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?
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?
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?
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?
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.