Mr. Rabuka should keep TELS and improve the scheme by covering its loopholes

5 January 2023

On 8 December 2022, the quoted Mr. Rabuka—

“A People’s Alliance government will cancel debts over half billion dollars in students’ loans to pay for their higher education.”[1]

First of all, let’s take into consideration that there is no People’s Alliance government in place but a coalition government comprising three political parties as you already know. Any attempt by Mr. Rabuka to waive Tertiary Education Loans Scheme (“TELS”) loans must receive the support of his coalition partners.

Way before the 2022 General Elections, SODELPA had already made the call to waive TELS loans.[2]

Now, Mr. Rabuka is vested with the responsibility to persuade the National Federation Party to support this waiver policy. Taking into consideration that the National Federation Party is led by Professor Biman Prasad, who happens to be an economist and the Minister of Finance, and who clearly understands the impact this waiver policy can have on the Fijian economy, it may be a challenging task for Mr. Rabuka to convince Professor Prasad. But who knows, may be Professor Prasad is an easy bride

Let’s take into perspective a few important things under TELS.

Fijian students who want to pursue tertiary education take loan under TELS. This loan scheme is administered by the Tertiary Scholarships and Loans Services (“TSLS”) which is governed by the Tertiary Scholarship and Loans Act 2014.

After completing studies, when the student secures a job, he or she starts repaying the loan. The money recovered from loan repayments is re-invested in Fiji’s education sector. On this principle, I think TELS is a very functional scheme.

Last year, the TSLS Chief Executive Officer, Mr. Hasmukh Lal stated that as of 31st May 2022, taxpayers had invested $603 million in TELS. Out of that, total recovery was around $23 million and total due was $571 million. He stated that out of $571 million outstanding, $347 million was collectable.[3] This means it is possible to return $347 million to Fiji’s economy which can be re-invested in Fiji’s education sector.

I think Mr. Rabuka should keep TELS and improve the scheme by covering its loopholes.

For example—

  1. In addition to the repayment options already in place, diversifying repayment options for students who want to travel abroad for employment or for further studies to travel under a self-guarantor system with a customized passport.
  2. Enabling TELS to cover for postgraduate and Master’s degree studies and doctorate degree studies for students who have already graduated with bachelor’s degrees and regardless whether such students have paid or have started paying for their TELS loans.
  3. Diversifying subsidy options for faster repayments.
  4. Providing tax rebate options for companies which want to help their employees under TELS loans or in general, other students who are under TELS loans in the repayment of their loans.
  5. Making measures more stringent for students who have secured proper employment are able to pay their loans.

In a dysfunctional system, the government will give out loans to the public and later write-off the loan.

By waiving about $571 million loans under TELS, taxpayers will either loose on their hard-earned money or be burdened with additional taxes on good and services that Mr. Rabuka’s government can levy on taxpayers to generate funds to cover the new costs that will arise due to the waiver of TELS loans.

It is a usual thing under Mr. Rabuka’s governance that people take loan and not pay if off and Mr. Rabuka goes on to cover from those people at the cost of the rest of the taxpayers.

Under Mr. Rabuka’s leadership in 1995, the entire National Bank of Fiji collapsed which burdened the Fijian economy with approximately $1 billion dollars in additional costs.[4]

God bless Fiji.

Left Salute!


Sincerely yours,