be difficult be advocating imprisonment of school officials who whilst on "PopulacesPublicPurse's"s" are but carrying out ministry education's very own "state sanctioned policy" which outright encourages the beating of school children's, yes, no.................

sheeprunner12 4 years, 10 months ago

Did Pindling, Wallace-Whitfield and Hanna not send Bahamians away for higher training with the end goal to bond those students to Government for improving the system? ........ Those students are still running the public sector today.

Now that Ingraham and the FNM came up with this "free-be" scheme to win the 2002 backfired on the Treasury, this 2019 reincarnation of the FNM want to garnish wages????? ........ SMH

Each ELA student loan is signed off by a guarantor(s) ........ Find them and garnish their wages. The guarantor list may just be a bit embarrassing to the FNM politicians (their friends, family, & lovers).

Well_mudda_take_sic 4 years, 10 months ago

Nothing but grand standing by Lloyd for the consumption of those who do not know that the action he's promising cannot be limited by discrimination to civil servants. Furthermore, the wages of most civil servants have already been garnished by the banks with large consumer loan portfolios like Commonwealth Bank and Fidelity Bank. And many civil servants have monthly consumer loan repayments (principal plus interest) as high as 70% or more of their gross monthly wages. There's literally nothing left of their monthly wages for the ministry of education to garnish, and Lloyd knows this to be full well the case. Also, does anyone with an ounce of sense think for one moment that the Symonette family will let the Education Loan Authority compete with Commonwealth Bank for the garnishing of the meagre wages of civil servants? There's a greater chance of the sun not setting this evening!

“When we came to office in 2017 and I credit the great work of the former chairman and present chair in bringing this where it is today, over $150m was owed to the Scholarship Loan Division, today it is $83m.

What LLoyd very deliberately refrains from disclosing is how much of the decline from $150 million to $83 million is attributable to loans that were simply written-off for the benefit of both FNM and PLP connected muck-a-mucks. He's also misstating these amounts by not including the very significant accrued interest amounts due on the outstanding loans. Yep, Lloyd is a - - - - - - - - - - - - of the highest order. LMAO

sheeprunner12 4 years, 10 months ago

We will never know about the repayment claim ........... the ELA records are sealed tight ..... No civilian can see them ........ So, we have to "take the word" of Lloyd ........ SMH

Well_mudda_take_sic 4 years, 10 months ago

So much for all of that freedom of information talk that Minnis gave us before the outcome of the national general election in May 2017. There isn't an honest soul among the whole bunch of current cabinet ministers. Those who voted FNM in the last general election 'got swing' real bad. FNM, PLP, DNA....all the same....no real difference. Honest, intelligent and hardworking Bahamians with true statesman-like qualities steer well clear of the dirty cess pool of politicians and civil servants who are doing nothing but destoying the social and economic fabric of our society.

sheeprunner12 4 years, 10 months ago

Mudda, the present FNM will submit every Department or Ministry report that was left outstanding by the Christie Government .......... because they do not want Gravy Brave to use his PAC power against them ......... This is a game that they are playing ......... They will ride the stupid Major ruling until 2022.

DDK 4 years, 10 months ago

Actually, I believe you are talking more sense than the Minister, particularly with regard to already garnered wages.

TalRussell 4 years, 10 months ago

New consensus growing amongst number advanced thinkers comrades is for age '10' be first year enroll children's in academic learning, yes, no.... which calls complete closing down all Colony of Out Islands grade schools operated by government over next 24/36 months time-frame

sheeprunner12 4 years, 10 months ago

Too many schools in the Out Islands ......... they can close at least 50 % of them.

