THE Finance Ministry has been advised to implement a system that will allow students to repay their loans through commercial banks or their employers.This proposal was made by HLB, R. Seebarran and Company, and forms part of a list of 24 recommendations made following the conduct of a forensic audit into the operations of the University of Guyana Student Loan Agency.
According to the audit report, close to 70% of the students who would have benefited from loans are still to repay the government.

DELINQUENT BENEFICIARIES

From 1994 to May 2015, the government had approved $9.4B through the National Budget or US$45.5M using the current rate of exchange of G$210 to US$1. Up to the end of December 2014, 25,335 students had obtained loans with a total value of $9.1B. Of the total number of students who have received loans 4,713 or 18.6% are recent graduates or are still students, 1,776 or 7% have repaid their loans totalling $679,918,794 including principal and interest. It therefore means that 17,56l or 69.4% of the beneficiaries are delinquent due to their failure to repay their loans.

DEDUCTIONS
In order to remedy the situation, auditors have recommended that the sums owed be deducted out of the accounts and salaries of students. “Students should be made to have their loans repaid through the banks or employers…This will ensure that repayments are made on time,” the auditors explained.

The Finance Ministry has also been advised to have formal letters sent to students reminding them of their obligations to repay their loans. Failing this,legal proceedings should be instituted, the auditors recommended.

“Where students cannot be located or have failed to respond to written and oral communication, the guarantors should be pursued. [Additionally], the Ministry of Finance should include on its website a page referred to as the ‘Student Loan Agency’ and include the names of the defaulters.” These were among other recommendations made to the Ministry of Finance to be implemented by the Loan Agency.

OVERSIGHT BOARD
Another key recommendation, put to Ministry by the auditors, is the appointment of an oversight Board of Trustees to overlook the operations of the Student Loan Agency. This board should include a secretary and approximately six trustees with representatives from the minister’s office, the Bursary and the Student Society, in addition to an attorney-at-Law and a qualified accountant.
“The trustees should approve governance practices and…meet monthly to ensure that the agency is managed effectively and efficiently. Further, they should ensure that student loans are disbursed consistently with improved policies and procedures and recovered on a timely basis,” the auditors added.
The Student Loan Agency was established in 1995 to manage the Student Loan Account.