BASSETERRE, St. Kitts, May 18, 2023 (SKNIS) – Nationals of St. Kitts and Nevis with existing student loans with the Development Bank of St. Kitts and Nevis (DBSKN) are being added to the Government’s Graduate Finance Project and will now see the interest rate on their loans reduced to five (5) percent per annum.
“I want to announce today that come June 1st, existing student loans in the Development Bank will now be reduced to five percent. I think that when we made the first announcement I said that we are going to come back and announce something else, and so students who are now paying nine (9) percent, from the 1st of June you are encouraged to go to the Development Bank and have your interest reduced from nine percent to five percent,” said Prime Minister and Minister of Finance, the Honourable Dr. Terrance Drew during his Press Conference with Cabinet Ministers today, Thursday, May 18.
The Graduate Finance Project, which was launched on April 6, 2023, initially saw the interest rate on new student loans only attained through the Development Bank reduced to five percent per annum.
Prime Minister Dr. Drew said the reduction in the interest rate will greatly benefit the graduates and afford them the opportunity to live and plan for better lives.
“This will give students space to buy a home or invest in a business so that they can get out of their parents’ home. Many of them come back from study and because of the high interest on loans and the interest they accumulated during their studies, they have to stay home until they’re 40 plus. We want that when students go to study, they can quickly transition into independent living,” Dr. Drew added.
The Graduate Finance Project also provides a grace period of four and a quarter years with a 15-year repayment term. It includes EC$15,000 credit to service the student loan during that period, which eliminates the payment of interest for four years, and three months.
“This means that if you go to Development Bank and take a loan, your parents don’t have to pay any interest for you while you are studying and as a result of that it gives your family space, and when you come back that interest will not accumulate. Before that, interest used to accumulate up to $15,000; even before you start paying back your student loan you had to clear that interest that you accumulated while you were studying if your parents were not in a position to pay it for you or you were not in a position to cover it and so that is a big relief. And also having five percent interest loans means that you will pay less monthly, and we have estimated that students will save up to $100,000 during the course of the loan repayment,” said Prime Minister Dr. Drew.