Daraine Luton, Staff Reporter

JAMAICAN STUDENTS owe the Students' Loan Bureau (SLB) $760 million, money that, if collected, could fund nearly half of the more than 9,610 persons who have so far applied for loans to pursue advanced studies this year.

The delinquents number 7,127 and are mainly graduates of the University of the West Indies (UWI), Mona campus, and the University of Technology (UTech).

Lenice Barnett, executive director of the SLB, told The Sunday Gleaner that the bad loans dated back to 1996. She said they had handicapped the bureau's ability to remain viable and to provide assistance to other students.

"If we don't collect to build the fund and get a substantial injection very soon, we are in trouble."

Prospective students

The SLB has projected to lend a minimum $1.7 billion this year to enable students to pursue higher education.

However, increasing tuition fees and a corresponding increase in applications to the bureau, combined with a high delinquency rate among students, are threatening to deny many prospective students the opportunity to finance their higher education through loans from the bureau.

Students who attended UWI Mona account for nearly 50 per cent of the delinquents, SLB data show.

Of the total arrears, UWI Mona students owe the SLB $361.2 million, far outstripping the total bad loans from the UTech's former students. UTech graduates owe the SLB $175.1 million.

Persons who borrowed money from the bureau to pursue studies in the areas of the social sciences, which include business studies, account for the greatest portion of SLB bad debt.

A combined 3,118 of the delinquents pursued studies in the social sciences, behavioural sciences, business and hospitality and tourism.

Last month, Prime Minister Bruce Golding told Parliament that the rate of delinquency on SLB loans was due mainly to students leaving universities and being unable to find employment.

"The Students' Loan Bureau is faced with a dilemma. They are financing studies for students, many of whom, having qualified, are unable to find employment and, therefore, are unable to pay back the money, and they become the subject of some persistent pressure from the Students' Loan Bureau to pay back," Golding said.

The UWI Mona said that a tracer study of 2,464 of its graduates who left the institution in 2007 found that 90 per cent had found jobs after graduation and 4.6 per cent had moved on to do postgraduate studies.

The institution also said that it found that its graduates earned a high of $380,000 per month and a low of $16,000 per month.

Meanwhile, an Albany Univer-sity study on research in higher education published in 1995 said that student-loan repayment could be predicted based on a number of factors.

"Loan repayment and default behaviour can be substantially predicted by the pre-college, college, and post-college characteristics of individual borrowers.

"Majoring in a scientific or technological discipline, earning good grades, persisting to degree completion, getting and staying married, and not having dependent children, are all actions that substantially increase the likelihood of repayment and lower the likelihood of default," the study said.

Barnett said the SLB is yet to develop a profile of persons who default on their loans. She said while areas such as the social sciences have a huge block of bad debtors, a major part of the problem with loan repayment has to do with the attitude of some persons.

Job-opportunity problem

"In areas where there are huge concentrations of students, there seems to be a job-opportunity problem. However, a lot of persons are not willing to work in areas that they consider to be inferior to their status," Bennett said.

Bennett also told The Sunday Gleaner that many debtors played hide and seek with the bureau.

"Many of the persons who owe the bureau are working and many of them can afford to pay," Barnett said.

Wayne Chen, president of the Jamaica Employers' Federation, said that there may be a strong correlation between the areas of tertiary study and the ability of students to repay student loans.

Address repayment ability

However, he believes the more fundamental issue of addressing salaries and repayment ability of tertiary graduates is the need to connect the realities of skills demands with training.

"They have to be realistic. They have to look at the world and understand how the world works. A tertiary institution is a very enclosed and cocooned place. It shelters you from the reality of life.

"The reality of life is that you may have a Phd and the mechanic who is fixing your car is earning more money than you. It is not that the world is wicked; it may be that the mechanic may be doing a more productive job than you are," Chen said.

daraine.luton@gleanerjm.com