bogart 4 years, 10 months ago

DA ....People knows...the employees done have loan withdrawals/SALARY DEDUCTIONS - govt can check most all govt employees.... from almost all their paychecks.....the unemployment rate is highest .....da gubbermint financial subsistance is over 10,000..pore people needin ......even limited clothes for school chillrens.....knows great difficulity to get persons to qualify for greatly discounted lot an home housing.....1 in 7 Bahamians dont know where next meal coming from...Poverty rate like some 15%....MINIMUM WAGEstill years now unchanged....before ....REGRESSIVE TAX.....affecting pore people worser...VAT...... REPORT: BAHAMAS has second-highest economic and social inequality in Caribbean from Latin American Economic Outlook 2019 Report....article in Nassau Guardian 22 March, 2019...BEY EVEN DA ODDER DA Y.....ACTING FINANCIAL BIG WIG.....say one tingfor rich peoples........an...an...an......DID ONE U-TURN ON trying ...... trying to have rich people whip out money.....Now true to form it gan be getting blood out of stone...pore people poorer dan poor.......tyin to gets dere pound of flesh outta people......(NOTE: NO INCOME TAX & NO CORPORATE TAXES for rich people).....an......an........an.....2 week before election pore people is king an queen fer dere votes....an after ....different...new govt elected same ting dropp on backs of pore people.....

DDK 4 years, 10 months ago

That too, AND maybe if they closed the 24/7 numbers houses there would be more funds maintained to pay bills.

bogart 4 years, 10 months ago

YOUR comment may be the key to .....doable changes in betterment of the lives of pore and increasing numbers patrons including bankers, white collar workers who seem to go to the far away outlets so they cannot be seen and on increasingly frequency. The revenues I believe some 600M pa and profits some 200M and extracting bulk revenues from poorest areas. Seems what is sacrificed to channel to pore gets redirected to web shop gambling. owned by 8 operators/owners

TheMadHatter 4 years, 10 months ago

What's amazing is how much noise the Christian Council made prior to legalization, and how silent they've been afterward. 180 degree turn? I dont know.

TalRussell 4 years, 10 months ago

Your comrade once had an out-of-body experience (OBE) giving my own earthly soul a rare travel into future communication experience with different kinds souls of spirits, yes, no.................. witnessed, heard, exposed things which years later still baffles hell out me mind...............

Kalikgold 4 years, 10 months ago

Comrade Tal you never fail to disappoint, always talking non sense & off topic.

Anyway, this story seems to go away for a few months then reappears.

The system was designed so if the student is unable to pay of his/her debt, the guarantor would pay back the loan agreement.

Why does it seems as a surprise that they are going after the guarantors (most cases parents) when this is what suppose to be done.

TheMadHatter 4 years, 10 months ago

So they place US in debt to the IDB to the tune of $6billion and now they want to talk fool about just a few million? They need to stop smokin the Bin Laden weed and get the Lucayan Hotel open. I often wonder, do you have to fail kindergarten to be an MP?

joeblow 4 years, 10 months ago

Collect with interest!

TheMadHatter 4 years, 10 months ago

Really Joe? 150 million versus 6 billion? Why the focus and attention. This is just silly. Add it to the 6 billion total and wipe out those people's debts man. Sometimes i think Bahamians are our own worst enemies.

TalRussell 4 years, 10 months ago

Shouldn't surprise why Imperialists red shirts government's substantive cabinet comrades are clamping down garnisheeing wages 46% all employed by government even placing possible debtors imprisonment closer doorsteps forcing thousands individuals either under debt serviceable waters, or pretty damn close treading debtors water be's keeping they heads above water by remaining upright and pumping they legs likes be's swimming for their lives......yes, no.............

RickRock 4 years, 10 months ago

Forgive the debt. It's the most Godly and Righteous thing to do. On another note the Social Security Administration /Government has been robbing people for years. I along with countless other Americans never agreed for them to take out money from our weekly/Bi-weekly/monthly wages. For the sake of setting me up for when I get to be the minimum age (No American wage earners input went into determining the age it would be disbursed) to benefit. Thats not for anyone to do against any persons will. You work from the age of 22 until you retire in 25 years. You're 47. They've taken at minimum $100 a week for 25 years. Considering wage increases and promotions. That's at least $125,000.00 Sitting somewhere that truly belongs to that worker. Within that time Americans have families and end up with kids with student loan debt. That money that's owed could minimize personal debt, purchase homes, be invested. Also, at 47 it's not available to get the money you've worked for. That's a crime itself.

proudloudandfnm 4 years, 10 months ago

Considering the state of our economy the last 7 to 10 years I wonder how anyone can pay back their loans. The jobs out there don't pay. Target salaries? SO someone making 300 bucks a week will be deducted how much?

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