– concerns raised over access to tertiary education
In light of the Ministry of Finance’s move to ensure that student loans are repaid, persons have become hesitant in signing on as guarantors. This situation has led to the disapproval of many student loans, which in turn prevents some students from advancing their studies at the tertiary level.
Student Loan Agency
At a post-cabinet press briefing on Thursday, Minister of State Joseph Harmon responded to concerns over students being disallowed educational advancement due to financial constraints. He explained that guarantors are indeed liable for loan payments should students neglect their obligations.
“The question of guarantors has always been there but I believe what is happening now is that the guarantors recognised that it is not that you just sign a piece of paper and you get away scotch free, that when you sign as a guarantor, if there’s any default on the part of the student is that you are liable to pay that money back,” Harmon indicated.
However, the Minister said that Government will assess the situation prospective students are facing.
Harmon explained: “I think it is something which the Student Loan Agency and the Ministry of Finance will have to look at very carefully just to ensure that it does not affect the education of our young people… it is something we’ll have to look at but the important thing is that we want our young people in school… whatever we need to do to ensure our young people are in classrooms, then we’ll have to remove any irritants.”
Meanwhile, responding to questions over students not being able to afford the loan payments, Registrar of the University, Dr Nigel Gravesande, stated that he believes that “someone must not be deprived of a tertiary education on the basis of economic considerations.”
“The facility available through the student loans facility, through the Ministry of Finance, attempts in real measure, consistent with the Act established in UG, not to have cost being an impediment to access,” Dr Gravesande opined.
A Financial Audit of UG conducted this year revealed that during the period 1994 to May 2015, the Government of Guyana approved $9,489,453,973 through the National Budget for student loans at UG. It was also noted that there was no receipt of funds from the Government in 2015.
The Audit pointed out that loans issued during the academic years 2011-2012 and 2014-2015, amounted to $1,581,422,277 of which $1,432,669,005 was issued to students at Turkeyen Campus and $148,753,272 to students at Tain Campus. It further stated that as of December 31, 2014, some 25,335 students had received loans with a total value of $9,159,644,463. Of the 25,335 students, 1776 or seven per cent repaid their loans, totalling $679,918,794, including principal and interest.
In September, government opted to grant reprieve to indebted students of the UG, by slashing accumulated arrears by as much as 75 per cent if the monies are repaid by the end of this month (October).
The Finance Ministry had noted that the extension of the waivers had been approved for those indebted, but currently, with payment schedules for their student loans, the Ministry had cautioned that “if, however, a borrower defaults, subsequently, the interest waived will be restored in full to the account.” The Ministry also indicated that borrowers whose accounts were current for at least three years at July 31, 2016 would benefit from a 50 per cent reduction on all future interest once the account does not go into arrears, but cautioned too that in this instance “if the account lapses into arrears, all interest waived will be restored.”
The reduction was recommended by the audit of the UG Student Loan Agency among other interventions, “to streamline the agency and set clear conditions for loan application guarantees and repayment.”
