interest-free education loans.

And the Education Ministry has been forced to tighten up controls since $119,000 in loan repayments have been outstanding on the National Education Guarantee Scheme.

The scheme, implemented in 1994, saw Government guaranteeing loans at the Bank of Butterfield and the Bank of Bermuda to the tune of $3.8 million for local university students.

According to the programme, students would begin to repay the loans at the end of their schooling.

In 1996 and 1997, as the first loans were becoming due, the banks notified the Education Ministry of the arrears in payments of 15 students.

"We have put all those students in debt collection and are getting the money in,'' noted Nicole Smith, Acting Comptroller of the Ministry.

She estimated that about a quarter of the funds have already been repaid and was confident that the full amount or close to it would be collected.

"You will appreciate,'' she said, "that the students have a repayment plan so we are not collecting the full sum from them in one payment.'' Following having to fork out $119,000, the Ministry of Education put in place additional controls.

"The Banks now alert us monthly on the status of all loans and we directly contact students, ourselves, who have missed a payment,'' Mrs. Smith said.

The new controls seem to have fixed the problem, as Mrs. Smith reported that there have been no incidents of delinquency of payments since they were introduced.