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Financial Information Month

5 Thing Borrowers Should Know About Caribbean Student Loans

5 Things Borrowers Should Know About Caribbean Student Loans

 This post if part of the Financial Information Month 2016: Student Loan Series. During the Month of October, I will be sharing information about Caribbean Student Loans, stories from borrowers and highlighting the missed opportunities to address the current issues with the Student Loan System in the Eastern Caribbean.

The student loan stories shared as part of this Financial Information Month Student: Loan Series point to a pattern of Caribbean Student Loan lenders, who fail to adequately communicate with borrowers, leading to lots of confusion. I am committed to providing helping borrowers minimize the real stress involved with having a Caribbean student loan.

Here are 5 Things Borrowers Should Know About Caribbean Student Loans

1. Understand the Stages of The Student Loan Cycle

Your Money Worth Student Loan Series Student Loan Cycle: In-School Period, Grace Period, Deferment Period, Repayment Period

The typical student loan cycle consists of the In-school Period after the initiation of the loan and the first disbursement of loan funds. Once the borrower graduates from college, then the student loan enters the Post-Graduation Grace Period which is typically 6 months.

The Deferment Period is an optional stage where a borrower who has not found full-time employment, for example, request relief from the requirement monthly installment payments required and delay the student loan from entering the Repayment Period.

Deferment can be requested after the repayment period starts, if a borrower experiences a job loss.

It is important to note that interest accrues starting with the initiation of the loan and the first disbursement of funds and does not stop until the loan is paid off. For Caribbean student loans, borrowers’ and their co-signers are required to pay interest that accrues during the in-school period. Making interest payments throughout the in-school, post graduate-grace and deferment periods will reduce the costs of the student loan by avoiding accumulated interest to be added to the principal balance.

Interest only stops accruing on the student loan when it completely paid off at end of the repayment period.

To learn more about the different stages of the student loan cycle down loan the Student Loan Answers Book Preview HERE.

2. Proactive Communication With You Caribbean Student Loan Lender Is A Must

Let’s face it. Caribbean Student Loan Lenders have a big problem with communication. In my personal experience, it seems as if making it difficult for borrowers to get account statements and information updates was their goal.

Still, no matter how difficult it might be, if you don’t want your loan to get messed up like mines did or experience the confusion and frustration this borrower did, and possibly end up in a years-long dispute with your lender, schedule time to request account statements and other account updates to be sent to you in writing from your Caribbean Student Loan Lender.

If you are a current student, request account statement at the end of everything semester to confirm that any in-school interest payments are being applied correctly to your student loan account and that all the disbursement transactions match the amounts that were actually issued and received by you.

During the repayment period, request statements at least monthly. Even if you aren’t provided a statement from the bank regularly, make it your business to request one from you loan officer and if you are dismissed or experience a delay in receiving your account information escalate your request up the chain of command.

Financial Information Month Student Loan Series 2016 More Related Articles

3. Tracking And Documenting Transactions on Your Student Loan Account Is A Major Key

On top of proactively communicating with your Caribbean Student Loan lender, it is just as important to track the transactions on your account carefully. Review your account statements to verify every transaction on your account periodically and flag any discrepancies that you find and request that they be addressed by your lender.

It’s a given that dealing with many Caribbean Banks is like pulling teeth, but it will be just a bit easier if your are on top of your account and set up a systems to secure all your receipts, statements and copies of your disbursement checks in case you ever have to provide documentation to support your requests for resolution of any erroneous transactions on your student loan account.

4. Know That You Can Pay Off Caribbean Student Loans Ahead of Schedule

Although Caribbean Student Loans can be a large burden on graduates, you can pay them off ahead of time. To do that, not only will you have to delay inflating your lifestyle, forego vacations and weekend brunches, but you will also need to setup your own repayment plan and closely scrutinize how your payments are being applied to your student loan account.

5. There Are Alternatives to Caribbean Student Loans

Most Caribbean college student access Caribbean student loans to fund their high education. In fact, a 2005 Assessment Report on the Caribbean Student Loan Scheme, found that 80% of borrower interview could not pursue a college education with using a Caribbean student Loan.

But there are alternatives.

  • Private U.S. Student Loans
    • Lenders like, credible.com offer student loans to international students who has an eligible co-signer who if a Permanent Resident of Citizen of the United States and is able to meet the loan credit requirements.
  • Organization of American States (OAS) offers Interest-Free Student Loan through their Leo S. Rowe Pan American Fund .
    • The OAS  accepts applications on a rolling basis. The loan information can be found HERE.
  • Scholarships specifically for Caribbean students do exist and you should apply for them.
    • Scholarships specifically for Caribbean students shoul  be considered as a source of funding for college. I share opportunities right on my Start Here page.

