Government Caps Scholarships At $35K Each

Good morning,

A bill titled the Bermuda Government Scholarships Amendment Bill 2013 was tabled in the House of Assembly earlier today.

You will recall that during the Budget Debate in March, I noted that the Government would make changes to the way in which Government Scholarships are awarded for further education.

The intent of the Bill tabled this morning is to make Bermuda Government Scholarships, also known by their acronym, the B.G.S., sustainable in the short, medium and long-term for Bermuda’s top scholars.

We propose a new regime for the Bermuda Government Scholarships, one that continues to recognise, honour and make significant financial contributions to the post-secondary education of Bermuda’s top academic achievers.

Under the proposed changes, we will institute a ceiling of $35,000 for tuition and accommodation, but provide important additional benefits by increasing the length of the Bermuda Government Scholarship for future recipients so that they can receive funding for 4 years instead of 3 years. We will also expand the age criteria to allow somewhat older and younger students to apply and receive the BGS.

During the budget debate I explained that the Ministry of Education’s budget had been reduced and that a significant area of impact was scholarships and awards.

The BGS is a very generous scholarship, but it is provided at the taxpayer’s expense and does not match the financial realities of the Ministry of Education and the Government of Bermuda.

The current BGS regime is not sustainable, nor is it fiscally manageable. The BGS regime would be challenged even during booming economic times because the monetary value of each scholarship varies depending on the school that each recipient attends.

If left unchanged, the existing provision threatens the entire provision of scholarships and awards as there would simply be no money left for existing recipients and potential BGS candidates into the future, or for other smaller financial awards that help students of financial need to attend post-secondary institutions.

The Bermuda Government Scholarships Act 2008 allows the Minister of Education to award up to 8 Bermuda Government Scholarships; this takes place based on a recommendation made by the Board of Education.

The Board vets, interviews and makes recommendations to the Minister of Education, who must not award a BGS to anyone who does not meet the standard set out by the Board of Education. This aspect of the current approach will not change.

The BGS is 3 years in duration and currently funds 100% of:

• Living expenses for accommodation and food at a rate equal to the cost of dormitory accommodation for a single student;
• a one-way airline ticket at the beginning of one’s studies; and
• a one-way airline ticket to return to Bermuda upon successful completion
• of one’s studies; and,
• it also provides recipients, the total cost of their tuition for a period of three years.

In recent years, the current scholarship package for BGS recipients has ranged from a low of $17,000 to a high of nearly $75,000 ($74,354 exactly) per school year for individual BGS recipients. The total money spent on the BGS for the 2012-2013 school year was nearly $900,000.

We believe that we must keep the costs of the BGS within budget, and legislative changes are required to make this happen.

Most scholarships are for a fixed dollar amount which allows the trustees of scholarships to manage their budgets in ways that are fiscally prudent through careful planning and administration.

The Board of Education recommends the recipients, but does not choose where they attend college or university, making it impossible to plan and budget for the cost of the BGS. A student could be attending university in a small town in England with a low cost of living and pay U.K. domestic rates, while another might attend an expensive private university in one of the most expensive cities in the world.

We therefore propose to change the scholarship from one that covers airfare, food and accommodation, and an unlimited amount of tuition to a fiscally manageable regime where accommodation and tuition are covered up to a cap of $35,000.

This will allow the Ministry of Education to better predict, plan and budget for the maximum annual cost of Bermuda Government Scholarships going forward.

It will also allow us to have the money to honour our commitment to existing BGS recipients who are covered under the current BGS Act.

Aspects of the current BGS regime reflect a much earlier time when Bermudians who were able to attend university abroad, tended to travel to the U.K. to attain 3 year degrees. In today’s day and age, many undergraduate degrees are 4 years in length. Therefore, we also propose to extend the duration of the BGS from 3 years to 4 years to coincide with the typical number of years required to earn an undergraduate university degree.

Finally, we have also proposed to expand the age eligibility to allow students who are between the ages of 16 to 25 years to apply and receive the BGS. The current allowed age range is from 17 to 23 years of age.

These changes to the BGS regime reflect the current economic times, but also acknowledge the need to be fiscally prudent at all times, whether in periods of economic boom or an improving economy.

While the newly proposed BGS regime will result in a more responsible budget and spending for the BGS, it is done for students so that important investments in education are sustainable and will benefit students for years to come.

Thank you.

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