PHILIPSBURG–Education Minister Wycliffe Smith presented what he coined a “well-rounded” draft national ordinance on study financing during a meeting of the Central Committee of Parliament on Friday.
The current legal basis for the granting of study financing is in the national ordinance ‘Landsstudietoelagenregeling’ 1961.This “heavily outdated” ordinance was intended for students who wished to study in Curaçao and the Netherlands for limited study programmes. In 1994, the modernization of the practice of study financing was started and continued until 1997. This modernization initially led to a new draft regulation which was never ratified. The new regulations were, however, used in practice as policy.
According to Smith, the general rule is, once eligible, students receive study financing for 40 per cent grant and 60 per cent loan. The ratio is more favourable once the student returns to Sint Maarten, which is one of the incentives that will be established with the ordinance. It is possible, however, that the ratio is less favourable depending on if the annual parental income [taxable] of the student falls between NAf. 100,000 and NAf. 250,000, then the ratio is 20 per cent grant and 80 per cent loan. If the parental [taxable] income is more than NAf. 250.000, then the study financing will be 100-per-cent loan.
Study financing from government covers completely or in part the cost related to tuition, living expenses, housing and study materials. Travel cost to the place of study is reimbursed on the basis of government’s official travel policy. “The government considers it important that students are insured against medical expenses on the basis of current legislation. If the country of the study prescribes that a health insurance of that country is legally required, the students receive a reimbursement for this cost.”
The study financing is sufficient to study at educational institutes with which Sint Maarten has concluded a cooperation agreement. In other cases, a parental contribution of about 25 to 50 per cent is required, depending on the location of the study and the level of living expenses.
Students who study in the Netherlands can appeal to the Divisions Study Financing DUO in the Netherlands. Students are therefore not eligible for reimbursement of tuition and examination fees through this ordinance unless for the Arts and Sports those students are not eligible under DUO.
Smith said when a student is granted study financing to pursue a master’s programme after completing a bachelor’s programme, the study financing will become a 100-per-cent loan, unless the master’s degree is included in the nominal study duration. “The government is of the opinion that these students can (partly) enjoy an income from work, since they have already completed a preparatory course, so that the cost for (government) can remain limited. In addition, after completion of the study there is a greater chance of a higher income, given the final level of the master’s degree programme.
“The ministry finds it of importance to stimulate the development of talent as much as possible, culturally and in sports. Talented individuals are of much value to society and set examples for their peers. Often these students do not choose a priority study; therefore, they are exempted from those criteria. Otherwise, the same rules apply, so these students also receive partly a loan and partly a grant; they have to send in their results and keep in contact with the Division of Study Financing.”
The application procedure closes on January 15 of the calendar year for which study financing is being requested. After the application period has ended, the minister has until May 15, with a possible extension of a month to decide on the requests. The draft ordinance has now formally established the advisory committee on complaints and objections. They play a key role with regard to objections lodged by applicants in cases where the study financing was initially not granted.
Obligations during study
Study financing recipients must provide information on the income of their parents yearly since this can have an effect on the amount of study financing that will be paid out. Students must also provide their study results (twice a year) on December 31 and July 15, so that their study progress can be monitored. They also have to provide their contact information. Not earning sufficient credits or failing to send in the study results may result in a reduction or termination of the study financing payment.
Suspension of study financing
If students do not fulfil their obligations, their study financing can be suspended. Students get one month to rectify and fulfil the obligations. If a student fails to do so, study financing will be suspended until the obligation has been fulfilled. In unforeseen situations, a recipient can also ask for a suspension themselves, for example in cases of illness. In that case, students do not run the risk of losing their right to study finance, due to unforeseen circumstances outside their control. The suspension is maximized to one year, after which the study finance can be terminated. During the suspension, the student does not receive study financing. Students therefore are directly affected by it and in practice, students tend to rectify and fulfil the obligations as a result. After the criteria have been met, the student receives study finance as normal. The period that was not paid is not reimbursed, otherwise the suspension would not have any effect.
Termination of study financing
The draft ordinance sets rules on the termination of the study financing. The minister allowed to terminate study financing in cases in which study finance has been granted in breach of the ordinance or in cases where false information was given (fraud); cases in which the student, after one year has passed, did not improve the study results and cases in which the student did not send in the study results and six months have passed. “Although we try to cover as much ground as possible, no ordinance can cover every situation. With this in mind, we want to ensure that in cases of unforeseen circumstances, where the outcome of a termination is clearly unjust for the student, the minister has the authority not to terminate. This needs to be well motivated and can only apply in special cases,” Smith said.
Procedurally it is important to know that in the event that study financing is revoked, the student will be informed in writing of this decision along with the repayment scheme. The student can file a formal complaint against this decision. The Complaint Committee will handle the case and will review the case. After the decision has become final, the student has to repay the loan according to the repayment scheme.
