BUDGET 2024: Student loan interest rate to be reduced

Minister of Finance, Economic Planning, and Technology – Camillo Gonsalves. Photo: A screenshot from the API’s LIVE streaming.

By Admin. Updated 6:30 a.m., Tuesday, January 9, 2024, Atlantic Standard Time (GMT-4).

People who have loans with the National Student Loans Company will this year see a decrease in their interest rate.

During his budget speech on Monday (January 8), Minister of Finance, Economic Planning, and Technology – Camillo Gonsalves said the interest rates on student loans will fall from 6 percent to 4.5 percent.

The change will come into effect after the passing of the 2024 Appropriations Bill, known as the National Budget.

He said the decision was made “after extensive consultations with the National Student Loans Company over the course of 2023, with an eye on existing interest rate trends, borrowing costs, and delinquencies”.

“This will undoubtedly be welcome news to the students and families currently taking advantage of this programme, as well as those who have been faithfully repaying their loans,” he added.

The finance minister said, however, that the government will take action to address the high rate of delinquency within the programme.

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“On the other hand, we also agreed with the National Student Loans Company that more can and should be done to address the unacceptably high rate of delinquencies within the programme. Recent analysis indicates that far too many of the delinquent borrowers are gainfully employed persons – many within the civil service – who have simply decided not to repay their loans,” he said.

“We will employ various measures this year to remind those delinquent borrowers that student loan repayment is not optional,” he added.

The National Student Loans Company, the successor to the Student Loan Committee of 2002, has a loan portfolio of $32 million and 744 active accounts.

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“There are 187 current students taking advantage of this programme, and accessing $5.4 million worth of loans,” Mr. Gonsalves said.

He said the reduction in the interest rates is the fulfillment of a 2020 Manifesto promise of the Unity Labour Party – ULP, the implementation of which was delayed due to the impact of the La Soufriere volcano and the COVID-19 Pandemic.

“The impact of the La Soufriere eruptions and the post-COVID spike in interest rates conspired to delay that pledge, but the time has come for its fulfillment,” he said.