Basseterre, Saint Kitts and Nevis, April 6, 2023 (Press Secretary, PMO): The St. Kitts-Nevis Labour Party Administration (SKNLP) under the leadership of Prime Minister the Honourable Dr. Terrance Drew continues to implement its general election campaign pledges made in August of 2022. The SKNLP made a commitment to implement a Graduate Finance Project (GFP) in which the student loan interest rates at the Development Bank of St. Kitts and Nevis (DBSKN) would be reduced to 5% and all student loan holders will receive a $15,000 credit to service their loan at Development Bank.
The Graduate Finance Project takes effect today, Thursday 6th April 2023, under the theme “Removing Financial Barriers to Education”.
This initiative, which was listed among the proposed projects in the SKNLP’s POST COVID RESET campaign, brings relief to our students who were affected by the financial and economic hardships caused by the COVID-19 pandemic.
The first phase of the GFP offers 5% interest on student loans, to new students within the Federation, on a maximum of EC$100,000.00 for a grace period of four and a quarter years (4 years, 3 months), with a fifteen (15) year repayment term. It includes a EC$15,000.00 credit to service the student loan during that period, which eliminates the payment of interest for the 4 years, 3-month period. The 5% interest takes effect after the 4-year, 3-month period.
A lower interest rate reduces the monthly payments for our students required to cover the principal and interest. With an interest rate of 5% at 10 years and 9 months, which is the remaining period after deducting the 4 years and 3 months from the 15-year repayment term, graduates’ payments will range from EC$1,000.00 to EC$1,500.00 per month.
Under this new policy, students will now save up to EC$50,000.00 or more over the period of the loan.
In his statement made earlier today (Thursday 6th April 2023) announcing the new programme, Prime Minister and Minister of Finance Hon. Dr. Terrance Drew stated that the objective is to offer financial relief to graduates to make it easier for them to pursue their life goals.
“The reduction of the student loan interest rate to five percent, in addition to the credit offer will ease the student finance complex. We understand the financial strain that resulted from the COVID-19 pandemic and therefore, it is our aim to ensure that students who desire to pursue higher education receive the necessary financial support they need”, said Prime Minister Drew.
He added, “Students return from their studies to 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 they have acquired. It can be challenging for someone to handle both a mortgage payment and a student loan payment. Having debt can also make it hard to qualify for a mortgage in the first place. Homeownership is one of the largest builders of wealth, so delaying the purchase of a home can have a major effect on a student borrower’s ability to increase his or her wealth.”
A lower interest rate reduces the lifetime costs of university studies.
You can visit the Development Bank of St. Kitts and Nevis website https://skndb.com/ for more details.