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Finance Minister Dr. Nigel Clarke
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Dr. Nigel Clarke
By Nakinskie Robinson
Effective April 1, students seeking funding from the Student's Loan Bureau will no longer require guarantors to support their applications.
Finance Minister Dr. Nigel Clarke made the announcement as he opened the 2024/25 Budget Debate in the House of Representatives on Tuesday afternoon.
"Come April 1st, there'll be no guarantors required for student loan. Madam Speaker, the requirement of a guarantor for student loans is regressive,
as it discriminates against low income families who cannot as easily, if at all, find guarantors," he reasoned.
Dr. Clarke said, even with a high delinquency rate, data suggests that "very rarely are payments actually made by a guarantor".
He hinted that the pending implementation of the National Identification System will be used to fill the gap.
"We anticipate about the time the first batch of students graduate who have benefitted from this policy, the National Identification System or NIDS will be a reality. We will not need guarantors to find people anymore," he said.
The government had signalled the policy change after removing the requirement for Wards of the State in 2022 and for applicants living in PATH households, last March.
In an effort to allay public concern about the impact of such a move, Dr. Clarke said it was widely assessed.
"Since inception, the Student Loan Bureau uses a very tiny fraction of repayment to make provisions for loss of life of the borrower. And this fund was accurately assessed and found to have more than a billion dollars in excess of what it needs to have to ensure the risk that it has.
"With this new guarantor policy, we'll move this billion dollar excess from the life insurance reserve, which you don't need in that position, into a new guarantor reserve fund to back this new policy," he explained, touting the plan as sustainable.
Some 4,200 grants valued at $60,000 each will also be available to low income applicants of the Student Loan Bureau.
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