New Student Loan Penalties Wrong – Johnson-Smith
Opposition Spokesperson on Education and Youth, Senator Kamina Johnson Smith says she is extremely concerned at news that the Student's Loan Bureau has implemented penalties for the late or partial payment of loans.
The Senator says that while she understands the SLB is working on ways to increase re-payment of loans in the interests of all who seek to benefit, this step does not seem logical in the current economic environment or consistent with the SLB’s public messaging, and must be reversed.
She said: “In this tough economic environment where the Bureau is trying to get persons to pay what they have, a monthly penalty of $750 will only increase the burden on those who genuinely have challenges. Adding a further $9000 to the loans of persons already struggling to pay loans and interest is a backward and uncaring step.”
She continued: “The SLB cannot be running ads on radio encouraging debtors to pay what they have, but at the same time charging a penalty when they do so. How can they ignore that youth unemployment is more than 30 percent and many students who pay what they have are in low paying jobs that are not commensurate to their qualifications?".
The Opposition Spokesperson also raised concerns about the $1500 per month penalty applied to some loans. "Adding a $18,000 dollar penalty is really burdensome. We are really trying to understand the rationale for this, as when you add it to the interest rates, this could mean that many students will simply take even longer to pay off their loans!”.
Senator Johnson Smith added that the SLB and the Government need to find better ways to identify debtors who have real challenges, and to encourage timely payments without simply increasing the burden on struggling young people.