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Undercurrents: Board of Education Gets Tough, Gets Results

A regular Source feature, Undercurrents explores issues, ideas and events as they develop beneath the surface in the Virgin Islands community.

Collections efforts by the Board of Education in recent years are beginning to pay off big time. More and more recipients of college loans are actually paying them back. Moreover, the board is getting serious about reminding scholarship recipients of commitments to work in the Virgin Islands.

“It was really bad” in the past, said Laurie Isaac, who has worked for the Board of Education more than 30 years and is currently director of business and finance. At one point there was upwards of $1 million in student loans outstanding – and only about $200,000 being repaid annually.

The picture was much changed in the school year that just ended. In the 2013-14 school year, the board loaned V.I. current and soon-to-be college students $1,743,675. In the same period, it collected approximately $500,000 in loan payments, Isaac said.

“I’m very comfortable with what we’re doing now,” she said.

Isaac said she reminds loan recipients that “it’s a revolving fund.” As money is paid back, it can be used to make more loans.

The board also administers a number of scholarships/grants. It awarded roughly an equal amount of money in scholarships as it did in loans this past year: $1,754,400.

Most are very small, general scholarships that go along with the board loans, but there are also a few somewhat larger scholarships created by the Legislature that are specific to a course of study and often honor a Virgin Islander who excelled in the given field.

Many of the specialized scholarships require the recipient to agree to work for one or two years in the territory after graduation.

Isaac said the board received a little over 1,400 valid applications this year. A few students got special legislative grants. Each of the rest received a $500 general grant and a $1,000 loan at 6 percent.

“Our goal is to help everyone,” Isaac said. If you apply and you meet the criteria “you’re going to get something from us.”

The criteria are not stringent. According to the board website, an applicant must be a resident of the Virgin Islands, a graduate of a V.I. high school, in financial need, be accepted to or be attending an accredited institution full time, and maintain a grade point average of 2.0 or above. The applicant has to supply transcripts of his or her grades to the board. There also must be an “endorser” on the loan application who is equally responsible for repayment.

Students who apply once can continue to apply each year throughout their college career. Isaac said this past year, about 75 percent of the applicants were already in college; the other 25 percent graduated from high school this spring.

The money goes directly to the student, not to his or her institution, Isaac said, because it is less cumbersome to administer it that way. She acknowledged the danger of a student keeping a grant and dropping out of school, but said that is a relatively unusual occurrence and, of course, the student is then liable for repayment.

Isaac said collections began to improve once the board itself – rather than the Finance Department – was given responsibility for them. The board tracks students throughout their college career. Recipients do not have to begin repaying loans until a year after graduation.

Each January, the board sends out a congratulatory letter to all loan recipients who should have graduated the previous year. In March, it sends another letter, notifying them that payments start in July. If the person is still in school, he or she can get a further deferment, but only with proof of enrollment.

There’s no problem getting payments from loan recipients who have V.I. government jobs. Since 2000 there has been a clause in the loan contract authorizing the board to deduct payments from government paychecks.

“That has worked well for us,” Isaac said.

Additionally, and especially for those not in government, the board has taken some cases to small claims court and turned many cases over to a collection agency.

The board is also trying to tighten up on people who received conditional scholarships. Typically these require them get a job in the field in the territory within a year of graduating, unless they go on for a graduate degree.

“We just have a handful that has actually come back” to work in the Virgin Islands, as they committed to do, she said. So the board has decided to track them and remind them of the obligation.

It started this year with recipients of nursing scholarships from 2008 forward, Isaac said. In January the board sent letters to those who should have completed the program, asking them their work status, and giving them until the end of this month to make arrangements as necessary.

“We have some that have not responded at all to us,” she said. Some say that although they graduated, they are still trying to take and pass the final certification test. Some say they want to return, but they can’t find a job in the territory. Others say they are making far more in a stateside job than they could ever hope to make back home. Some say they would rather repay the money than return to the territory.

“So far, we’ve turned 10 (scholarships) into loans,” Isaac said.

Clearly the board is making progress on all fronts.

“Our (loan) delinquency is about 13 percent,” Isaac said. It used to be “almost a 30 percent.” The work isn’t over though. “The board would like to see about 5 percent.”

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