Nana Kwaku Agyei Yeboah — Chief Executive Officer, SLTF
Nana Kwaku Agyei Yeboah — Chief Executive Officer, SLTF

Failure to deduct loans: Students Loan Trust Fund drags 8 institutions to police

The Students Loan Trust Fund (SLTF) has dragged eight public institutions to the police over their failure to make the necessary deductions from employees’ salaries and remit them to the fund.

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The employees, numbering 98, borrowed from the fund while in school but failed to repay the loans.

Consequently, the police have since given the defaulting employers a lifeline to comply or face court action.

The Daily Graphic learnt that the institutions had already been served by the police to appear before the CID on the issue.

The first phase of the investigations saw the affected institutions being served notice on three occasions but to no avail.

The Chief Executive Officer of the SLTF, Nana Kwaku Agyei Yeboah, said his outfit was determined to recover outstanding loans to ensure that the fund continued to provide financial support to Ghanaian students seeking higher education.

"The SLTF plays a crucial role in promoting access to higher education in Ghana. It is our responsibility to protect the fund's sustainability, and this includes holding employers accountable for their actions," he said.

The Deputy Director, Repayment and Resource Mobilisation of SLTF, Rosemary Aryee, said the non-compliance of employers to deduct and pay loans on behalf of their employees had been a long-standing issue that hindered the fund’s ability to sustain the support for students who were currently in school and future generations.

“We have decided to take legal action as a last resort to ensure compliance,” she said.

Section 24 of the SLTF Act 2011 (Act 820) imposes a statutory duty on employers to deduct loan repayments from the salaries of employees who benefitted under the students’ loan scheme and remit same to the trust fund.

Students’ loan is a creature of public policy entrusted to the SLTF, an agency of government under the Students Loan Trust Fund Act 2011, Act 820.

The core mandate of the Trust Fund is to disburse loans to eligible students to cover tuition, accommodation and other educational expenses and recover same when they are due.

However, repayment has become crucial to ensure the sustainability of the fund and to financially support future generations.

The fund said the duty imposed on employers under Section 24, Act 820, was a statutory duty that required strict compliance.

Unlike contractual duty, a statutory duty does not require privity in order to discharge any obligation expected under it.

In other words, once a duty is imposed by law, the bearer does not need to be a party to any contract in order to discharge that duty. 

Effect

“The effect is that employers in Ghana do not need to be a party to a student loan contract in order to deduct students’ loan for repayments purposes.

As noted above, employers are required to deduct loan repayments from the salaries of employees who benefitted from students' loan and remit these payments to the Trust Fund,” Ms Aryee said.

However, she said that had been a challenge with some employees failing to meet their obligations by reason of employer non-compliance.

“The SLTF has therefore decided to hold such employers accountable under section 37 of Act 820 which provides to the effect that “where an employer fails to deduct and remit students loan repayments to the fund, that employer is liable and directors of that company or partners of that firm are personally liable,” Ms Aryee explained.

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