The Finance Ministry has unveiled plans to recover unpaid student loans at the University of Guyana along with a list of new requirements when it comes to accessing loans from the educational institution.
“It is indeed derelict in our duty as a government if we allow hard earned tax payers money to be frittered away in high delinquent rates and low recovery ratios” Finance Minister, Winston Jordon said on Friday. He was at the time addressing persons at the opening of the Student Loan Agency.
26.5 million dollars was spent for the construction and furnishing of the new Student Loan Agency which was commissioned today at the University of Guyana, Turkeyen Campus.
In keeping with the mandate to strengthen the work of the Student Loan Agency there will be some immediate changes to the status quo the Minister outlined.
He noted that “Loans will be given only to Guyanese students, residents in Guyana for 180 days continuously within a calendar year. Student borrowers must be holders of Guyana passports.”
Jordan said Cabinet has agreed that “All information on borrowers will be eventually put at all immigration points and we will also set up a desk at the same time for those who will be stopped from travelling to make the necessary arrangements or payment prior to departure.”
He added the borrowers who wish to switch from one program to another must now pay off the full sum of all outstanding loans before accessing a new loan, noting that letters of notifications are to be sent to borrowers informing of their balances.
“These will be sent one month after the loan is issued. In the event of a failure to respond positively by the borrowers, after a reasonable period has elapsed…the government will exercise all options to recover the debt including litigation. Where students cannot be located or have failed to respond to written and oral communication, the student loan agency will send communication to the guarantors,” Jordan pointed out.
Guarantors will also now be required to produce liability statements or reports from the credit bureau.
Additionally, once students have secured employment, they will now be required to start payment on or before the one year grace period.
However the Minister said “consideration will be given to a scheme wherein a borrower who serves continuously for five years, after graduation in designated areas away from his or her normal place of residence (e.g. a borrower normally resident in region four serving in regions 1, 2, 7, 8, 9 or 10 can have the entire balance written off at the end of the five-year period.”
Since 1994 the Guyana government has pumped 9.5 billion dollars into the University of Guyana Student loan agency.
As of May this year over 26 thousand loans have been issued but the repayment of such loans amounts to just over one billion dollars with instalments due at 5.7 billion dollars said the Minister.
