DR. Ashni Singh made history this week with a stunning announcement; an $11 billion loan write-off for former students with at least three years of post-graduation employment.

Although an estimated 13,000 students stand to immediately benefit from the relief, everyone will eventually reap the economic windfall of his announcement in the years to come.

And this is only the first phase of the government’s promise to make post-secondary education free by 2025. For the approximately 10,000 students currently enrolled at the University of Guyana, that day can’t come soon enough.

Members of APNU+AFC should have taken a moment to applaud the announcement of the Senior Minister in the Office of the President with responsibility for Finance. Sadly, there was not even a modicum of approval from the opposition party.

A 2015 forensic audit of the University of Guyana’s Student Loan Agency showed that successive PPP/C governments had made over $9 billion available to the agency in loans over a period of 21 years (1994-2015). The 77-page report found that 69.4% of 25,335 student loans were delinquent. The PPP/C never chastised or denigrated its graduates.

Consider this, a mere 5.6 per cent of Guyanese have a post-secondary education, while the global average is closer to 7 per cent. Guyana has some catching up to do, a fact not lost on the PPP/C.

On the other hand, after coming to office in 2015, APNU+AFC pursued policies aimed at tightening the screws on graduates, proposing travel bonds to bar graduates named in the audit from visiting a foreign country. In 2015, a pro-APNU+AFC mouthpiece published the pages from the forensic audit that listed the names of students who had defaulted on their loans for no other reason than to shame them and their families. While the list shows names of graduates from families who could afford to repay their loans, the vast majority are from families that live in an economically tight jacket.

Studies in the United States have shown that students from vulnerable segments of society are more likely to default on their student loans, or take upwards of 20 years or more to repay the money they borrowed. It’s not because they are lazy, but because they often end up with lower-paying jobs, and don’t have the support of parents to lift them out of debt.

Experts who have studied the effect of student loan debt on the economy say it is similar to that of a recession. When students are strapped with large amounts of debt, it stymies the growth of businesses and suppresses consumer spending, a cornerstone of economic growth. Graduates are 11% less likely to start a new business if they are strapped with a student debt of $30,000 or more, recent studies have shown.

In advanced economies, student debt is the second largest type of household credit after a home mortgage. In 2023, the Education Data Initiative, a U.S. think tank, found that students with outstanding loan payments were 36% less likely to purchase a house. Tolani Britton, a professor who studies the economics of higher education at the University of California, Berkeley says that a college graduate is less likely to experience food insecurity.

Lift the debt and suddenly a country will start seeing its young and brightest stepping up as entrepreneurs instead of heading to the nearest exit. A report by the Economic Policy Institute in Washington D.C. suggests that student debt cancellation could improve financial stability for borrowers and lead to job creation and even more economic growth.

A recent study by the Roosevelt Institute in the United States found that cancelling student debt would increase GDP between $86 billion and $108 billion per year for a decade. Those figures would obviously be substantially less for Guyana, but the trend would nevertheless be similar.

A counter-argument that some people make is that a post-secondary education is a matter of personal choice and as such, a student’s debt is their burden to carry. Governments are not in the business of giving handouts. But for Guyana, that argument makes no sense. Post-secondary education is one of the key drivers of upward social and economic mobility, a fact not even the languorous APNU+AFC folks could deny.

The PPP/C government, on the other hand, recognizes the relationship between the knowledge capital of a nation and the long-term growth of an economy. It is for this reason that PPP/C has distributed more than 14,000 online scholarships through the Guyana Online Academy of Learning (GOAL). In the first year of GOAL’s launch, 8000 citizens applied for a range of free online programmes and over 5,000 have graduated from the program, nearly 500 with a Master’s degree.

The PPP/C government also recognises that increased education translates into an increased likelihood of civic participation, a more vigilant electorate and just maybe a more robust democratic culture.
Guyana needs more university graduates, a whole lot more than what it currently has, and by wiping out the debts of its existing graduates and eventually making post-secondary education free, our economy and our country will harvest the gains from this decision in the decades to come.