Last Updated on Tuesday, 9 June 2015, 19:37 by GxMedia
The Ministry of Finance is to implement stricter measures, including blacklisting persons from travelling, to rein in “recalcitrant” beneficiaries of the Student Loan Fund.
The Fund was set up by government in 1994 to assist persons with financial constraints in acquiring a tertiary education at the University of Guyana (UG). Since then, over GUY$400 million has been put into the Fund yearly.
While its current balance is unknown, in June, 2014 it was revealed that the Fund’s total assets amounted to around GUY$8.6 billion, GUY$7.3 billion of which were receivables. In other words, there was only around GUY$1.3 billion in the Fund at that time.
This incredibly high receivables rate is the result of poor collection practices on the part of the Ministry of Finance over the years, as well as errant beneficiaries who are not required to recommence payments until a full year following graduation. Graduates are given the year because it is expected that they would have secured a job by this time. Once payments commence graduates have up to 15 years to repay their loans plus a relatively low interest. “I am saying that if somebody borrows money they have to pay it back,” said Finance Minister Winston Jordan during an interview with Demerara Waves Online News.
Jordan said that he knows that “some people are not paying because they are just recalcitrant,” but also recognised that there are “some people (who) genuinely could not pay back because they couldn’t find jobs.” Whatever their situations, he maintains, “policies need to be developed to ensure that everybody pays.”
Meanwhile, Minister within the Finance Ministry, Jaipaul Sharma, believes “that the former government and Minister blundered in” the recollection of funds.
“They went to Parliament, asked for money for Student Loans and did not justify the past recovery mechanism. When it was revealed it was very poor,” lamented Sharma in a separate interview.
“We do not know where (some of) the persons are… when persons cross borders, whenever they would return to the country there would be blacklisted from leaving until they settle their debt,” explained Sharma who said he is not sure how strong such methods were under the past administrations.
Like Jordan though, Sharma believes that “if government money was utilized for you to study you made an agreement to repay or work for the government.”
Twenty-one years have passed since the establishment of the Fund but Demerara Waves Online News is informed that many persons who borrowed money very early in the life of the have not even recommenced repayments. These include persons who have migrated as well as persons who still reside and work in Guyana.
As the fund is a revolving one, its mismanagement can affect the ability of future would-be students to access loans.
“This calls for stricter, firmer measures to be put in place,” Jordan believes, although he admits that this issue will be “secondary” to those to be executed in the first 100 days of the coalition administration.