The Student Revolving Loan Fund (SRLF) is set to become a deposit-taking financial institution that can compete with banks, credit unions, and others offering back-to-school loans.
This is among the changes expected under the Student Revolving Loan Fund Bill, 2025 passed in the House of Assembly on Tuesday.
Minister of Training and Tertiary Education Sandra Husbands, who introduced the Bill, outlined several institutional and governance changes coming to the 48-year-old body, which traditionally provided financing for overseas higher education.
According to the St James South Member of Parliament, there will be an enhanced corporate governance structure at the SRLF through expansion from a simple management committee to a board of directors advancing a stronger and more professional approach.
She added: “We also felt it necessary in Section 6, to enact provisions to address conflicts of interest to ensure that members who sit on the board are operating appropriately and ethically.”
Announcing another major change, the minister noted: “One of the biggest things that we sought to achieve with this piece of legislation is to make funds more available to the SRLF by allowing the SRLF to take deposits.
This was something that they could not do before . . . . Another element that will assist them in managing the financial affairs properly is to create the flexibility for them to be able to set the interest rates, so that we are not bound by what is in the marketplace . . . but can look at what makes the best sense to achieve the objectives for the fund to keep it profitable but at the same time keep the loans affordable.”
Husbands disclosed that the maximum age of sureties will be increased from 60 to 65 “because of the difficulty in getting sureties”.
Over nearly five decades, Fund has disbursed approximately $400 million in loans to Barbadian students, with the maximum individual loan limit increasing from $20 000 to $125 000.
“The Student Revolving Loan Fund has been sensitive enough and responsive enough to be able to put in place the opportunity for people to be able to use these alternative ways of studying so that they can succeed,” she advanced, adding that the SRLF has “moved away from just some of the traditional areas of study. We now are able to include things like culture and the creative sector.”
To facilitate this, she told parliamentary colleagues the SRLF had increased its loan limit to $125 000 to “accommodate the fact that the cost of education was rising. . . and the fact that the courses that people wanted to pursue were getting wider”.
While acknowledging the enormous contribution of the SRLF over its history, Husbands said reform and enhancement of the services it offers was necessary to the institution’s continued success.
“The legislation that is before the House is there to enable them to respond with more programmes, greater accountability, strengthening their system, so that they can respond to our people,” she said.
“The [SRLF] also responded to the need for higher loan limits and greater flexibility to shift from just having two sureties to allow people if they had some kind of asset that could back the loan that they could use a mix.
Sometimes it was not always easy to find people who would stand as sureties for the loan. In terms of the collection efforts by the SRLF, they were able to put in place things that would help them to do so.
“One of the things that they were able to set up was the ability to be able to issue debt certificates so they could act quickly in order to be able to regain payments for the debts that were outstanding. And this has been an important change, helping them to be more efficient.”
She told the Lower House that despite the challenges faced by the institution, which was established in 1977, it reflected the priority that the island continued to place on expanded educational opportunities for working class citizens, while also ensuring the country meets its development needs.
(IMC1)
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