STUDENT LOAN REPAYMENT MUST BE COMPELLED

Editorial

PNG Post-Courier

PORT MORESBY, Papua New Guinea (June 10, 2009) – The Office of Higher Education is trying to sort out the great mess with the Tertiary Education Students Assistance Scheme (TESAS).

This is the scheme which is supposed to keep money revolving to ensure that needy students can get a loan to pay their education fees at university.

It was hugely unfortunate that of the K6 million dished out as student loans between 2000 and 2007, hardly anything had been repaid!

It turned out, as reported here recently, only one student of the hundreds of beneficiaries, had repaid his loan.

Now the OHE, after putting the scheme on hold for two years, is trying to make a better arrangement of TESAS to ensure that the financing is not depleted, that the loans are paid back so that future students can benefit from the same arrangement.

OHE director-general William Tagis told this newspaper that attempts were being made to recover the loans and a public notice in the papers recently was the first bid to get beneficiaries to co-operate.

Former beneficiaries were being contacted in an effort to get the loans repaid, he said.

As of recently, the scheme has been put on a better footing. Loans are given after parents or community guarantors agree to help repay the loan if the student beneficiary fails to do so.

We admire the concept but are a little cynical about its effectiveness. Schemes involving money and repayment of such money are not likely to work without some form of compulsion.

People and money are difficult partners. When you have achieved the objective of the loan, that is to get a tertiary education, you are not likely to be as receptive to repaying the loan. After all, you’ve had the benefit, you have consumed the "kaikai’’, who is to force you to repay?

Have our authorities studied similar schemes in other places to get something more workable? In Australia, we believe, students are contracted to have a percentage taken out of their salary once they get a job with a minimum level of income. In that way, the student who gets a degree and then a job because of the loan scheme, has no choice but to repay. It is taken out of the beneficiary’s hands.

We think that is a much more satisfactory way of doing things than relying on peoples’ goodwill.

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