If you have a Green Card or you are a U.S. Citizen, like I was when I was going off to college, avoid taking out a Caribbean student loan, all together. You are better off choosing a cheaper school and applying for scholarships you are eligible for than taking out a Caribbean student loan.You should learn from my experience.


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The Caribbean Development’s Student Loan Scheme Assessment

The Caribbean Development Bank's Student Loan Scheme Assessment

 This post if part of the Financial Information Month 2016: Student Loan Series. During the Month of October, I will be sharing information about Caribbean Student Loans, stories from borrowers and highlighting the missed opportunities to address the current issues with the Student Loan System in the Eastern Caribbean.

Just over 3 decades after the Caribbean Development Bank set up the Student Loan Scheme in the Caribbean, a report on the assessment of the Scheme issued in 2005. The assessment explored the impact and effectiveness of the money provided to Banks throughout the Caribbean to offer student loans in the respective countries.


The Caribbean Development's bank Student Loan Scheme Related Article


What interested me the most about this report, were:

  • The interviews that the assessment team conducted with borrowers;
  • The  areas of improvement for Caribbean lenders identified; and
  • The fact that recommendations made largely remain unaddressed more than 10 years later.

I was very surprised that this assessment existed and even more surprised to read about the borrowers’ experiences that mirrored Caribbean student loan borrowers’ experiences with the same Student Loan Scheme today.

Here’s what the assessment found.


Caribbean Student Loan Borrower Experiences

Caribbean Development Bank Universalia 2005 Student Loan Scheme Assessment Borrower Experiences


Caribbean Lender Areas For Improvement

Caribbean Development Bank Universalia 2005 Student Loan Scheme Assessment Areas for Improvement for Caribbean Student Loan Lenders

 

I find it amazing that not much has changed since Caribbean borrower experiences were documented and specific recommendations for improvement for Caribbean lenders were reported.

What do you think about the 2005 assessment’s findings and recommendations?


Want to Learn More About Caribbean Student Loans? Grab This Book Preview!

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St. Kitts-Nevis-Anguilla National Bank Borrower Student Loan Story

St Kitts Nevis Anguilla National Bank Student Loan Borrower Experience

This post if part of the Financial Information Month 2016: Student Loan Series. During the Month of October, I will be sharing information about Caribbean Student Loans, stories from borrowers and highlighting the missed opportunities to address the current issues with Student Loan System in the Eastern Caribbean.

Today I am sharing a Kittitian student loan borrower’s experience with a student loan from the St. Kitts-Nevis-Anguilla National Bank Limited. The borrower requested to remain anonymous and I have respected that request. Here is this borrower’s Caribbean Student Loan Story.

Question 1: What best describes your experience with having a Caribbean Student Loan?

It has been a nightmare!

Question 2: When you first took out your student loan, what was your understanding of what you signed up for?

That it was [$37,202 US ($100,000 EC) ] I would pay the interest only while in [school] which would keep loan at [$37,202 ($100,000 EC)] then upon graduation, after a grace period, I would begin to pay off loan in full with comfortable monthly payments that was realistic to my income/expenses and that this would be calculated on the reducing balance system.

Question 3: Was it clear to you what the interest rate was, the amortization method used, how interest would accrue while you were in school & during the repayment period?

I was told [if] I paid interest only while in school I would not [have accrued] onterest in my loan until graduation. The opposite happened they charged me interest still.

Question 4: Were you the first in your immediate family/ household to go to college and take out a Caribbean Student Loan?

No.


I was told [that if] I paid interest only while in school I would not [have accrued] interest in my loan until graduation. The opposite happened, they charged me interest still.


Question 5: Did anyone in your family have a student loan who could provide guidance and tips to help you navigate your own student loan?

No.

Question 6: Share your experience navigating your student loan? What information was provided to help you understand your loan? Describe your experience communicating with your lender, and the customer service you received.

My experience has been like living in [hell]. No additional information has been provided to me despite my request. The communication between the bank and myself is horrible. They are not interested in answering my questions only collecting their money. Their phone service is horrible. I cannot verify myself over the phone although I answer all my security questions correctly, getting statements from them is a nightmare as well.

Question 7: Since having your student loan, how easy or difficult has it been to request disbursements, payment status or account balance information from your lender?

In the beginning, it was very difficult, I used to get disbursement via cheques and the cheques would either have the wrong name on it, the wrong amount or arrive extremely late. Then later on the money was deposited to my account and I would just have to pay by swiping the card. But even that was a challenge because the card would have a block on it for international transactions which was ridiculous since I lived in the USA. Every semester I would walk through hell just to get them to open up the card so I could pay my tuition. Then, in the end, it’s another battle of trying to get payment statements and balances.

