SSNIT to scrap students loans

...... only ?3bn out of ?300bn paid back
A minister of state in charge of Education, Youth and Sports, Alhaji Rashid Bawa, last week said the government was committed to instituting bursaries and scholarships for students, particularly the poor and needy ones to enable them complete their education.

Speaking at a two-day workshop on the ‘Final report of the students’ loan scheme company’ at Elmina, he hinted that the authorities would assist students in tertiary institutions to enhance quality education in the country.

The workshop, which was being organised by National Union Of Ghana Students (NUGS), was to make vital input for the draft report of the students’ loan scheme company.

The minister of state said the government had studied the report and noted that out of the 537 billion cedis made up of 236 billion cedis that was disbursed as loans by the Trust, 301 billion accrued as interest and only 3.9 billion cedis had been recovered by December 2001.

“Government has therefore come to the conclusion that the loan scheme in this form is unsustainable and can only jeopardize the future of the Social Security and National Insurance Trust (SSNIT) pension scheme,” he added.

Alhaji Bawa said the government was urgently seeking support of individuals and organisations to establish a sustainable, effective and efficient scheme, to avert the annual problems students faced in acquiring loans.

Mr. Kwame Pianim, an economic consultant, said the current students’ loan scheme, by which guarantors’ social safety network was being used to repay defaulting loans, was undermining the network system.

On the GETFund, he said the only way to ensure its sustainability was to ‘levy an interest rate’ that was abreast with inflation, adding that the sustainability of future schemes should not be made dependent on subsidized interest rates.

Mr. Panim suggested that the fund should be transformed into a venture that would form seed money for operating a national students loan scheme.

Mr. Ras Boateng, deputy director general of SSNIT, said students who benefited from the scheme since its inception owed a total amount of 500 billion cedis while the government had an outstanding interest of 315.8 billion cedis to pay to SSNIT.

He said a total of 90.6 billion cedis were disbursed to 58,523 students in the 2001/2002 academic year and a projected 120 billion cedis were earmarked for the next academic year.

Mr. Fosuaba Banahene said as at December 2002, a total of 500 billion cedis had been spent on projects in the universities and pre-tertiary institutions.

Mr. Edward Boamah, president of NUGS, commended government for setting up a committee to come up with a more efficient students’ loan scheme, and suggested an increase of the current loan from 2 million cedis to about 5 million in view of the economic challenges of the country. -