3.With Effect from 1 August 2017, the Following Applies

6th draft 10thNovember 2017

SUBJECT / Fiji Revenue and Customs Service
Tertiary Education and Loans Scheme(TELS) – Recovery of Debts Owedby Loan and Scholarship Recipients
DATE OF EFFECT / 1 August 2017
CONFIDENTIALITY STATUS / May be released to the public
LEGISLATIVE REFERENCE / Tertiary Scholarships and LoansAct 2014
PRACTICE COORDINATOR / Chief Auditor Debt Management
INDEX
Introduction…………………………………………………………………………………………2
Legislative Basis……………………………………………………………………………………2
Application…………………………………………………………………………………………..3
Process….……………………………………………………………………………………………..6
Attachment ………………………………………………………………………………………….6

INTRODUCTION

1.The purpose of this practice statement is to explain how student loan and bond agreements under the Tertiary Education Loans Scheme (TELS) willbe administered by the Chief Executive Officer (CEO) of the Fiji Revenue and Customs Service.

2.The TELS is a fund for qualifying Fijians who need financial support to complete higher education studies in an approved institution. For loans, financial support is granted with bond conditions including that the loan will be repaid when the recipient starts working. For scholarships, the recipient must fulfil bond conditions.

3.With effect from 1 August 2017, the following applies:

(i)any student eligible for a tertiary loan or scholarship will be required to enter into a loan or bond agreement with the CEO;

(ii) existing loan and bond agreements are also deemed to have been entered into with the CEO.

4.The CEO is responsible for -

(i)the enforcement ofexisting loan and bond conditions including those awarded under any Government loan or scholarship scheme prior to 2014.

(ii)the enforcement of existing loan and bond conditions on a guarantor for a student or former student who left the country prior to 1 August 2017;

(iii)the enforcement of existing loan and bond conditions ona guarantor for a student who has defaulted in loan or bond conditions.

5.Enforcement involves taking steps to recoverfrom a student (including former students) or a guarantor, any amount owed to the Fiji Government.

LEGISLATIVE BASIS

6.The Tertiary Scholarship and Loans Act 2014 (Act) provides the legal basis for the granting of loans and scholarships to tertiary students by the Tertiary Scholarship and Loans Board (TSLB).

7.Sections 16 to 19 of the Act, which deals with student agreements and enforcement action on students and guarantors with unfulfilled loan or bond conditions, is administered by the CEO with effect from 1 August 2017.

8.Section 18 states that the CEO can take the following recovery actions on a student or guarantor –

(a)issue a departure prohibition order (DPO) preventing the student or guarantor from leaving Fiji;

(b)arrange for deductions from a student’s salary or bank account;

(c)seize property used as security in the loan or bond agreement;

(d)take court action;

(e)report thedebt to international credit bureaus or agencies; or

(f)take any other action deemed necessary by the TLSB.

9.The Transitional provisions include the following:

-existing loan and bond agreements entered into by a student or former student are deemed to have been entered into with the CEO;

-a guarantor for a student or former student who left Fiji before 1 August 2017 continues to be responsible for the student’s unfulfilled bond conditions;

-a guarantor who is making loan repayments for a student or former student (who defaulted prior to the change) continues to be responsible for the student’s unfulfilled bond conditions.

10.There is no limitation on the number of years for recovery action on a student or his/her guarantor (Section 19).

11.Extracts from the Act are provided in the Attachments.

APPLICATION

12.Section 16 (1) and 16 (2) provides that the CEO is responsible for administration of bonds therefore will be required to:

- enter into loan or bond agreements with new approved applicants; and

- handle loan or bond agreement issues with existing students.

13.Section 16 (3) provides that once agreements are signed, the CEO has several options to ensure that students abide by the terms and conditions.

14.A student who is under a loan or bond agreement is required to provide a guarantor or guarantors if he/ she intends to leave the country for any purpose, during the term of his or her loan conditions or bond period. (Section 16 (4)). The guarantor(s) can be the existing or a new one.

15.Section 17 provides that the CEO is also responsible for facilitation and enforcement on existing scholarships (PSC, Multi-Ethnic or iTaukeischolarships) and student loans granted before 2014.

16.Where a student fails to make loan repayments or breaches any loan or bond conditions, the CEO can take a number of recovery actions on the student or where applicable, the student’s guarantor. These actions are explained below.

17.The CEO can issue a departure prohibition order (DPO) preventing the student or guarantor from leaving Fiji. The CEO also has authority to lift a DPO.

Example 1 - Student scholarship

A was awarded a student scholarship in 2013. She completed her studies in 2015 and started working in August 2016. She intends to travel overseas on 1 December 2017.
Since she has an existing bond agreement, the CEO can place a DPO.
The DPO will be lifted if A provides a guarantor.

18. The CEO can arrange for deductions from a defaulting student’s salary or bank account.

Example 2 - Student loan, student employed but no repayment arrangements

B was awarded a student loan amounting to $20,000 in 2013. She completed her studies in 2015 and started working in August 2016. She hasn’t made any repayments towards her student loan.
With effect from 1 August 2017, the CEO can arrange for the recovery of the student loan by writing to her employer or bank to deduct amounts from her pay or savings.

19.The CEO can seize property used as security in the loan or bond agreement.

Example 3 - Student loan, student employed but no repayment arrangements

X was awarded a student loan amounting to $20,000 in 2013. She completed her studies in 2015 and started working in August 2016. She hasn’t made any repayments towards her student loan. She owns a car.
With effect from 1 August 2017, the CEO can arrange for the recovery of the student loan by selling her car.

20. The CEO can also take court action, report the debt to international credit bureaus or agencies; ortake any other action deemed necessary.

