Government yesterday outlined proposed measures to ensure that University of Guyana (UG) students repay their loans, including barring those with outstanding debts from leaving the country.
“While the Cabinet did not agree or had a proposal put about stamping passports, all information on recalcitrant borrowers will eventually be put at all immigration points and we will set up a desk at the same time for those who would be stopped from travelling to make the necessary arrangement for payment of the loan or debt prior to departure.”
This announcement was made by Finance Minister Winston Jordan yesterday at the unveiling of the newly commissioned $26.5 million Student Loan Agency at the University’s Turkeyen campus in response to questions on the measures to ensure that defaulters repay their loans.
An audit, conducted by accounting firm HLB, R. Seebarran and Co, revealed that the delinquency rate in repayments was 70% which amounted to billions of dollars for the period December, 2011 to May, 2015.
The Finance Minister yesterday said that following concerns about the high delinquency rate revealed in the audit report, Cabinet undertook a preliminary review of the report before remitting it to a Cabinet subcommittee for further examination and recommendations.
Citing statistics, Jordan said that up to May, 2016, some 26,239 loans were granted to the tune of $9.5 billion, with repayment to date totalling $1.75 billion and installments due amounting to some $5.7 billion.
To this end, Jordan announced a number of measures to ensure that those who have been granted loans repay them upon completion of their programme, in keeping with the terms and conditions of their contracts. These include new requirements for borrowers who wish to switch from one programme to the other. “Such borrowers must first pay off the full sum of all outstanding loans before accessing a new loan,” he said.
According to Jordan, loans will only now be given to Guyanese students who have been residing in Guyana for 180 days continuously and these borrowers must be owners of a valid Guyanese passport.
He also announced a special “Jubilee” offer which will see a 75% reduction in the accumulated arrears of interest if borrowers clear indebtedness no later than August 31st, 2016. The Finance Minister also announced a 50% reduction in the accumulated interest if borrowers bring their accounts up to date by September 30th, 2016. “If, however a borrower defaults subsequently, the interest will be restored to the borrower’s account,” Jordan said.
Jordan also stressed that the government in proposing these new measures does “not want to make life difficult, we would be irresponsible in being derelict in our duties as a Government if we allow hard-earned taxpayers’ money to be frittered away in high delinquent rates and low recovery ratio.”
Borrowers will also be sent letters of notification informing them of their loan balances one month after the loan is issued, Jordan said. In the event of a failure to respond positively after a reasonable period has elapsed, he said that Government may pursue the avenue of litigation to recover the debt. If students can’t be located, Jordan said that notifications will be sent to their guarantors.
As it regards guarantors, as part of the strengthened screening process, the Finance Minister said that they will now have to provide liability statements and/or credit reports from the Credit Bureau. Additionally, students will now be required to start repayment on or before the one-year grace period, once they have secured employment.
Meanwhile, Jordan said that while the agency was temporarily housed since 1994 in a building provided by the University, the wear and tear has taken its toll. In addition, he said that the need to adequately service a growing student population in a comfortable atmosphere became an imperative whose time could no longer be postponed.
After meeting with then University of Guyana Student Society President Joshua Griffith, who implored the Government to do something about the facilities, Jordan said that he engaged in conversation with former Vice-Chancellor, Professor Jacob Opadeyi, who was immediately receptive to making a piece of land available for the construction of the building.
“(The) Project has been finally realised. Not only will the staff be in more habitable premises, the students past and present and other users of the services of the agency can be assured of a more pleasant atmosphere,” Jordan said.
Meanwhile, the $26.5 million building was touted as “taxpayers’ money well spent,” according to Jordan. “We see it as an investment that is principally aimed at benefitting the students,” he added.
