Guarantor Free Loan For Tertiary Students

Guarantor Free Loan For Tertiary Students

Higher education globally and specifically in Ghana has become increasingly important not only to states but also individuals. It has the propensity to transform the lives of individuals and spur economic growth of countries. 

Despite the importance tertiary education plays in the lives of individuals and country at large, the cost of education for states and individuals is high especially in developing countries with both struggling to afford it without making a trade off. 

Government of Ghana in addressing the financial challenges for tertiary students introduced the

Student Loan Scheme. The Students Loan Trust Fund (SLTF) was established in December 2005 under the Trustee Incorporation Act 1962, Act 820. The Scheme is administered by the Social Security & National Insurance Trust on behalf of the Government of Ghana. The Students Loan Scheme is a financial arrangement under which Ghanaian Students enrolled and pursuing approved courses in tertiary institutions in Ghana are granted loans to assist with the financing of their education. 

The scheme has undergone several changes just to make it better for students. For instance, on page 112 of the 2016 NPP manifesto, the party posited that “we will also abolish the payment of utility bills by students. We will also increase the amount of loans under the Student Loan Scheme and restructure to streamline its administration to enhance recovery of the loans”. All these have been realised. In 2018, the government announced a 50 percent increase in the loan accessed by students. Hitherto, the minimum amount given to beneficiaries was GHȼ 1,000 and it was capped at GHȼ2,000, which was directly linked to course specifications, technical requirements, and needs assessment. The government subsequently increased the minimum amount to GHȼ1,500 and and capped it GHȼ3000.

Essentially, the loan is meant to supplement the students own private resources, such as the financial support parents already give them. The loan level to be granted in each academic year is determined by Government in consultation with Tertiary Students’ Representatives and SSNIT. The scheme serves as a cushion for the poor. 

However, an applicant needs two guarantors before he/she can access this loan. This, sometimes becomes very difficult for the poor for which such policies exist for as guarantors guarantee using their pension funds. This coupled with the fact that more students including those who benefited from the Free SHS policy will be going to tertiary institutions, it would soon reach a time majority of students will not be able to get guarantors.

At page 154 of the 2020 manifesto of the NPP, it explains. that make sure no student who has obtained admission to a tertiary institution is denied access because they are unable to pay fees. Government intends to provide all such students, with the exception of teacher and nurse trainees who are paid allowances, an option to obtain a student loan: without the requirement of a guarantor for the loan, provided he or she has a National Identification Number from the GhanaCard, and defer repayment of the loan after National Service plus an additional one-year grace period.

This will be a great relief for students especially those from the poor background. This promise is in line with the government’s policy framework of not making financial challenges being an impediment for students.  At a ceremony at the West Africa Senior High School to launch the Free SHS policy, President Akufo-Addo revealed that he made the Free SHS pledge “because I know that knowledge and talent are not for the rich and privileged alone, and that free education widens the gates of opportunities to every child, especially those whose talents are arrested because of poverty.” This is the underlying reason the guarantor system, which serves as impediment for many students is being removed. 

This policy when implemented, will bring a lot of reliefs and reduce the burden most students and families go through in accessing tertiary education.

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