The University of Guyana (UG) Student Loan Agency was cut from this year’s budget, however the overall net effect on the university will be negated by the use of the revolving Student Loan Fund.
Minister of Finance Winston Jordan said this decision was done to give the budget an ease.
During Friday’s post cabinet briefing, Jordan said “we are not going to abandon the students,” the revolving fund will be used instead as it currently has enough money to begin revolving on its own since the inception in 1994.
Further, he said the fund currently has a balance of approximately $1 billion which came from a combination of repayments, unused balances from transfers given and accumulation of interest.
The fund would be distributed over the next two to three years to the Student Loan Agency at a rate of about $400 million per year. Jordan noted the revolving fund would revolve for the maximum of three years.
Jordan said “in the previous years the university transfers and subvention was padded with the amount that we were going to use for the Student Loan Agency.”
Under the current administration, he said the university will receive almost $900 million in addition to the $400 million from the revolving fund.
This means it would finally reach its $1 billion mark. However, the monies mentioned by the minister only cater for the Turkeyen Campus.
Vice Chancellor of UG, Professor Jacob Opadeyi said he welcomes the fact that students will not be affected by the cut of loans from the budget. However, he said his major concern is the means by which the university can make the revolving fund actually revolve and hold students accountable for the repayment of their loans.
Speaking to Stabroek News, he noted UG’s collection mechanism for loans is weak and instead he proposed the responsibility of loan collection and management be done by banks rather than the government.
He further explained that the commercial banks are better equipped for loan collection which effectively would allow for the proper functioning of the revolving fund thereby ensuring UG is not dependent on the government budget allocation each year.
The University of Guyana reopened its doors yesterday.