The Annual Amount of Student Loans Is Not Reasonable

Kofi Asare, the Executive Director of Africa Education Watch, has questioned whether the Student Loan Trust Fund (SLTF) actually has an effect on keeping talented but financially disadvantaged students from pursuing higher education.

The educationist claims that under its current configuration, the SLTF only provides students with an average of GH¢2,400 annually, although the average cost of higher education in the nation during the same time period is approximately GH¢15,000.

“The typical annual loan amount is 2,400 cedis, or 1,200 cedis every semester. He questioned if 1,200 cedis could keep someone from falling out of school, pointing out that this was particularly true given that tertiary education costs an average of 15,000 cedis per year for the humanities and 17,000 cedis or more for the sciences.

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Consequently, he implored the government to guarantee that the fund is endowed with sufficient funds to disburse a “realistic amount of money” to deserving pupils.

Mr. Asare claims that since the introduction of the “no-guarantor” policy, the funding architecture for student loans has not been examined.

The SLTF receives around 65 percent of its funding from recoveries of prior loans.

Speaking on Monday, February 19, on TV3’s Ghana Tonight broadcast, the education champion lamented the lack of several funding sources needed to continue the curriculum in the future.

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“A guarantor-free student annual loan scheme was introduced about a year and a half ago for Ghanaian students to be able to access the loan using their Ghana card, which is great,” he said, acknowledging the implementation of the no-guarantor policy.

The government aimed to increase the number of tertiary-level student loan recipients.

“The goal is to increase the student  loan availability so that financially disadvantaged students who need financial aid to pursue postsecondary education won’t be limited because a family member may not be an SSNIT contributor.

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“Sadly, we haven’t been able to supply enough money to meet the growing demand for student loans,” he said.

Mr. Asare went on to say that in 2023, only around 18,000 of the 32,000 applications were approved and given access to the students annual loan. “Even for the 18,000, they only received one semester’s tranche,” he continued.

The “no-guarantor” system was introduced in 2022 by Vice President Dr. Mahamudu Bawumia, enabling loan borrowers to submit applications without a guarantor. In the past, a guarantor could not guarantee any applicant without first making a contribution to SSNIT.