Question 8: What have you found the most effective way to communicate with your lender?

Dealing with someone you or your family knows, personally.

Question 9: Is there any aspect of your student loan that you are still unclear of today (e.g. how payments are applied to your balances, how many payments you have left of how to pay off your loan faster, how to get your loan out of default, how to resolve an ongoing dispute)?

How my payments are applied to my loan and why my balance is hardly moving.

Question 10: Have you had any disputes with you lender related account transactions, outstanding principal or interest balances, fees or payments not applied as you expected?

Yes.


Related Article My Caribbean Student Loan Story


Question 11: Have you faced the situation of not being in a position to pay your required monthly payment? If so, did you request temporary relief from payment and was there clear information about how to seek out and be approved this relief?

No.

Question 12: What did you wish you had known about Caribbean student loans before you took one out?

That it was a nightmare and that I should have never taken out one.

Question 13: What advice would you give to someone who is considering taking out a Caribbean student loan?

My honest answer would be, don’t. Do a private [personal] loan, interest rates seem higher but in the long run it’s better than a student loan.

Question 14: Share any other thoughts you have about Caribbean student loans or your lender.

Banks need to come up with a system that opens the lines of communication and understanding between lender and borrower. Banks need to be timely and accurate on their statements. Banks need to improve on how students living overseas can access their accounts and verify themselves.

This is quite a story! I really wish this borrower did not have to go through this. Experiences like these highlight how serious the challenges are and confirm exactly why we need this Student Loan Series.

Tune In! Freedom FM 106.5 Youth Beat Radio Show

Freedom FM 106.5 Youth Beat Radio Show for FIM 2016

This post if part of the Financial Information Month 2016: Student Loan Series. During the Month of October, I will be sharing information about Caribbean Student Loans, stories from borrowers and highlighting the missed opportunities to address the current issues with Student Loan System in the Eastern Caribbean.

I am excited to share that the Student Loan Series is coming to Radio. Tune in to Freedom FM 106.5‘s Youth Beat Radio show, Wednesday, October 19th 2016 from 7:30 PM to 9:30 PM (EST) to listen to Tasha, Kimalee and me share our experiences with Caribbean Student Loans.

Student Loan Series on Freedom FM 106.5 Youth Beat Radio Show St. kitts and Nevis

You can listen in via the live stream on the Freedom FM website or download the TuneIn app and search for Freedom FM 106.5 station.

I hope you can listen in!


Financial Information Month Student Loan Series 2016 More Related Articles


We are still collecting stories! What has your experience been with your student loan? I would love to feature your story. Your can submit your story all throughout out the Month of October 2016. Just click the below to join the regional and diasporic conversation!

Submit Your Story


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Development Bank of St. Kitts & Nevis Customer Forum Recap

devtbankcusforum-blog

This post if part of the Financial Information Month 2016: Student Loan Series. During the Month of October, I will be sharing information about Caribbean Student Loans, stories from borrowers and highlighting the missed opportunities to address the current issues with Student Loan System in the Eastern Caribbean.

Back in May of this year the Development Bank of St. Kitts & Nevis had an online Customer Forum as part of their 35th Anniversary celebrations and the reveal of their updated website.  I was able to attend the forum and did a recap in the video below.



Development Bank of SKN Customer Forum Recap from Melisa on Vimeo.


Recap Video Highlights

  • The customer forum took place on the Development Bank of St. Kitts & Nevis’ re-designed website
  • Customers were able to view Development Bank Staff’s presentation on a live stream and ask questions in a chat box
  • One customer expressed not having any issues with their loans and an over all positive experience.
  • Another forum participant expressed that they had been making repayments for a number of years and could not understand how they were bring applied
  • Mr. Lenworth Harris the Bank’s General Manager and Mrs. Jasmine Irish the Loans Department Manager answered customer questions.
  • Development bank highlighted the new online customer service system.
  • Mr. Harris acknowledged that the Bank is aware that customer confusion about how their loans work and that the forum and the new online customer service platform was a way to address that.

It took a look around the new website and in addition to the online customer service platform, the website is easier to navigate and now mobile friendly. The new website does not include:

  • An online payment system for customers
  • Detailed information about loan products regarding capitalization, interest accumulation and how payments are applied to customer accounts.
  • Online account access for customers.
  • Online statements.

Did you participate in the forum? What are your thoughts on the changes Development Bank made to their website, including the new customer service platform?

Let me know!