The effect of students’ loan debt on the Caribbean shores

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R.D. Miller has been a member of the criminal justice field for over 15 years. He holds an MBA and a M.S. in criminal justice and leadership.

By R.D. Miller

Numerous nations around the world sometimes introduce rules and regulations that can be linked to another nation. Some, may not fit all backgrounds of different cultures and traditions. Nonetheless, many developed countries share basic principles on commonly agreed-upon approaches to similar problems. For instance, the fight against drugs, crime, and environmental issues.

Although some variation may not have worked as intended, a recent proposal on February 8, 2020, according to reports, Robert Nesta Morgan, parliamentary secretary in the office of the Jamaica prime minister, announced that an incentive plan was in place or being developed to give students an opportunity to have their debts forgiven for public service work. It is one of the best imported seen in a while to arrive on these shores.

“The Brain Drain of the Caribbean Nurses,” in a previous opinion it highlighted a few concerns some local heroes talked about in the medical field, surrounding lack of resources, patients’ lives, staff safety, job protection, wages and failure by leaders. Thus, these issues have led experienced-well-trained nurses to leave the region once they received their nursing degree to work elsewhere, but overall student loan debt was one of the major driving forces.

A few times my telephone rang from friends I have met while in the region who told me that they have migrated with their family.  And when I asked, “why that side of town?” the response, “my wife is working as a nurse.  It is remote, one major department store that carries everything, I miss home, but it will be a relief from her financial burden.”

Their story is one of many across the Caribbean region of residence leaving to Canada, England, US, and even other Caribbean islands. This student loan proposal should be implemented and be adopted by other poor and developing countries who may not already have this incentive.

Regardless of the political party, student loans help many people to attend college, graduate and earn a degree for a brighter overall future.

Though the proposal is a step in the right direction and; it is not clear on the final details how it will be funded, and that cannot be captured in a few tweets. But like other nations who participate in this program, there are requirements and commitment for individuals to participate.

The expectation in the long-run is that it benefits all, and simply not an election talking point, seen elsewhere to generate election votes-based on this platform. There were prior reports of free healthcare leading up to the past elections where many are still waiting on bed space, and the result of the free test, but this program may have a solid ground. After the announcement, social media responded in high numbers. Many students on these shores will benefit from these loans burden and may change an appetite just waiting to leave if an opportunity presents itself to migrate.

Evidence shows that student debt jeopardizes the financial wealth of many households, and the economy in the long-run not only in the Caribbean but in other countries.

This debt burden has also contributed to the Black-White wealth gap across the wealth distribution. Other studies have shown that about two in five households now owe student debts loans and that number is increasing.

A person with about $45,000-53,000 in educational debt can lead to a lifetime wealth loss of about $215,000. This also affects one’s retirement, long term saving, and lower home equity according to educational experts.

Student debt has surpassed $1 trillion in the US and the delinquency rate increased to over 50 percent. These studies also showed the suicide rate in the United States reached the highest levels in more than a decade. I do not know if most of these suicides are 100 percent related, but others noted the negative for individuals between ages 20 to 31.

Understanding student loans is extremely important such as financial literacy in general. It educates individuals to avoid the predatory lending trap, unsolicited credit cards to investment strategies. Additionally, tracking re-payments to ensure it is forgiven on time as other programs elsewhere have been sued for denial after eligibility. But I will leave that to the local experts to continue more awareness.

Going forward school officials should be responsible and encourage students to maximize all options from scholarships, grants and aids before taking out loans; and career counseling suitable to gain employment after graduation.

These loans can be influenced by household size, marital status, income levels, and work status; therefore, differentiating traditional loan repayments, to those that will be driven by income base will be important. Students should understand how the symmetry will work between traditional banks and government loans, but for now, it is a major step forward if created for the correct reason.

If the private sector and local non-profit organizations later participate in collaboration with the government, it could have a broader positive impact.   However, with any new important policy, it may need to make future changes and tweaks. And judging from a few social media responses, there are questions remains to be answered.

Example: Minister of foreign affairs and foreign Trade, Senator Kamina Johnson Smith, tweeted, “I think this is a great idea worth exploring! 50percent or 100 percent, 5 years or 10 years; Police with forensic and cyber capacities, Nurses critical care, Teachers (esp STEM) – is this something that would be part of the bi-national commission to discuss? Or examined separately.”

I believe her conversation was extremely important and does not change the fact that these loans were used for tuition, books and supplies, and living expenses. One hope that this new loan forgiveness is not defined as to one’s degree, but an incentive to attract the best and the brightest, and retain them. It is like a private corporation giving you a bonus stock option upfront or a reward for your work.

This application should not create additional social stratification as to what jobs are more important to be considered. Attracting and retaining the right workforce will be an economic win-win for the nation. The common denominator should be public service.

Tyrone who make sure that your water is clean and that trash is picked up or Suzie who process your property tax daily;  and Nadine who went to school to study agriculture; and still paying off those loans, but became unemployed when her factory closed, but she always liked cooking, and now prepare your child school lunch at the primary school, they are also government workers

These loan incentives were first developed by officials to compete with the private sector to attract and retain the brightest. It is more than likely that your public service career will not make one extremely wealthy, as these public service positions often like being a law enforcement officer that is put in a position of authority.

One must be dedicated, physical and mentally fit where pride and sense of duty dictate success or failure. It is a career that helps to maintain a good standard of living, and in the end, have a smooth retirement package (hopefully).

Finally, before you pick that academic institution to build your dream career, this is a candid conversation potential student should discuss with their families because far too often, retired parents are left to carry the burden just simply wanting to see their children get a chance at being successful, and one should not kill a good idea even if you have ideological difference with the messenger.

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