The Student Revolving Loan Fund which is known as the SRLF replaced the Higher Education Loan Fund when it was established in 1977 under the Student Revolving Loan Fund Act, 1976-20. Its body corporate, the Student Revolving Loan Fund Management was delegated the authority to administer and manage the SRLF. Its purpose was to provide funding to eligible Barbadians for priority areas of study and continues to be to increase the number of qualified persons. Administration of the SRLF moved from the Tertiary Section of the Ministry of Education as was the case for the previous entity to.
The SRLF secured three loans from the Inter-American Development Bank and with each loan agreement expanded its focus. The first loan of US$800 000 was for on lending to eligible Barbadians to pursue studies at the undergraduate level in areas which were considered crucial for the economic and social development of the country. The loan ceiling was Bds$30 000 and the maximum repayment period ten years. The SRLF had a staff of three and depended on a financial agent for accounting and financial support.
The second loan of US$2.0 million was disbursed over the period February 1984 to 1990. It allowed the SRLF to expand and modify its programme to include studies at the post secondary, technical and vocational levels at the Samuel Jackman Prescod Polytechnic, the Barbados Community College and the National Training Board as well as at the graduate level. The SRLF changed its financial agent to the Barbados National Bank and increased its staff to five.
The third stage of the SRLF’s development witnessed the disbursement of a final loan of US$6.8 million during the period April 1990 to 1996. It became a self-contained unit with additional staff members being hired to manage its finances and the computation of its operations. The maximum loan amount increase to Bds$50 000 and the interest rate moved from 6% to 8%. In 1990, the SRLF also established a Guidance and Placement Unit to serve as a liaison between the job market and potential student borrowers.
From 1996 to March 2004, the SRLF depended on Government to provide financial assistance for new loans but became self-financing thereafter. The SRLF lowered its interest rate for new loans to 6% in 2005, and in 2009 a variable interest rate was implemented and is tied at 1.5% above the central bank savings rate.
The SRLF’s social responsibility features prominently in its lending in that it offers a preferred interest rate and an extended repayment period as well as deferred interest charges during the study period. It has a variable interest rate which is legislated to be a maximum of 1.5% above the savings rate. This rate is currently 4% for all borrowers except technical and vocational student borrowers whose interest rate as stipulated by the Minister of Finance in the 2012 Budget is 3.25%. The general payback period is 12 years but up to 25 years is allowed, based on specific conditions. In addition, at the conclusion of the agreed study period, students are afforded an additional year known as a grace period when interest starts to accrue on the loan and before repayment becomes mandatory. This extra time is designed to allow students to find employment without having to immediately worry about the repayment of the loan.
Members of the Loans Unit are always willing to work with the borrowing public, providing assistance with the completion of the documents that support the loan application as well as processing requests for changes to study programmes and learning institutions, etc.
A Guidance Officer stands ready to provide information that will inform on the student’s final choice of programme, location and mode of study. This officer also identifies whether the program of study and learning institution is accredited. The SRLF however recommends to those persons applying to international universities, to access the services of the Barbados Accreditation Council. This is the expert body that can advise whether the programme of study or the learning institution is accredited. Only completed loan applications are reviewed by the Management Committee who determines whether a loan should be approved or not.
The SRLF has an in house lawyer who witnesses the signing of contracts. All parties are encouraged to seek independent legal advice prior to signing the contracts. The Legal Officer ensures that a waiver is signed by both borrowers and sureties. This Officer therefore meets with the parties to the contract in the knowledge that the Loans Unit have carried out all the necessary due diligence. Consequently, confirmation from the Legal Officer that all of the supported guarantees or mortgage or indemnity documents have been perfected is the authority for the SRLF to make its first loan disbursement.
The SRLF maintains on-going contact with its student beneficiaries during the study period when the loan is disbursed in equal installment. Certification of successful completion of the programme of study is obtained at the end of the study period. Contact is maintained during the grace period with three (3) reminders letters issued to both the borrower and sureties detailing the terms of repayment as well as their legal and moral obligation to repay the loan.
When one hears that the SRLF has filed judgments against borrowers and defaulters, people assume the Agency acted in haste. This is so far from the truth. In fact the SRLF seeks to work with the parties to the contract. Sureties are informed via the first default letter of the borrowers default status and requested to honour their contractual obligation to start loan repayments. Where evidence is offered to support an inability to repay, the parties to the contract both the borrower and sureties, are encouraged to meet with a Credit Officer. Financial accommodations can be negotiated such as amnesty, interest relief, loan deferment, forbearance and/or graduated repayments before initiating the SRLF’s credit collection ninety (90) days procedure. The SRLF’s attorneys-at-law complete a pre Action process that is similar to the Credit Unit collection process in that it demands the borrower and sureties repay the loan. Only after completing this would a Claim Order or judgment document be filed in Court. Defaulters and their sureties can therefore make arrangements to repay the debt at any of the three (3) stages, i) the in house collection process, ii) the lawyers Pre Action process and iii) after a claim or judgment has been filed in Court.
We must reiterate that in the event the borrower defaults on the loan, the sureties who sign Affidavits and the contract must pay. The SRLF has had only one (1) case in its existence where a surety refuted signing the contract. Handwriting experts were therefore called in to give advice on this matter which is before the law courts.
Unfortunately, there is a belief among some members of the public that the SRLF is a government entity and therefore borrowers and sureties do not have to repay their loan. The perception also exists that some borrowers have special circumstances. However, non-repayment indicates that the defaulter will not support future borrowers. As a result the SRLF’s ability to lend becomes impaired. As its name states, the Student Revolving Loan Fund is a revolving fund where repayments are used to cover outstanding loan commitments for student still in study as well as to finance new loans. Since April 1, 2011, the SRLF must also cover all administrative expenses from the collection of receipts and its investment portfolio as it no longer receives an annual subvention from central government.
The SRLF believes that all of its student beneficiaries are special. Consequently it expects each of them to use their specialty to find or create a job, and in so doing, to repay the SRLF’s loan. The SRLF has been in existence for thirty seven (37) years. The responsibility of its continued existence as a vibrant student lending agency is left to the present student borrowers and by extension their sureties. The management and staff will therefore continue to adhere to the SRLF’s regulations and policies to ensure its survival.
The SRLF loans are an Investment your future.