Updated: Govt studying how to get more money for student loans due to hike in tuition fees

Last Updated on Wednesday, 13 August 2014, 22:19 by GxMedia

Finance Minister, Dr. Ashni Singh on Wednesday said the delay in giving green-light to the Student Loan Agency to begin processing applications for tuition fees was linked to the need for more money because of an unforeseen hike in fees.

He said Cabinet was studying the implications of the decision by UG’s Council to increase tuition fees from the 2014- 2015 Academic Year.

While the Finance Ministry has released the GUY$225 million for this academic year but with the increase in fees, that amount is insufficient. Indications are that government would have to seek approval from the opposition-controlled National Assembly to bridge the gap. The initial amount, which was lumped with other expenses, was voted down by the opposition to zero but later restored by the Finance Minister from the Consolidated Fund and taken back to the House for approval in a GUY$4.5 billion Statement of Excesses for that and other disapproved expenditures.

The cost of tuition from the 2014-2015 academic year has moved from GUY$127,000 per academic year to GUY$160,000 for new students and GUY$130,000 for continuing students. The Miscellaneous Fee has been replaced by a Facilities Fee of GUY$50,000 per academic year.

Dr. Singh told Demerara Waves Online News that government “did not anticipate an increase in student fees and the opposition cut that allocation in its entirety from the budget.”

Reacting specifically to warnings by UG Vice Chancellor, Professor Jacob Opadeyi that the country’s publicly funded tertiary institution would have to close its doors if the student loans were not released,  the Finance Minister called those utterances “wild and reckless.” “Instead of making wild and reckless threats, the Vice Chancellor should be well advised to ask the opposition why they cut the tuition fees from the budget and whether they will support its restoration and increase,” he said

Opadeyi earlier Wednesday warned that no cash from the loan scheme could force the closure of the tertiary institution.

Opadeyi said that up to 1:30 PM Wednesday officials of the Student Loan Office advised that they were awaiting green-light from the Finance Ministry.

At least 40 percent of UG’s students depend on government loans to pay tuition fees. Asked what the options were if the loan system was not reactivated, the Vice Chancellor said “the Plan B is very simple. We will not offer…we’ll close down the university for the year because if we have no student who can pay fees then we will have no students to teach and then we will have the liability of lecturers that have to receive payment every month so it might be useful for us to shut down for six months or three months until when those funding can be made available,” he said.

UG’s current debt amounts to GUY$450 million. Security costs the institution GUY$11 million.

Opadeyi dismissed suggestions that the Finance Ministry’s failure so far to give the green-light was due to the refusal by government to approve the decision by UG’s Council to hike the tuition fees for the first time since 1994.

The Vice Chancellor noted that the government, ruling party and the opposition were among those represented on the Council which is, by law, the governing authority of the largely autonomous educational institution.