PRESENT and former students of the University of Guyana (UG) can qualify for debt write-offs and waivers on student loans if they satisfy requirements being introduced by the Government.This announcement was made by Finance Minister Winston Jordan on Friday during the commissioning of a $26.5M Student Loan Agency, which is housed in the university’s compound.

Minister Jordan said there will be a reduction of interest rates for defaulters who enter into an arrangement with the Student Loan Agency to repay the outstanding sums by August 31 and September 30 respectively.
This “Jubilee offer”, as it was described by the minister, entails a 75 per cent reduction in accumulated arrears of interest if defaulters and borrowers alike pay outstanding sums by August 31.
If, however, defaulters and borrowers are unable to repay by August 31, they can still benefit from a 50 per cent reduction in accumulated arrears of interest if they bring their accounts up-to-date by September 30 of this year.

He was, however, keen to note the following: “If, however, a borrower defaults subsequently, the interest so waived will be restored to the borrower’s account.”

Minister Jordan said that in the event defaulters fail to make payments on their outstanding accounts, guarantors will be contacted. In the future, those who will stand guarantors for borrowers will be subjected to a credit check, and a credit report will be taken from the Credit Bureau.

“Once we get the database intact, this database will be uploaded to the Credit Bureau, and students will be required to pull a credit report prior to receiving a loan,” he said.

Loans to study at UG will be granted only to local students, he clarified. Those students, he said, must be residing in Guyana for 180 continuous days within a calendar year, and must each be the holder of a valid Guyana passport.

In addition, those students who are indecisive about the programmes they intend to pursue may want to think carefully about future academic plans. This is because, if a student wishes to switch from one programme to another, that student is mandated to pay off all outstanding loans for the first programme before being allowed a loan for the second.

The Student Loan Agency has also been mandated to issue letters of notification to borrowers, informing them of their loan balances one month after a loan has been issued. Should borrowers and defaulters ignore this notice after a “reasonable period has elapsed”, Minister Jordan said, Government will exercise all options — including litigation — to recoup the debt.

Minister Jordan also revealed that students will now be required to start repayments on or before the one-year grace period has elapsed, once they have secured employment. He, however, noted that consideration will be given to a scheme where a borrower, who has served continuously in areas away from his/her normal place of residence for five years after graduation, can have the entire balance of his or her loan written off.

BARRED FROM LEAVING THE COUNTRY
Conversely, the Finance Minister announced, graduates who fail to repay loans would possibly be debarred from leaving the country.

He said, “All information on recalcitrant 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 for payment of the loan or the debt prior to (their) departure.”

Minister Jordan disclosed that a database of all defaulters will be placed at all immigration stations at the various ports of entry and exit.

Stating that Government has fulfilled its obligations to provide funds to students, the minister said there is an equal obligation on the part of the students to repay money borrowed on completion of their tuition.

The Student Loan Fund is meant to be a revolving fund, but if repayment is not a feature, this fund will soon dry up, which will result in future students being denied an opportunity to further their tertiary education, the minister clarified.
“The selfish attitude of many borrowers who are in a position to pay but who refuse to honour their obligations must not be allowed to derail the scheme… In putting in these measures, we do not want to make life hard for any student, but we will be irresponsible and derelict in our duty as a Government if we allow hard-earned tax payers money to be flittered away in high delinquent rates and low recovery ratios,” Minister Jordan added.

He remains hopeful that, with the new measures, present and future students will honour their financial obligations.