Reduced Access to Tertiary Education: Dilemma for the Poor

by: Kymberli Whittaker

"Do well and you will be rewarded". This is the foundation on which educational goals are set. The higher up you climb on the educational ladder, the better off you will be. Children are admonished to pass GSAT (Common Entrance in my day) in order to go to a prestigious High School; then get good results at CXC so they can either go to Sixth Form or go straight to University. 

The objective of getting good passes at Fifth and Sixth Form is to gain acceptance to University to become the famed, Doctor, Nurse, Lawyer, Teacher, and Businessman to make money and get a better life. If born “poor” or “financially strapped”, the saving grace for many in these challenging economic times is the Students’ Loan Bureau.

Children are told that the only “right” way to make it in life is to get an education. Yet it seems that this “right way” is becoming more exclusive and elusive for those who do not have the “right” pockets.

Currently, the Students’ Loan Bureau is yet to identify the 1 Billion from the 1.8 Billion needed to finance loans for students: 6000 new and 9000 returning for the academic year 2014-2015. The school year officially starts September 1, 2014…less than two weeks away.

For the academic period 2012-2013, the institution faced a significant challenge to meet the $4.2 billion needed.  In October 2012, $1.7 billion or 41 per cent of the projected $4.2 billion to be disbursed was identified at that juncture. This shortfall is obviously not a new problem, and yet here we are again, two years later, looking at the causes, pointing fingers and yet not finding any viable solutions.

The figures are disturbing as the numbers agreed to be disbursed this year is almost three times less than that in 2013. It is clear, that fewer people are receiving financial assistance from the main entity put in place to fund tertiary education for the poor, and there is less money to pay out to the reduced numbers.

The SLB's  Mission Statement is fast becoming obsolete:

“THROUGH A SUSTAINABLE REVOLVING LOAN FUND PROVIDE THE POOR AND OTHERS WITH AFFORDABLE  FINANCING FOR TERTIARY EDUCATION AND CLIENT SATISFACTION THEREBY CONTRIBUTING TO SOCIAL MOBILITY AND NATION BUILDING.”

It is evident the fund is not sustainable as is, and as a result will affect the poor and "others" with a ripple effect of reducing opportunities for social mobility and nation building through an educational platform. The fund aimed to benefit the poor will not be accessible to the poor. The poor ,who once they prove their need, have to pay money to insure the loan before it can be disbursed to the institution. The poor, who have to find additional sums for boarding/ living expenses if coming from rural areas, transportation, food, books and other materials necessary  to be successful in whichever degree they decide to pursue. The poor, who simply do not have it to begin with are at a greater risk of not being granted loans to assist in their social mobility.

We are in real trouble. Again, the news of the shortfall for the year  has come at the 11^th hour.  Hall Orientation has started  at UWI as the academic term draws nigh…yet, loans are still pending.  If we as a nation are not careful, the buck will stop at CXC for more and more students.

The loan scheme is to be a revolving  fund, however, those who have received loans in the past are not contributing to the fund as desired. Some persons simply cannot afford to repay their loan at the end of their university tenure as they are yet to receive gainful employment; others are employed in jobs which once their basic needs of food, shelter and clothing are met cannot  repay the loan while others simply choose not to. The latter  borrow and repayment is not a priority.

The Students' Loan Bureau has approached the private sector for funds to assist in closing the funding gap, but without any known success as institutions are unwilling to lend to SLB without a Government of Jamaica guarantee. It is evident that SLB's current loan model cannot sustain the growing demand for student loans without considerable yearly increases in capital. And even with a hundred per cent compliance rate for repayment, on the part of borrowers, the increased demand for more student loans calls for greater capital injection in the SLB.

Jamaica’s economic climate is harsh, however one has to acknowledge that we are treading through dangerous waters, as Bachelor’s degrees are almost a dime a dozen, with several institutions offering programmes and at the end of the student’s tenure,  jobs commensurate with qualifications are hard to find. The stance taken by the Ministry of Education in prioritizing certain degrees for loan assistance probably has been a long time coming. Popular degrees such as Business Administration and Law are to feel the pinch, as relevant and under-subscribed  professions are given priority.

