Students loan beneficiaries to increase to 60 per cent
Beneficiaries of the students’ loan are expected to increase from 10 per cent to 60 per cent when the ‘no guarantor policy’ takes off this academic year.
Currently, only about 10 per cent of eligible students in public and private tertiary institutions benefit from the loans trust fund.
However, the Chief Executive Officer of the Students Loan Trust Fund (SLTF), Nana Kwaku Agyei Yeboah, has said a survey the Fund has conducted has shown that more students were keen to access the fund if the burden of getting guarantors was removed.
“On the average, about 10 per cent of eligible students apply for the loan. The current Guaranteed Scheme was also making it difficult for them to apply for the loan.
“But in preparation for the no guarantor policy, we did a survey and it shows that about 60 per cent of eligible students are likely to access the scheme, which is a huge jump from 10 per cent to 60 per cent,” the CEO of the SLTF, Nana Kwaku Agyei Yeboah told the Daily Graphic in an interview.
The no guarantor policy is a campaign promise of the ruling New Patriotic Party (NPP) during the 2020 electioneering. It is also captured in the party’s 2020 manifesto.
During the party’s manifesto launch on August 23, 2020, the Vice-President, Dr. Mahamudu Bawumia, said: “All tertiary students except teacher and nurse trainees who will be on allowances, all tertiary students will now be able to get the option to obtain a student loan without the requirement of a guarantor."
He explained that: "The current loan scheme asks for guarantors and you know a lot of people are not willing to put their pensions on line so the students are not able to access it. So you don't need a guarantor; all you need is your national ID card (Ghana card) that is all."
Mr Yeboah indicated that the SLTF was awaiting approval from the government to begin the implementation of the no guarantor system for this academic year and explained that all borrowers would require to benefit from the fund when the policy came into effect was their Ghana card.
“We are getting ourselves in readiness for the implementation of the new policy. We have realigned our systems, for instance, upgrading the paperless application system.
“This is to enable us be ready for the anticipated 60 per cent quantum leap in number that as soon as the government gives the go-ahead,” he said.
He, thus, appealed to the public especially students to exercise patience as the government put in place the legal and institutional framework for the smooth implementation of the no guarantor scheme.
In the meantime, the SLTF CEO confirmed that the payment of students' loans were still ongoing for continuing students and advised prospective students who did not have the Ghana card to get one since that would be the requirement under the no-guarantor system.
He explained that data integration through the Ghana card will help the SLTF access more database to track borrowers.
Ahead of the implementation, Mr Yeboah also said the necessary arrangements were being put in place for a smooth take-off of the policy in this academic year.
“We are also putting systems in place to augment government’s funding. We are revamping our repayment activities. An example is the recovery month that we have set aside doing a lot of media education on the need to repay.
“We have set up platforms to make repayment easy. In the past if you were expecting people to walk to the banks to repay, most people would not,” he said.
Now, Nana Agyei-Yeboah explained that in the comfort of borrowers’ homes, payment could be effected through their mobile phones.
Moreover, he said the SLTF had intensified collection activities with the setting up of a call centre with number 302751020 for people to call in and make enquiries about repayment.
Again, the SLTF CEO said the institution had introduced a diaspora recovery initiative to “reach out to those who had taken the loans but were outside the country. We have set up platforms where people can pay through their credit cards -master or visa.”
“We are also getting students' loans ambassadors in some of the countries where you have a large population of Ghanaians so that it would help us to recover the loans. We are also collaborating with Ghana Missions abroad to help us in the collection of the loans,” he said.
In addition, Nana Agyei-Yeboah said the SLTF had engaged the Credit Reference Bureau (CRB) to help it to recover the loans, explaining that “the CRB shows how credit worthy you are and so when you default in the payment of your students loan we would send your data to the CRB and with that if you go to any financial institution to access a facility they would deny you because of defaulting in the repayment of your loans”.