Govt could face billion dollar UG student loans write-off
The government is faced with a situation where it might have to write off over 50 per cent of the $2 billion dollars poured into the students' loan programme at the University of Guyana, a well-placed source indicated. This is because the student loan agreements in place between 1994 and 1997 may not be able to stand up to a legal challenge, given the high rate of default in repaying the loans by university graduates. The Student Loan Agency is expected to seek a legal opinion on the loan agreements in place prior to 1997, but this is not expected to reflect a different opinion on the soundness of the agreements crafted at that time. The University of Guyana instituted cost recovery in 1994 by establishing a revolving loan fund into which the government has put $2 billion. However, a total of $2.5 billion has been granted in loans by the loan agency, according to its accounts, and the difference cannot be reconciled to date. The government earlier this year indicated that it was considering measures to deal with the delinquency by graduates in repaying their loans. However, the only thing that has been done to date is the sending out of letters to graduates reminding them of their loan obligations. The agreements put in place by the loan agency from 1997 are believed to be adequate, but the issue of how precisely to deal with the delinquency situation has not been addressed. There is concern as well that President Bharrat Jagdeo's commitment to cancel the loans of any graduate who returns to the hinterland to provide service to the community is discriminatory and will not augur well for the repayment of loans by students.
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