Overhaul scholarship program –– Nielsen

CNMI’s scholarship program must be overhauled to maximize available resources for greater benefit of deserving local students, according to the governor’s special assistant for education.

A plan to develop a government-guaranteed student loan will help deal with mounting problems plaguing recipients of existing financial assistance program as it will ensure availability of funds.

“The current financial aid system is untenable and broken that can’t be fixed. We can throw a lot of money at it but we don’t know how effective that money is being spent,” said Dan Nielsen in an interview with reporters last week.

Saying that CNMI offers the “most generous” financial aid to its students in the nation, Mr. Nielsen maintained the administration gives “high priority” to their needs as indicated by the budget set aside by the government.

Although cut by half compared to previous year’s level, the amount — $2.3 million — proposed by the governor under FY 2000 spending package is still 1.25 percent of the total $206 million budget proposal.

“That’s an amazing amount of money just for financial aid. . .In fact, the most generous financial program in the entire United States and all of territories,” said Mr. Nielsen, noting the government does not require financial eligibility and GPA.

Despite this leeway provided to scholars, almost half of them fail to complete the program and drop out from college without the government obliging them to pay the money back, he said.

“The current program is not working. We will never be able to provide all the financial aid for all students that need it. We just can’t,” Mr. Nielsen pointed out.

Moreover, it discourages students to seek other financial aid program, especially those granted by the federal government, which puts all the burden to the CNMI.

Student loan

To ease impact on local coffers and to ensure funding every year, the administration will submit by this week proposed legislation that will establish a student loan program intended to replace all existing financial aid doled out by the government. (See related story on Page 2)

“The governor has no disagreement with the Legislature that we need to provide as much financial aid to our students as possible,” said Mr. Nielsen.

Anticipated to begin implementation by Fall 2000 semester, the proposal will provide all the necessary funding to finance higher education of CNMI’s students.

At least $2 million every year will be put into a trust account which the bank can then leverage so that the money can be increased to loan to students for as much as $48,000 for a four-year college degree and $125,000 for graduate degree.

This will not pressure them to repay the loan while attending school as the government will subsidize the interest rate.

Likewise, repayment will come after graduation when they have a job and that the amount can be reduced if they decide to work on the island either in the government or privates sector.

“It’s a win-win situation. We want the largest number of people to receive as much money as possible for as long as possible,” said Mr. Nielsen.

At present, about 1,100 students are receiving the three financial aid given by the CNMI, such as the Educational Assistance Program, Teacher’s Scholarships and the academic scholars under Public Law 7-32.

But due to serious financial difficulties confronting the Commonwealth, lawmakers and administration officials have clashed in recent months over implementation of the policy as both sides argued on how much money should be appropriated for scholars.

The Scholarship’s Office in August cut the amount of the grants and eliminated EAP for part-time NMC students in efforts to avoid huge deficit and spread the meager budget to all the recipients.