Students have to be strategic in career choices as it is pointless to go to school for 3-4 years only to sit at home with the same degree.

Tertiary education is becoming grossly undervalued and out of reach, so what then  can we do to secure  the future of the country.? Depending on the government and their institutions is not the way. Firstly parents need to start saving from birth to lessen the burden, as I believe that much responsibility is shafted to the state. $100 saved religiously at intervals during a child's lifetime is one way. We need to get into the culture of planning for the long-term.

The NEI Reports have shown that many students are under-performing, year after year. I believe the Government should stop paying for CXC Subjects. Great initiative but the free mentality at this level  is not heralding positive results.  The money saved can be put in funds to assist our youth who have accepted the challenge to work and make it in life.

  The Private sector also needs to step up to the plate because the environment which will be created in a few years will detract investors and prevent economic stimulation thus reducing profits and directly affecting their business. Alumni of institutions, need to step up and invest in their people and thus invest in their country. Jamaica has come a long way and as citizens we need to take a more active role in our nations’ development to prevent tertiary education from returning to the luxury it once was.

Taxation or Extortion: Banking Charges and Taxes crippling the Ordinary Man

By Kymberli Whittaker

Effective June 1, 2014, a new tax will be imposed on all withdrawals from deposit-taking institutions through electronic banking, point of sale transactions (debit cards), cheques, banking hall transactions, ABMs, ATMs, ETMs and internet transfers. The only exception is internet transfers made by a person between his accounts in the same financial institution.

This move has been made in a context where Jamaicans have been pleading for relief from an unprecedented increase in Commercial Bank charges and fees. In an interim report to Parliament, the BOJ said fee income, not including fees for loan processing, now accounts for the larger percentage of total revenue for commercial banks.

For the nine-month period January 1, 2013 to September 30, the BOJ said total fee revenue stood at 19.5 per cent. Fee revenue was recorded at 16.6 per cent in 2012, 13.6 per cent in 2011, and 14.9 per cent in 2010.

The report, which was prepared for the Economy and Production Committee, indicates that the portion of income earned by commercial banks in relation to overhead expenses is the highest in six years. It further shows that in terms of cost recovery, fee income, excluding fees for loan processing, moved from 26.4 per cent in 2008 to 28.6 per cent last year.

It is evident that the commercial banks are looking to increase revenue and the government is looking to increase revenue all at the expense of the law abiding citizens. Banking is a business however where do we draw the line in what is acceptable?

This move to tax withdrawals will affect the group least protected by our Government, the middle class who bear the brunt of the financial burden of this country. This dwindling middle class who is already lawfully paying income tax and other sums which are diverted to mismanaged institutions in the name of attaining growth and stability. Money diverted to pay for roads with huge potholes, to pay exorbitant fees to the money making entities which have been divested by our government in the name of them making a profit, not breaking even.

The local think tank Caribbean Policy Research Institute (CaPRI) has stated that Jamaicans are not paying an unreasonable amount for bank fees, despite the significant rise in fees. In a report following a recently -concluded study, CaPRI said, "When viewed holistically, it is clear that for most of the commonly charged fees, Jamaican banks compare favourably with the banks sampled from other countries."

I assure CaPRI that the dynamics of other countries in terms of the financial spending power of their citizens are not comparable with ours, so referencing  countries, such as Barbados is not an appropriate measuring stick. Their minimum wage can go much further than ours, as I lived in that country myself for two years.

Mr Hylton, Group Managing Director  of the NCB told the  Economy and Production Committee of Parliament  that bank's fees and ratio of fee income to other income are competitive based on local, regional and international benchmarks, it is important to note that our salary and our standard of living do not compare relatively to these same benchmarks.  The people using the commercial banks here in Jamaica are the same ones who are affected by wage freezes, pay cuts etc, no employment, etc.

