Student loan instead of scholarship

The chairman of the powerful House Ways and Means Committee offered alternatives to a Senate proposal seeking a piecemeal budget for the government scholarship program in light of nearly 50 percent cut in its funding for this fiscal year.

If the government cannot support the scholarship program from its own funds, it should guarantee student loans from any financial institution to assist them in their education, according to Rep. Karl T. Reyes.

“The piecemeal budget the Senate is looking at is just an infusion of extra money to address the needs of the students,” he said in an interview.

His Senate counterpart, Fiscal Affairs Committee Chairman Pete P. Reyes the other day urged the House to consider passing separate measures for the scholarship and the medical referral programs to ensure sufficient funding from the government.

But Gov. Pedro P. Tenorio thumbed down any move to approve piecemeal budget, noting its potential impact on the shrinking resources of the government and operations of other departments and agencies.

The Ways and Means Committee chairman said he is looking at the possibility for the government to take out loans from banks on behalf of local scholars.

“I have no problem with the policy because we can look at different ways of increasing the money,” said Reyes.

Under the scheme, the government can guarantee the loans by paying its amortization through yearly appropriation while the recipient is completing his college education.

To entice students to avail of the loan, the government can provide incentives such as debt forgiveness of a portion of the loan for every year that a recipient works on the island, regardless of whether in a public office or the private sector.

“Every student that returns to CNMI to work, we can probably forgive 20 percent of the debt for every year that they work here,” the representative said. “This is an incentive that will allow these people to come back and work for us.”

Reyes added he will raise the issue with the governor to try to come up with a workable solution to the shortfall in scholarship funds. “It’s never been done before but I think if we can do it now, why should wait for somebody to do it,” he asked.

His proposal, however, is similar to a plan suggested by Rep. Heinz S. Hofschneider last August after several government scholars have expressed worry that they may not receiving their financial aid during this schoolyear because of funding deficit.

The study-now-pay-later plan is one of the recommendations made by the House Committee on Health, Education and Welfare, which is chaired by Hofschneider, in efforts to deal with the worsening scholarship problem.

A bill is expected to be drafted by the committee to put in place the proposal by January next year to assist students for the spring semester, according to the HEW chairman.