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
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.
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.