On Thursday, 23rd September 2021, the Minister for Education, Hon. Dr Yaw Osei Adutwum revealed that the government has started the process through the cabinet to eliminate the guarantor requirement under the Student Loan Scheme. He noted this in his address to the newly sworn-in Governing Board of the Student Loan Trust Fund, SLTF.
The Student Loan Trust Fund (SLTF) was established in December 2005 under the Trustee Incorporation Act 1962, Act 820 with the main objective to provide financial resources for the second management of the Trust for the benefit of students and to help promote and facilitate the national ideals enshrined in Article 28 and 38 of the 1992 Constitution.
In fulfilment of the requirements for the application of the Loan, eligible students are to provide a guarantor who will back up the loan and assist the Trust Fund to trace defaulters when repayment is due.
This third-party relationship agreement inscribes that, the loan may be guaranteed by one of the following types of guarantors (SSNIT Contributor, Recognized Religious Body, Metropolitan, Municipal and District Assembly, or a Corporate Body).
Considering the above-mentioned, it can’t be repudiated that inadvertently, the scheme which is to inspire and unleash greater prospect especially to the deserving brilliant but needy students seems far-fetched. This could be exonerated by the survey that was conducted by the Fund which shows that, on average, about 10 per cent of eligible students apply for the loan.
The current Guaranteed Scheme is making it difficult for students to apply and become beneficiaries of this loan. Students who are coming from less privileged societies are invariably restrained by this requirement because of the unavailability of expected guarantors within their ambit. Most qualified guarantors are not willing to take risks and put their pension online for these students with the fear of been compelled to pay when borrowers default repayment.
However, ahead of the just ended 2020 general elections, the ruling New Patriotic Party made a promise to institute the “no guarantor policy” which was also captured in the party’s 2020 manifesto.
This was to help provide timely financial services to eligible Ghanaian tertiary students under the Student Loan Trust Fund and also ameliorate the debilitating situations they go through with the provision of guarantors.
H.E Dr Mahammudu Bawumia, the Vice President of the republic during the launch of the party’s manifesto on August 23rd, 2020 announced that “All tertiary students except teacher and nurse trainees who will be on allowances, will now be able to get the option to obtain a student loan without the requirement of a guarantor. So you don’t need a guarantor; all you need is your national ID card (Ghana Card) that is all.”
It is in this interest that has informed the Minister for Education to assert the government’s readiness in implementing the contractual agreement made with the good people of Ghana by ensuring the realization of the no guarantor system. When this policy comes into effect, it plainly explains that all borrowers will benefit from this loan with their Ghana Card.
Hon. Dr Yaw Osei Adutwum, as the Minister of Education, has emphatically established his commitment to refining the tertiary education system to transform the country’s fortunes. This policy which according to him is near successful implementation will not only transform tertiary education but will also give hope to the current and unborn generations as far as education remains a vital asset to every individual.
This event will overtly vindicate the dogma that the New Patriotic Party (NPP) has been the only political party and government that has the country’s education system at heart.
We have invested astronomically in the education system in this fourth republic with the introduction of some policies such as the capitation grant for school children, school feeding program, Free SHS, trainees allowance, etc, and with the elimination of the guarantor requirement under the student loan scheme, a new tertiary education is inarguably evolving very well in the correct direction under the sterling leadership of Dr Yaw Osei Adutwum.