PAYDAY PAYBACK: Student loan debt could force govt to target salaries


Deputy Chief Reporter

THE Ministry of Education is seeking to garnish the wages of civil servants who have failed to repay the Education Loan Authority as it aims to recover over $83m in delinquent money.

While the overall sum owed to the ELA has been reduced from the $100m that was outstanding in January this year, Education Minister Jeffery Lloyd said yesterday this is still not enough to restart the programme.

When the Minnis administration took office in 2017, more than $150m in principal and interest had not been satisfied. In total, some 2,057 loans are delinquent and many of these include money granted to people in the public service.

“There is a default rate of over 90 percent and a delinquency rate of almost one year - 275 days,” the minister told the House of Assembly yesterday.

“Because of this very high default rate the programme was suspended in 2009, ten years ago and we want to restart this programme, but we can’t because many of those 2,057 who owe money won’t pay and we are going to go after them as we have and seek to prosecute them and require them to pay.

“I am sad to say, Mr Speaker, some of those who don’t pay are public servants, they work for the government. We are going to seek the ways to have their salaries garnished.”

He continued: “When we came to office in 2017 and I credit the great work of the former chairman and present chair in bringing this where it is today, over $150m was owed to the Scholarship Loan Division, today it is $83m.

“And the thing about it is we have had in place now for a couple of years a very generous incentive programme. If you come in I think we knock off almost 40 percent, no interest. So if you owe $10 you only have to pay $6 and they still wouldn’t come.

“So we are working to remedy this. We want to restart this programme. There are many who come to us for loans and we are going to do what we have to do in order to make this a success.”

In January Mr Lloyd told this newspaper that the delinquency recovery rate needed to increase seven-fold as Bahamian taxpayers were “on the hook for $100m”.

At the time, he said, officials were about to hire a private collection agency “with the teeth” to pursue deadbeat borrowers after its staff found themselves “overwhelmed” by the sheer magnitude of the task.

With legal action the ultimate recourse, Mr Lloyd said the delinquency recovery rate needed to increase from the present $60,000-80,000 per month to $400,000-$500,000, or from $1m per year to $6-$7m, if the ELA is to “put a serious dent” in what it is owed.

Warning that his and the authority’s “patience has simply run out”, the minister criticised the “stubborn and recalcitrant” defaulters who refused to enter even settlement discussions, adding that they faced having their credit standing “permanently tarnished” when The Bahamas’ first-ever Credit Bureau goes live within the next few years.