Tertiary students could face 100% increase in tuitions SLB says economic climate might force Gov't to reduce subvention

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TERTIARY students seeking loans to finance their education in the 2012 academic year are staring at a 100 per cent increase in tuition costs, as it is projected that the existing economic conditions will force the Government to reduce its 80 per cent contribution to 60 per cent.

As a result tertiary students who now pay 20 per cent of the economic cost of their education could see their contribution climb to 40 per cent, or a 100 per cent increase.

Already facing a 12-15 per cent increase in costs for the upcoming academic year, officials from the SLB, attending yesterday's sitting of the Public Administration and Appropriations Committee (PAAC) of Parliament, said that the existing economic situation has adversely affected loans demands.

Executive director of the SLB, Lenice Barnett said she envisioned a doubling of students contribution costs by the academic year 2011/2012 and according to her, the current tuition fee of $240,000 could become $480,000 in less than a year.

Barnett agreed with committee member Ronald Thwaites that everyone should begin to plan for this reality in the short term. Thwaites also asked if the SLB was prepared for the increasing demand.

"Frankly, Mr Thwaites, although we are prepared to, there is a substantial capital injection, which we will require. And I made mention just now of our negotiations with Petro Caribe Funds and the approved loan from the CDB. We also rely quite significantly on the repayment of loans as well," she said.

Barnett said discussions were well advanced for Petro Caribe Funds to meet shortfalls likely to be experienced this year, as it was a loan from the CDB -- US$20 over five years -- that had provided the shortfall experienced in the last academic year.

Thwaites, while not discounting education at the tertiary levels, said children at the pre-primary and primary level must be given better grounding in education, in order to better plan for tertiary education.

Committee member Morais Guy, realising the implications of the disclosure, asked if it was his understanding that the demands as well as the fees were projected to increase.

"Both Dr, Guy, the tuition fees as well as the number of students requiring loans are likely to double," Barnett reiterated.

She explained some of the factors that could contribute to the expected all round increase.

"There are two factors that have affected the increase. The number of students that find it difficult to pay the fees at the current level, and the increase in each fee at the various institutions," she said.

Barnett said there were 72,000 loans, valued at $7 billion, on the books of the bureau. Some 8,500 loans were granted in 2009/2010 at a cost of $1.4 billion, while granting aids given to date total $458 million.

"The average monthly loan repayment sum is approximately $72 million and the current delinquency rate is at 18.2 per cent making about $1.1 billion in arrears. $658 million of that is being searched for by third-party collectors, including bailiffs, lawyers and others," she said.

The SLB currently provide loans for students attending 44 tertiary institutions, five of which are private institutions. The lions share of loans go to University of Technology (UTech) and the University of the West Indies.

There are currently 35,000 loans in repayment, "spread among 15,000 taxpayer registrations numbers", Barnett said.

Barnett also said there were 3,400 loans in arrears, ranging from 30 days to well over three years and that no contact had been made with the borrowers since some have graduated.

The minimum number of loans to be granted this year is expected to be about 10,000, from the 11,700 applications the SLB has already received. Barnett believes that $2.2 billion will be needed to meet the demand.

"All our expenses to date are below budget, including the collection (which is about $6 million below budget per month), obviously affected by recession and the socio-economic climate in which we are," she said.

Government-funded granting aid last year stood at $125 million and the projection for this year is $150 million.