The waiving of interest on outstanding loan payments for former students of the University of Guyana may be among the considerations being looked at by government in a bid to ensure repayment.
This is according to Minister of Natural Resources Raphael Trotman, who told reporters at a post-Cabinet press briefing yesterday that Cabinet received a report of the sub-committee set up to examine the forensic audit report on the Student Loan Agency.
“We are hoping that we can be generous in the jubilee year… to students and waive interest and so forth. So, there are considerations for passing or excusing or not insisting on payments for some things but I would prefer the Minister of Finance to make those announcements,” he said.
He indicated that the Minister of Finance informed that the subcommittee recommended a review of the organisational structure and business processes of the agency to make it compliant with auditing and accounting frameworks. He said that the subcommittee also made a number of recommendations that would enable the agency to recover outstanding balances on loans.
Also included in the report, Trotman said, were a number of recommendations of short- and medium-term measures “to streamline the agency and set clear conditions for loan applications guarantees and repayment.”
Asked about the recommendations, Trotman refrained from stating them because Cabinet had agreed that the Minister of Finance will host a press conference at which he would reveal same. He only hinted that the waiving of the interest may be among them.
He later acknowledged that there are “high profile persons” on the list of defaulters but said that before they reached that status they were students. “I believe that we are not looking at the profile they hold now, we are looking at the fact that they were once students of the institution known as the University of Guyana and should be treated fairly and equally,” he said, while assuring that their status would have no bearing on the possible waiving of interest on outstanding sums. “The point is not to waive interest for any individual but to look across the board and see how we can, in our jubilee year, make an offer to the students,” he added.
Almost 70% of those who obtained government loans to attend the UG are delinquent in repaying their loans, which amounts to billions of dollars, and among these are prominent members of society including magistrates and lawyers.
“It appears that many of these individuals are still around and should be pursued to have them settled their indebtedness,” the audit report by accounting firm HLB, R. Seebarran & Co has recommended. The firm conducted the forensic audit into the UG Student Loan Agency for the period December, 2011 to May, 2015.
In its report, submitted to Minister of Finance Winston Jordan in September, it highlighted the billions owed and urged a number of changes. It revealed that since the beginning of the programme, 25,335 students had obtained loans up to December 31, 2014. The total value of the loans was $9.1 billion. During the period 1994 to May 2015, the Government of Guyana approved $9.4 billion through the National Budget for the loan agency with $1.8 billion received by the agency during the period April 2011 to December 2014.
The report revealed that of the total number of students who have received loans, 17,561 or 69.4% of the loan portfolio are deemed delinquent because they have not been honouring their indebtedness.
The principal outstanding at December 31, 2014 was $8.2 billion while installments due including interest at December 31, 2014 was $5.4 billion. Total repayments including interest over the life of the Agency was $1.4 billion.
The report revealed that just 1,776 persons or 7% have repaid their loans totaling $679,918,794 including principal and interest while 4,713 persons or 18.6% are recent graduates or are still students. Five persons had their loans written off and 1,278 persons or 5% have been paying but not all are up-to-date.
