The Student Loan Fund is a revolving fund and cannot be exhausted at this point in its life cycle

Dear Editor,

I have been approached by a number of people complaining or concerned about the impact of the 2014 Budget cuts on the entry of students into the University of Guyana (UG). Many students of course need and depend on student loans to fund their fees and get them through the UG degree courses.

We live in a country where conning the public is regarded by the government as being a legitimate political tool. In this instance, prospective UG students are being told that no money is available for their loans because the Parliament has refused to approve funds for students, ie Budget cuts. This refrain has then been taken up by others who should know better. The May 23 issue of ‘Peeping Tom’ entitled, ‘Blessings in disguise and collateral damage,’ for example, claimed that, “A great many students are also not likely to gain admission into the University of Guyana, since the funds for their student loans were not approved in the Budget.

“Those students will have to find the monies to pay to the University, as financing for the student loans will not be available.

“It is a painful reality, but that is the nature of politics. The opposition did not intend to cut these funds, but since they wielded the axe on financing for the Ministry of Finance, then the student loan financing became part of the collateral damage.”

That need not be the nature of politics. It is the approach of the PPP Government to politics. They take action out of keeping with the spirit of the constitution but take no responsibility for the consequences.

Money for student loans is provided from a revolving fund called the Student Loan Fund captured under one of the votes for the Ministry of Finance (MOF) in the annual Estimates. The government’s request for $450M for the Student Loan Fund in 2014 was bundled with a set of disparate requests for the MOF. These requests had little in common and nothing tied them together economically. They included Guyana’s annual contribution to the CDB and most importantly an equity contribution of $18.56B for an Amaila Hydro Project which, as far as I am aware has neither been presented to the National Assembly nor approved by it. Not surprisingly, therefore, funds for the vote were not approved by Parliament and since, inexplicably, the Student Loan Fund was part of that bundle no funds could be approved for it.

The story of the consequential unavailability of funds in 2014 for student loans voiced by government spokesmen and repeated in the article mentioned above is however utterly untrue.

Each year since 1994, ie, for the last 20 years, the Student Loan Fund has been receiving approximately $450M giving rise to a total sum in the region of $9B. Whilst loans have been extended to students, it is a revolving fund. Fifteen years after graduating, each student should have completed the repayment of the loan they received (with a very low interest rate). Since the Fund has been in existence since 1994 it should now be mature or flush with cash.

The fund is not managed by UG so UG’s financial troubles would not affect it. How then can the fund be unable to extend loans to this year’s students? The fund cannot be exhausted at this point in its life cycle simply as a result of the government’s inability to pay this year’s tranche.

It is unfortunate that a government would find it in its interest to mess with the lives of young people by suggesting that money is not available for loans. This is cynical politics. It is an obvious way of taking advantage of the ignorance and innocence of the public. The government could only make political capital out of such an obvious untruth if the public keeps silent and thereby acquiesces to this government abuse. It is unacceptable behaviour and it is time that the public lets the government know what they think about such practices.

Yours faithfully,

Carl B Greenidge

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