Revive the student loan scheme

The Jakarta Post reported this week that three students from Java were accepted into the Bogor Institute of Agriculture (IPB). On the surface, nothing is extraordinary about this good news -- there are thousands of other students in the country who are granted similar opportunities every year.

The three youths were the sons and a daughter of a small farmer, a retired village head and a motorcycle taxi (ojek) driver. They registered at the institute through a special program for exceptional high school students without the knowledge of their parents. They informed them only after they received their notification letters.

However, these letters of acceptance did not automatically open the door to the IPB. The students' parents could not afford to pay the about Rp 5.7 million (US$650) needed for tuition fees, accommodation and course materials.

Luckily, the private sector came to the rescue. The students' stories caught the attention of one Jakarta-based foundation and a wealthy figure who offered to pay their costs. God-willing, this support will ensure the three become the first people in their families to pursue higher education, a dream realized.

However, these three students are just the tip of the iceberg. How many talented students currently miss out on education will never be known. The government has compiled no data on the matter and dealing with this is not a listed priority at the moment. The financial crisis, which hit Indonesia in 1998 and then developed into a multi-dimensional crisis, has caused small and medium-size businesses to close and lay off their workers. These new unemployed have no option but to shift the priorities to meet basic needs, like feeding their families.

Education is expensive and many say higher education will always remain a privilege, not a right. The current system dictates that only smart youths with the proper economic resources can pursue their education at universities, especially as tuition fees continue to rise each year. But there are exceptions in life and the case of the bright students is one of them. They are a special breed -- they can be groomed as skilled workers to do research in laboratories, teach at our universities, become bureaucrats or even future leaders.

It is important that both businesses and the government set aside funds for social programs and grant scholarships to students who are interested in pursuing their studies at colleges and universities. Similar programs in the past to help needy-but- bright students should be reactivated if not widened to cover more youths.

Student loans, a scheme common in other countries, especially developed nations, is another way to help poor students finance their studies. We can learn from other countries how to raise the money required for the loans and manage and organize the repayments. The time is ripe for Indonesia to initiate this scheme as many banks -- small and big -- are over-liquid because of the high public saving rate.

Indonesia needs to increase the education and training of its human resources, including university students, in order to build a strong pool of skilled workers and technocrats to run this country in the future. The success stories of Japan, South Korea, Taiwan and Singapore -- all without natural resources -- prove the prosperity of a nation now depends more on the quality, not the quantity, of its citizens, while a large population counts for little or is a burden.

State banks provided student loans in the form of the Student Credit (KMI) scheme in the 1980s and shelved it in the 1990s because many recipients of the loans failed to pay.

However, the fact many students defaulted should have been a reason to rectify the program, not to drop it. Student debt has some positive aspects: It teaches loan recipients how to use money efficiently and responsibly if they are to pay it back later. They also learn about facing the consequences -- the law -- if they default.