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Rethinking Scholarships in Cambodia
By Barry Sutherland, Director International School Phnom Penh, barry sutherland@ispp.edu.kh International School Phnom Penh (ISPP) has a long-established scholarship program with selection intended as a combination of merit and needs-based. Students would be tested on the merit side as early as Gr.2 and parents would complete a declaration regarding the needs side. These scholarships were offered to one lucky elementary child in alternate years anywhere between Gr. 2 and Gr. 5. The day things changed for me was when I was informed that our latest scholarship recipient would be late enrolling for school because their family was currently on a vacation in Europe. We honored our agreement, but decided it was time to review our scholarship program with a view to providing opportunities for very poor students – the ones most international schools choose not to serve. What came next was inspiring, impactful and painful. But first you need to understand how we funded the new scholarship program. Backstory ISPP has suffered a bit of financial trauma over the past 10 years to say the least. In 2007, the Board had signed over $3 million dollars to a local developer who, after the 2008 global financial market crash, could not deliver land for a new school. I arrived in 2009 and was tasked with retrieving the $3 million plus finding new land to buy and build a school upon. In 2011, the school was embroiled in a lawsuit over another failed land deal in which the developer was unwilling to release $2.5 million dollars of the school’s money held in escrow. This little fight was my responsibility for following only the first half of the golden rule: trust, but verify. In spite of these challenges, the school purchased land and began to build its current campus in 2012. The problem was there was no money to build it. Banks, as rule, do not seek to lend to schools because no one wants 30 EARCOS Triannual Journal
to foreclose on a school (even bankers). As such, we had a difficult time getting a loan, but eventually a local bank took a chance on us with a $20 million construction loan at a very high variable rate. We were grateful to get a loan at any rate. The new campus was completed in 2015 and the bank had already tried to raise the interest rate once (bankers; sigh) as was their right. We immediately contacted the Overseas Private Investment Corporation (OPIC) in Washington as we had built a relationship with the OPIC Team since 2011, when I asked them to finance the construction. They said they would like to help but that with congressional approval taking a long time and the fact that our clients were wealthy, they said we had better go for private financing. Flash forward to 2016 and I contacted OPIC again and proposed that they buy out our construction loan as a social development loan. The social development aspect is that I promised to plough all of the savings from a low-interest, long tenure fixed OPIC loan into a new type of scholarship program. The savings to our ISPP will be $2.3 million dollars over 15 years – more than enough to support a long term ISPP scholarship program for children from very impoverished families. While it has taken two years to negotiate and perfect the buyout loan, it has been worth it because in August 2018, six very poor children joined ISPP on 7-year scholarships that start in Gr. 6 and ending with their IB Diploma in 2025. How did we gauge the level of need? When we proposed to serve very poor children, we knew this was always going to be the biggest challenge. Given the nature of the family structure in SE Asia, we knew that if we could provide an ISPP education and eventually an IB Diploma we could not only pull that child out of poverty, but we would potentially pull up the whole
