by Kevon Browne
St. Kitts and Nevis (WINN): Prime Minister of St. Kitts and Nevis, Hon. Dr Terrance Drew, in a national address on April 6, 2023, announced the official rollout of the Graduate Finance Project, aimed at reducing student loan interest rates.
Previously, the Prime Minister shared that interest rates on student loans accessed through the Development Bank of St. Kitts and Nevis would be reduced to five per cent per annum for students undertaking tertiary education and those who desire to pursue higher studies.
“As of today, Thursday, April 6, 2023, the interest rate on student loans accessed through the Development Bank of St. Kitts and Nevis for new students has been reduced to five per cent per annum. The intention is to ensure that graduates can live and plan for better lives. The Graduate Finance Project offers five per cent interest on a maximum of EC$100,000 for a grace period of four and a quarter years with a 15-year repayment term. It also includes an EC$15,000 credit to service the student loan during that period which eliminates the payment of interest for the four years… under this new policy, students will now save up to EC$50,000 or more. “
With reduced rates, the Prime Minister hopes there will be some flexibility in graduates’ ability to create wealth without the burden of longstanding and hefty student loans.
“Typically, student return from their studies with high-interest rates and terms that delay important life events such as building their own homes or purchasing a vehicle and so choose to remain at home with their parents to help ease the financial strain… it can be challenging for someone to handle both a mortgage payment and a student loan payment. Having the debt can also make it hard to qualify for a mortgage in the first place. Homeownership is one of the largest areas of wealth, so delaying the purchase of a home has a major effect on a student borrower’s ability to increase his or her wealth. Reduction of the student loan interest rate to five per cent in addition to the credit offer will ease the student’s [finance commitments].”
Dr. Drew ended his address by emphasising the importance of education as a driver for progressive social and economic growth.