Loans eyed to augment government scholarship By ALDWIN R. FAJARDO

The administration has completed drafting a proposal that will set in place a new scheme to extend adequate financial assistance to local college students without putting much pressure on the depleting public coffers.

The proposal is now up for review by officials of the Public School System and the Northern Marianas College, as well as members of the 12th CNMI Legislature.

Forced by diminishing resources, the government has been exploring alternative ways to continue providing local college students with financial assistance while assuring that funding for other essential programs remain in place.

The draft legislation is aimed at providing local college students with an education financing program that would allow them to secure guaranteed bank loans to fund school and other education-related expenses.

Similar to the financial assistance program extended by various American states to their college or university students, the proposed measure would allow students to pay their educational loans once they finished schooling and are already employed.

According to the governor’s special education consultant Dan Nielsen, the program is the most common way of financial assistance extended by several states in the mainland U.S.

Mr. Nielsen last week asked educators from the Northern Marianas College to review the provisions in the proposed legislation, while hoping to solicit strong support for the program from the education sector.

The process is expected to work for the benefit of both the government and the students. Similar to the study-now-pay-later plan, the program will lift the compliance monitoring and financing responsibilities from the government.

Under the proposed program, the government will act as guarantor for the educational bank loans of the students and will step in, in case the student-borrower defaults in payment.

However, most of the students under such program in the US do not default although the government sometimes writes off the loan.

This proposal cropped up in light of recent findings that the existing scholarship system has been extremely inefficient and overly generous.

In 1998, the government spent $4 million for financial assistance while at least $2.5 million have been appropriated for the same program last year. The figure represents over one percent of the total government budget and is about 7-8 percent of funding allotted to the Public School System.

Mr. Nielsen said the administration has been on a consistent review of the scholarship program to determine other ways that can be possibly installed to improve the extension of financial aid to local college students.

He pointed out that the government remains committed to make financial assistance accessible to the students but said the present economic condition has drained the commonwealth’s resources.