"Every mickle makes a muckle", and it seems as if no one desires that the working man keeps his mickle. Our salary is taxed prior to being deposited in the bank by our employers, it is subject to banking rates and taxes while in the bank and it will be taxed upon withdrawal of sums for our livelihood. What is the aim of the government? To decrease the revenue of the bank as a result of the foreseen preventative actions of many who will choose not to deposit their few dollars in the bank. Many persons bank for safety reasons, what are the perceived repercussions?

Many people say the ruling party, the PNP is not a government for the poor, I believe they are because the persons living in abject poverty will not be affected by the majority of their decisions. Who is affected? The middle class or the ordinary man.  We are being penalized for earning our money, saving our money, and spending our money.  What more do you want from us?

Jamaica needs a Revolution.

How Poor is the Poor?

How Poor is the Poor?

By Kymberli Whittaker

Data from  the Statistical Institute of Jamaica in 2011, estimates that around 20% of the Jamaican populace is living below the poverty line. Poverty may be defined as having little or no access to necessities and not having a proper means to sustain themselves. Necessities. What really defines necessities?

On the world stage, poverty is seen as inadequate access to food, shelter, clothing, clean water, or health care. To sum it up it refers to a person having a poor standard of living and being deprived of the basics. Images of children for example with protruding bellies, bulging eyes, bones pressing against the skin comes to mind.  Poverty may also be judged on the income received in US dollars, with receiving a small amount being associated with persons living in poverty. The correlation being that a smaller income means that one is not able to purchase the necessities. Necessities.

In Jamaica, the ones without what is deemed a legitimate steady income; the ones who wake up and have no jobs to go, can they for the most part be deemed all poor? Extreme poverty does exist in our nation as some cannot under any circumstances take care of themselves or their children and end up homeless or dependent solely on family, strangers and other organisations such as the government,  church and welfare organisations to survive,  however separate and aside from these cases which is unfortunately too many, I believe many persons hide under the umbrella of poverty to avoid responsibilities.

The category of persons whom I am referring to pay no light bill, yet have light. They do not pay for water, yet have water, whether in their pipes or at the neighbourhood standpipe. They pay no rent yet live or squat somewhere without hassle from any government agencies. They have no jobs, yet they do not die of hunger. In the “allegedly” poor communities whether in the rural or urban areas, no one with working mental faculties walks naked. They eat and live, and everyday has a rhythm. A rhythm of hustling to achieve their “necessities”.

Necessities differ based on background and goals. What is necessary for one man may not be necessary for the other. Food and shelter is a must, but when we look at persons who do not work or do menial informal tasks as a method of hustling and see them as automatically poor, we err and err seriously.

The cost of living is high I’m sure we have all come to accept that some persons will have more amenities at their disposal than others. We should however strive to be able to live at an acceptable standard, which means that we will need money. Times are hard yes, as who feels it definitely knows it, but for many who use the “I’m poor” excuse I do not buy it.

How many poor persons do you know who religiously gamble daily, playing games such as Cash Pot and Lotto, when they say they have no money to buy one board or zinc at a time to fix their failing housing structures? How many poor persons do you see “immaculately” dressed from head to toe, but are unable to pay for one (1) cxc subject to try to slowly take the steps to lift themselves from “poverty”. Most cook shops are in poor areas, who buys the food? Street Dances are kept weekly, do these people not buy drinks at each event? How many poor persons say they have no clothes to go to church or a job interview, yet they are covered in tattoos or their skin has been lightened systematically to a different hue, both of which takes money?

We need to stop facilitating excuses from this category of the “poor” and they need to be held accountable. Many are comfortable in their state of “poverty” and as a nation we cannot accept “being poor” as a limitation, for anyone who chooses this path. Sometimes we have to accept that poverty is a choice for some and in analysing the state of Jamaica and where we have reached, compared to where we should be, we have to adopt a no tolerance attitude towards this category.   Really, how poor are they?

September 2013

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