Loans to students who utilise the government-funded Student’s Loan Bureau (SLB) will be reduced to single digits soon said Minister of Finance and the Public Service Audley Shaw.

Shaw, who was guest speaker at Barita’s Financing Education luncheon earlier this week at the Knutsford Court Hotel said the pressure to lower lending rates will not only be applied to the commercial banks. He said in the same way the banks are being encouraged to reduce rates, the government funded SLB will be told to offer lower interest rates to students.

“I want single digit interest rates for the students who are borrowing money,” said Shaw. “I am going to send that signal to the SLB.”

He noted that students are now paying interest rates of 12 to 15 per cent and that these rates are too high given the government’s move to lower interest rates this year. Shaw said with the government receiving loans at interest rates as low as 1 per cent, this should translate into lower interest rates for students who receive loans from the agency.

“If we borrow cheaper and borrow smarter then cheaper money must get into the SLB and hence cheaper loans must go to students,” Shaw argued.

He said with the government receiving US$2.4 billion in loans over the next 24 months at rates between 0.6 and 1.5 per cent, there should be more money to provide loans to the students. Loan applications at the SLB has doubled this year to over 6000 persons as more students meet the matriculation requirements for university. Shaw said with benchmark interest rates now at eight percent, the lowest in over 20 years, it is time to provide more loans and at a cheaper cost. “We want to lend them more money and at a lower rate,” said Shaw. He said the government is also guaranteeing US$20 million to be used by the SLB to enhance its capitalisation and its ability to lend more.

Shaw added that the government would also be diverting funds from the Petro Caribe agreement to fund the SLB. He said the funds, at a rate of one per cent to government, was being misused in the past to “maintain loss making entities” such as Air Jamaica, the Sugar Company of Jamaica and the government’s ownership in alumina productions, when it could have been used to provide funding for education.

He said now that the economy has stabilised, the country must look to growth so that the Government of Jamaica, like that of Barbados and Trinidad, will be able to provide free education up to the university level.