Govt provided over $9.4B for student loans from 1994-2015

first_imgUG Loan Agency auditThe recent forensic audit into the operations of the University of Guyana (UG) Student Loan Agency hasThe Student Loan Agency at the University of Guyana Turkeyen Campusrevealed that over a 21-year period, successive People’s Progressive Party/Civic (PPP/C) governments made available to the agency over $9 billion.During the period 1994 to May 2015, the Government of Guyana approved $9,489,453,973 through the National Budget or US$45.5 million (using the current rate of exchange of G$210 to US$1), the 77-page audit report, which was made public on Tuesday by the Finance Ministry stated.The report stated that during the period April 2011 to December 2014, $1.8 billion was received through a process whereby the Agency’s head is informed by the Budget Department that funds have been approved to be released to the Agency.The Agency head then, at least twice per year, requests disbursements equivalent to the approved amount which were then deposited, awaiting request from the University and upon request, the Agency head seeks approval from the Finance Secretary for the requests to be fulfilled.It noted that there was no receipt of funds from the Government in 2015. “Loans issued during the audit period (academic years 2011-2012 to 2014-2015) amounted to $1,581,422,277 of which $1,432,669,005 was issued to students at Turkeyen Campus and $148,753,272 was issued to students at the Tain Campus,” the report stated. It further stated that as at December 31, 2014, some 25,335 students received loans with a total value of $9,159,644,463. Of the 25,335 students who have received loans, 4713 or 18.6 per cent are recent graduates or are still students, 1776 or seven per cent have repaid their loans totalling $679,918,794, including principal and interest. Five had their loans written off, 1278 or five per cent have been paying but not all are up-to-date and 17,56l or 69.4 per cent of the loan portfolio are deemed delinquent because they have not being honouring their indebtedness, according to the audit report.“This is a clear indication that the Ministry of Finance, and by extension the Agency, has not pursued the defaulters with a view to recover their indebtedness. The Agency head confirmed that his department is not equipped to pursue defaulters,” the auditors stated in the report.Several high ranking politicians and legal practitioners are among the over 17,500 defaulters.They include former Leader of the People’s National Congress Reform (PNCR) Robert Corbin, People’s Progressive Party Central Committee member Majeed Hussain, Magistrate Judy Latchman, former A Partnership for National Unity Member of Parliament (MP) James Bond, Legal Adviser in the Ministry of the Presidency Geeta Chandan-Edmond and daughter of Prime Minister Moses Nagamootoo Adela Nagamootoo.The loans approved and issued during the period was $9,159,644,463. This amount represents 96.5 per cent of the total Government contributions received by the Agency. The auditors have recommended sweeping changes at the Agency to address the issue of defaulting loans.Included among those recommendations is preventing students who owe the agency from traveling overseas unless systems are in place to guarantee the recovery of the outstanding balances, should the student fail to return to the country.“Consideration should be given to endorse the passport of students so that they cannot leave the country without making provision to repay their loans if they fail to return. Or students should not be allowed to travel abroad unless the guarantors undertake to repay the loan in full and immediately, if the students do not return,” the auditors suggested.It was also recommended that the format and security for the issuance of loans must be reviewed to strengthen the existing systems and to put in place mechanism for the prompt repayment of loans, the auditors noted, adding that the student loan form should include the name of an alternative guarantor in the event of the death of the guarantor. That person should give a written commitment annually.“The criteria for the issuing of student loans should also be reviewed to ensure that only Guyanese are eligible instead of those holding national ID cards,” it stated.The auditors also recommended that students should be made to start repayment on or before the one year grace period once they would have been employed.last_img read more