About 50,000 Tertiary Education Loans Scheme recipients are rejoicing after the Government wrote off the $650 million debt incurred by the program.
Yesterday the media was told 21,000 of the 53,725 recipients had absconded or terminated their studies.
Tertiary Scholarship and Loans Service (TSLS) chief executive officer Hasmukh Lal said this meant about $190m would had remained unpaid.
In writing off the debt Government has decide to amend (TSLS) Act, which would then include the conversion of loan agreement to a bond arrangement for students studying under various schemes of TELS, excluding the in-service scheme.
This falls in line with Government’s plan to address the labour migration issues as students with outstanding payment will now be required to sign a bond and serve the country.
According to this new arrangement, students would be bonded to serve the country and their term of service determined by their years of study, multiplied by 1.5.
“The first point I want to make is on average we were collecting very, very small percentage of that (debt) every year,” Minister of Finance Professor Biman Prasad said.
“In fact, the debt was not being paid. Then, we found out that almost $100 million of debt owed to us would have been owed to us by students who do not have the ability to pay or who did not complete the course, who just took loans, allowances, but never completed the courses.”
He criticised the management of the scheme. Prof Prasad also maintained that although students would now serve the country instead of paying back the amount, if students failed to work in the country as per their required term, they would have to pay back the money they owed.
The new scholarships, Prof Prasad highlighted, would be based on merit, skills, capacity in universities, and on different criteria, which he said was the best way forward for all families, students and manpower planning in the country.
He said writing off the TELS debt lifted a burden from not only students, but that of parents, especially those who had signed as guarantors.
“We now allow ourselves to create a new direction, a new strategy and a new way of providing scholarships, but ensuring that we use that to produce the appropriate skills, direct students and make sure these students serve our country in whatever capacity they can.
“I think this is a game changer.”
He stated the previous system was one where “the gate was open”.
This meant that people, regardless of their marks or interests, could pursue any field, whether there were jobs available in that field or not.
“The universities started lowering their marks for entry, so you had people going into areas which they couldn’t complete or find a job.”
