The Government programme which provides loans to eligible Barbadians pursuing further studies is owed nearly $25 million by students who have not been meeting their commitments, according to the latest Auditor General’s Report.
Auditor General Leigh Trotman said in his report, which examined the period April 2009 to March 2017, that the Students Revolving Loan Fund (SRLF) has $24.9 million in arrears from 1,546 outstanding loans as at March 31, 2017, with one student owing as much as $86,000.
The report suggested that slackness contributed to the ballooning arrears, with the Fund failing in a large number of cases to send out reminders, and when it did, it was quite tardy.
According to the Auditor General, only 56 per cent of reminder letters were sent out on time and there was “less compliance with regard to the issuance of letters at the six month and three month intervals”.
Of the 48 beneficiaries who should have received reminders at the six-month stage, only 27 were notified, of which fewer than ten per cent were issued on time, he found.
“The failure to carry out this process reduced the potential impact of the fund in encouraging beneficiaries to repay their loans,” the report said.
The auditor general also found no evidence that action was taken to place those owing in excess of $5,000 in arrears before the court of in the hands of debt collectors, adding that on the 16 occasions that this was done three of the beneficiaries paid the same month, four paid the following month and one paid two months after contact was made.
However, after the audit, the process was refined with all letters being issued in advance, while reminder text messages and emails were being sent out during the month that payment was due.
According to the report, there were 67 loans in civil proceedings as at March 2015, and by March 31, 2016, 153 loans, including those in civil proceedings, were handed over to external attorneys. However, the number had fallen to 93 as at March 31, 2017.
However, the SRLF said it had implemented procedures to ensure early intervention and systems had been put in place to make sure officers were being compliant.
“The SRLF is aware of the increased risk and has segregated this portfolio of loans for special attention. In addition, new measures including the use of bailiff services have been introduced to assist in its collection effort,” it said.
The Fund’s resources was placed under pressure the year the then Democratic Labour Party administration imposed tuition fees Barbadians pursuing studies at the University of the West Indies.
The report states that the number of loans approved skyrocketed by 236 per cent to 1,169 between April 2014 and March 2015, up from 347 the previous year. Altogether the Fund approved $24, 904,395, double the $12,477,886 for 2013/2014.
“This increase resulted from a major expansion in the amount of loans approved for students attending the University of the West Indies during the same period April 2014 to March 2015, when students were required to pay tuition fees for programmes pursued at the university,” Trotman said in his report.
However, with the introduction of the fees contributing to a drop in enrolment at the university, the number and value of loans approved fell steadily during the two-year period from April 2015 to March 2017.
Then, the Fund approved 976 loans – down 17 per cent – totalling $23,681,284, a five per cent decrease.
The number of loans fell even further in 2016/2017, with the SRLF granting 544 loans valued at $12,572,951, a decrease of 44 per cent and 47 per cent respectively.