In normal cases, so in cases where there is no fraud or misuse, the student starts to repay after 2 years. In cases of fraud or misuse, the student has to start repaying immediately. Furthermore, in those cases, study financing will become a 100-per-cent loan, so that even the grant part will have to be paid back. This penalty is to avoid fraud or misuse.
For all students, the termination has the effect that students cannot apply for study financing for the same study. This is also a form of penalty. Only when a student applies again for study finance for a study of higher level, a student can apply a second time. “Government finds these provisions suitable given the high cost for the country versus the success rate of the students thus far.”
Repayment and collection
After graduation, students have to repay their loan. Also, in cases where the study finance was terminated, students are obligated to repay the interest-bearing loan. This is to ensure the long-term sustainability of the Study Financing funds.
After graduation, study financing will be stopped. However, students have to inform the Division of Study Finance of their graduation. If they don’t and don’t send in their study results, automatically after six months the study finance will be terminated. When students do not apply for an extension, the study finance will stop automatically. Study Financing also ends at the end of the nominal study duration, and during the nominal study duration in cases in which students do not send in the required information based on article 23. If a student stops studying, the study finance stops as well, and no decision has to be made.
After graduation, not all students will immediately find a job. Consideration is also given to the fact that students may need time to settle down and start their new lives. Therefore, it is fair that students who have indicated that they have graduated, get time to find a job. After two years in these cases students have to start repaying their loans. In all other cases the repayment will start immediately as a penalty for not adhering to the provision within this ordinance be converted in a 100-per-cent loan. The repayment of loans will be in monthly instalments with interest. The interest cannot exceed 5 per cent (it is maximized in the ordinance). This is to prevent unreasonably high costs for students or that the interest can be raised without the consent of Parliament. Every student will receive an individual repayment scheme. This repayment scheme is based on the original study finance decision and will consider any changes to the study financing received by the student. If debtor cannot pay this amount, then a review can be requested. The debtor will need to submit a request for a recalculation. Students can also apply for a recalculation by means of a review procedure. Additionally, in cases in which they claim the amount is not correctly calculated. After a decision, the student can submit a formal objection in accordance with the LAR. The Receiver is the entity that has been given authorization to collect the loans. If a student does not pay his or her monthly payment on their own accord, after 3 months (90 days) the Receiver can start to enforce payment through a special procedure (dwangschrift). This period is similar to the procedure followed in civil law for payments of contracts, services and goods, etc.
The ordinance also allows for a payment of more than the monthly amount. This gives flexibility to the debtor.
An incentive for students to return to Sint Maarten and contribute towards brain gain is that students who have decided to come back to Sint Maarten and work for at least 3 years, can have their debt lowered by 20 per cent. Legally the system cannot guarantee job security. A system in which it is mandatory to come back and work is therefore not possible. Instead of giving fines or penalizing the students, the ministry has opted for incentives and a reduction in debt for those who do return, Smith said.
Smith said a new ordinance was necessary as the current legal basis raised questions as to whether or not Sint Maarten had the legal authority to grant study financing, and which executing agencies were legally authorized to ensure the collection of monies received from study financing. These questions were answered by the Court of First Instance in 2015. The Court indicated that the legal basis was embedded in the original ordinance of 1961, and the Court acknowledged that the current policies, practice and execution were based on the regulation from 1997, although it was never ratified. “This left us with a complex situation, as the legal basis, according to the Court which dated from 1961 had very different provisions than the regulations that were used for the execution of study financing. So, the judge ruled that government could grant study financing as a loan, however, granted loans could not be adjusted with interest,” Smith told MPs. Additionally, granting study financing under the 1961 Ordinance meant that it was governed under civil law and not administrative law – the study financing was granted under a civil agreement between the student and government. As a result, there was uncertainty about the execution (both the Division of Study Financing and the Receiver’s Office) which in turn complicated the process of repayment or collection. To solve this problem, the Ordinance on Study Financing needed to be put in place, additionally because of a time lapse of more than 20 years since the last updated policies and regulations. After 20 years, these needed to be updated and synchronized with the current international and regional trends within the educational system, Smith noted.
The minister called the ordinance well rounded as it even provides for an evaluation of the effectiveness of the study financing structure after five years. This evaluation will provide government with the opportunity to assess if there is need for possible adjustments or enhancements. The ordinance will not have repercussions for students who are already studying. Only new applicants who have been granted study financing after the ordinance has come into effect will fall under the scope of the new ordinance, once in effect.
After presenting the draft ordinance and questions posed by Members of Parliament, the meeting was adjourned and is expected to resume in two weeks.
Source: The Daily Herald https://www.thedailyherald.sx/islands/79689-well-rounded-draft-study-financing-ordinance-presented-to-parliament
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