Govt considering waiving interest on outstanding UG student loans

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Minister of Natural Resources, Raphael Trotman, today, revealed that Government is considering the possibility of waiving the interest on outstanding loans by students of the University of Guyana (UG).

“We are hoping that we can be generous in the jubilee year of independence, so there are considerations … for passing, excusing or not insisting on payments,” Minister Trotman told media operatives at the post-Cabinet press briefing at the Ministry of the Presidency, today.

Minister of Natural Resources Raphael Trotman
Minister of Natural Resources Raphael Trotman

A recent forensic audit into the Ministry of Finance’s Student Loan Agency (SLA) revealed that from 1994 to May 2015, some 17,567 or 69.4% of 25,335 student loans were deemed delinquent because students were not honouring their indebtedness. The audit report contained names of 488 persons who were deemed ‘delinquent’ in the loans. 

A subcommittee was setup to examine the recommendations from the audit report on the loan agency.  Minister Trotman explained that the audit report made a number of recommendations to recover outstanding balances on loans. The subcommittee recommended a review of the organisational structure and business processes to make it compliant with auditing and accounting frameworks, he said.

Further, the Minister noted that the report made a number of other recommendations on short and medium-term measures to streamline the agency, and to set clear conditions for loan applications and repayments.

The audit report had indicated that the previous Administration had approved $9,489,453,973 or US$45.5M through the National Budget, for student loans. 

According to the report, during the period from April 2011 to December 2014, $1,800,000,000 (US$8,571,429) was received through a process whereby the Agency Head was informed by the Budget Department that funds had been approved to be released to the agency.

Loans issued during the audit period (academic years 2011-2012 to 2014-2015) amounted to $1,581,422,277 of which $1,432,669,005 was issued to students at the Turkeyen Campus, and $148,753,272 to students at the Tain Campus, Berbice.

 The total number of students who would have obtained loans up to December 31, 2014 was 25,335. Of the total number of students who received, 4,713 or 18 percent are recent graduates or are still students. The number that was able to repay was 1,776 or 7% with a  total of $679,918,794.

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