21.For defaulting students, the guarantors will also be responsible for fulfilment of loan repayment or bond conditions. The recovery actions listed in paragraph 8also applies to guarantors.

Example 4 - Student loan, no repayment arrangements

Y was awarded a student loan amounting to $20,000 in 2013. She completed her studies in 2015 and has left Fiji. She hasn’t made any loan repayments.
With effect from 1 August 2017, the CEO can arrange for recovery of the loan amount from her guarantor.

Example 5 - Scholarship, student bonded

Z was awarded a multi –ethnic scholarship in 2009 amounting to $18,000, He completed his studies in 2011 and started working in February 2012. He was required to serve bond term of four years. He left Fiji in 2014 after serving for only two years.
Z will be required to pay the balance for the remaining bond term. If he does not pay it, the CEO will recoverthe amount owing from his guarantor.

22.Full clearance is granted when a loan is fully settled or a bond of service is completed.A clearance letter discharges the student from his/her obligations under the loan or scholarship scheme.

Example 6 – Scholarship, bond term fully served

C was awarded an I Taukei (formerly FAB) scholarship in 2008 amounting to $15,000. He was required to serve a bond of 3 years. He completed his studies in 2011 and started working in February 2012. He was in continuous employment till December 2016.
C will be not be required to repay any amount as the bond conditions were fulfilled during the 3 years in employment. FRCS will revoke his DPO and issue C a letter for “Full Clearance”

Example 7 –Student Loan, Loan fully repaid

D was awarded a student loan amounting to $15,000 in 2013. He managed to repay the full sum in September 2017
FRCS will revoke his DPO and issue D a letter for “Full Clearance”.

PROCESS

23.The process for signing of bond agreements will administered at the TSLB office. Bond forms can be obtained from the TSLB office and is also available on our website (

24.The TSLB will provide the CEO with information on student agreements and loan repayment records.

25.A studentwishing to travel overseas will be required to obtain clearance from the CEO.

26.To facilitate travel arrangements for bonded students required to make official trips overseas, employers should obtain clearance from the CEO.

27.Recovery action will proceed if tax records or other information is available to show that a student (or where applicable the guarantor(s)) who has not made loan repayments is financially capable of making loan repayments.

28.For enquiries, please contact any of our Customer Service Centers or onemail: or telephone:3243000.

ATTACHMENT 1

PART 3—SCHOLARSHIP AND LOANS SCHEMES

Loan and bond agreements

16.—(1) A student under a loan scheme shall be required to enter a loan agreement with the Fiji Revenue and Customs Authority.

(2) A student who has been awarded a scholarship under this Decree shall be required to enter into a bond agreement with the Fiji Revenue and Customs Authority.

(3) The loan or bond agreement under subsections (1) and (2) shall be primae facie evidence of a student’sobligation to make loan repayments or fulfil bond conditions, which shall be deemed to be an obligation in law.

(4) A student or former student as the case may be, who is under a loan or bond agreement is required to provide a guarantor or guarantors in the event he or she intends to leave the country for any purpose during the term of his or her loan conditions or bond period.

Existing scholarships and student loans

17.—(1) In this section—

“existing scholarship” means any PSC, Multi-Ethnic or iTaukei scholarship awarded to a student prior to 2014; and

“student loan” means any student loan granted to a student prior to 2014.

(2) Subject to subsection (3), any existing scholarship or student loan shall continue on the basis and conditions as when the scholarship was initially awarded or the student loan initially granted however, a guarantor is obliged to make loan repayments or fulfil bond conditions if the student or former student, as the case may be, leaves the country and defaults in loan repayment or fulfilment of bond conditions.

(3) The Fiji Revenue and Customs Authority shall be responsible for the facilitation and enforcement of existing scholarships and student loans granted.

Fulfilment of loan or bond agreement

18.—(1) The Fiji Revenue and Customs Authority shall take action on any student or guarantor of a student, who—

(a) fails to make loan repayments or partial payments thereof; or

(b) breaches or fails to fulfil any condition,required by an agreement made under section 16(1) or (2).

(2) Pursuant to subsection (1), any action taken by the Fiji Revenue and Customs Authority shall include—

(a) issuing a written notice or directive to the Director of Immigration to place a stop order on the person leaving the country;

(b) deduction from the person’s salary;

(c) acquisition of property used as security in the loan or bond agreement;

(d) taking court action;

(e) reporting to international credit bureaus or agencies; or

(f) such other action as the Board deems necessary.

(3) Pursuant to subsection (2)(a), the Fiji Revenue and Customs Authority shall issue a written notice or directive to the Director of Immigration for the prohibition or removal from prohibition, of any person under subsection (1), leaving the country.

Limitation Act

19. The Limitation Act (Cap. 35) shall not apply to the provisions of this Decree, for the recovery from any student or his or her guarantor of any repayment to the State or fulfilment of any condition, made pursuant to—

(a) an agreement under section 17(1) or (2); or

(b) terms and conditions of any existing scholarship or student loan agreement.

ATTACHMENT 2

Transitional

9.—(1) Except as provided under subsections (2) and (3), all guarantors under a bond or loan agreement prior to the commencement of this Act are deemed to have been expunged from all responsibilities and obligations under any such agreement.

(2) A person who is a guarantor for a student or former student who has left the country prior to the commencement of this Act continues as a guarantor for that person under this Act.

(3) A guarantor who is making loan repayments for a student or former student who has defaulted prior to the commencement of this Act continues his or her obligations as a guarantor under the loan or bond agreement.

(4) All loan and bond agreements entered into by a student or former student prior to the commencement of this Act are deemed to have been entered into with the Fiji Revenue and Customs Authority.”

======End of Practice Statement======

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