Opinion: Study financingPOSTED: 08/2/12 6:33 PM
We’re not sure where Finance Minister Tuitt wants to go with his plan to privatize study financing, but we may be able to make an educated guess.
Putting the money for scholarships in a privately run (though government supervised) fund seems in itself to make little sense. The government has to put up the money for the program anyway; the argument that the money from students that are paying back their loans would fund the grants for new students thereby making it no longer necessary for the government to pump money into the program every year, only makes sense if one condition is met.
That is obviously that students that are supposed to pay back their study loans are actually doing this. History shows that students are not too eager to comply.
This is why a privatized study financing fund could make sense: it will operate like a collection agency. If that is the real reason, students better pay attention before they accept a loan and take a good look at the conditions.
Collection agencies are not known for their leniency. If money is owed, a collection agency will get it – one way or the other. This means that life for defaulting students will become a tad more complicated. Sooner or later they’ll be confronted with a bailiff if they don’t pony up.
If it works, Minister Tuitt is right: such a system would save the state quite some money, as long of course as it keeps an eye on the goings on in a privatized organization.