Gov wants funds for student loans available immediately
Gov. Togiola Tulafono wants the more than half a million dollars in the student loan program revolving fund held by the Development Bank of American Samoa made available right away for students who want to make loans for their college education.
It was during FY 2013 Fono joint budget hearings that the amount of money in the revolving loan fund was first revealed by Rep. Lemapu Suiaunoa Talo, who said that based on the DBAS report there is about $600,000 in this revolving fund, which are payments from students who were recipients of student loan programs, overseen by the Scholarship Fund board, while the revolving fund is administered by DBAS.
However, the question of what to do with this $600,000 could not be answered because Scholarship Fund board chairman Rev. Ned Ripley didn’t attend the hearing, due to the fact he was off island for medical reasons.
On his weekend radio program, the governor said he has authorized the DBAS and the Scholarship Fund board to use the close to half a million dollars or more for students seeking loans to attend college.
Togiola explained that students who attend schools of higher education, on a student loan, repay it to the DBAS under terms and conditions set by the bank. He said this program has grown, but he has recently learned that money collected from these loan repayments is not being made available to other students who have sought assistance through this program.
He said this resulted in concern from parents, who want to send their children off island for college but their request have been denied.
Togiola says he is not sure as to who gave direction to hold on to this money instead of making it available for other students for education loans. Togiola says he has written to the DBAS and scholarship board chairman to make these funds available for loans by students, and said any parent whose request for a student loan has been denied due to the lack of funds, should know that he has said to make this money available. He added that the government is making annual cash infusion through the budget process for the loan program.
He said the students can make the loan and upon graduation return home to pay it back into this revolving account. Togiola acknowledged there have been problems encountered by the bank with repayment of the loan money — as some students have entered the workforce but not bothered to repay their loan.
To the students who received a loan, the governor said these are public funds — from taxpayers — and the loan program was set up to help American Samoa students who do not qualify for a government scholarship or other financial assistance.
He appealed to the recipients of the student loan program to repay their loans so there is sufficient money in the fund for other students wanting this assistance.
He says the government is not making this a difficult task for parents and students, but added that other students should also benefit and urged parents to work together with the government on this important issue.
BUDGET HEARING — THE PURPOSE OF THE SCHOLARSHIP FUND
During the budget hearings several lawmakers suggested that DOE officials along with Scholarship Fund office staff, Luisa Sunia, be excused because the main person who should be the one to answer the many questions about the scholarship and loan programs was off island.
However, there were still questions posed to Sunia, who was informed by Sen. Galeai Tu’ufuli that the basic criteria of this loan program is to provide financial assistance to students from low-income families and students who have C averages.
However, Sunia said the regulations which have been in place from the beginning of the loan program is that students who have a grade point average (GPA) of 3.0 and up qualify for the loan program, but Galeai fired back telling the witness and the scholarship board to go back and read the law and regulations governing the loan program.
Sunia, however, insisted that nothing has changed from the beginning and it has always been 3.0 and up. Galeai replied telling the scholarship board to revisit the law and read it correctly and reiterated that the loan program was also to help students from low-income families.
He also pointed out that the law states that the board has the power to exempt a student from repaying the loan, if the student returns to work for the government for a certain period of time. Galeai also says he has heard there is a lot more money now in the revolving student loan fund, but the question is — what is the board going to do with that money — use it for more students to get loans, or other purposes?
Sunia said the agreement for payment of loans is that when a graduate returns to work for ASG, the first year is waived from making payments and in the student's second year of working in government they would start paying the loan. And after two years, whether the student is working in ASG or private sector, 50% of the loan is forgiven.
It was revealed during the hearing that about 29 students in their fourth year of college are under the student loan program and there are 27 of them in their third year in college, for the new fiscal year, with each full time student per semester given $4,000, which is $8,000 a year.
Lemapu and Sen. Alo Dr. Paul Stevenson are members of the Scholarship board from the Fono. The two lawmakers are chairmen of the Senate and House education committees. And their names were mentioned briefly during the hearing as board members.
Alo said he, like Lemapu, are in the dark about the board of directors and its work, adding that some board members have yet to be confirmed by the Fono and some whose decisions are made, as members of the board, are not in accordance with the law.
He said it's been a year since he has been called to a board meeting and didn’t know if there had been any meetings, or who is making decisions on the scholarship board. He agreed with his House and Senate colleagues for the Fono to set a separate times and dates to hear directly from the board chairman.
Several reports were requested from the Scholarship Office and among those reports is a complete audit of the student loan program and how many students used this program, how many of them have since graduated, and how many have repaid their loans.