The Social Security and National Insurance Trust (SSNIT) Students' Loan Scheme will be phased out at the end of the 2004/2005 academic year and be replaced with the Student Loan Trust (SLT).
Cabinet has already approved the proposal for the establishment of the SLT and it will soon forward it to Parliament when the House reconvenes for the necessary legislation to be enacted.
The Minister of State responsible for Tertiary Education, Ms Elizabeth Ohene, who said this in a press statement on Thursday, says the introduction of the national identification card would be a prerequisite for the establishment of the SLT.
She also says government has increased the SSNIT students' loan by ¢1 million from ¢2.5 million to ¢3.5 million with immediate effect.
It has, consequently, through the Ghana Education Trust Fund (GETFund), released a total of ¢69,780,060,000 to SSNIT for disbursement to cover the cost of the increment for an estimated 69,780 students in 36 public and private tertiary institutions.
“It is hoped that beneficiary students will receive the increment as soon as possible to enable them to discharge their responsibilities,” Ms Ohene says,
The ¢1 million increase represents a 40 per cent upward adjustment in the loan. The students had initially proposed a 100 per cent increment in the loan from ¢2.5 million to ¢5 million.
Nonetheless, the new figure of ¢3.5 million is expected to bring a huge financial relief to students.
The President of the National Union of Ghana Students (NUGS), Mr. Forgor Abubakari, in an interview, says he is satisfied with the increment because it was based on consensus reached during negotiations with the education authorities.
Commenting further on the establishment of the SLT, Ms Ohene assured students that everything will be done to ensure its establishment, in view of the difficulty SSNIT had had to endure in managing the students' loan scheme.
SSNIT had consistently complained that the management of the student's loan scheme had, over the years, taken a huge portfolio of its primary responsibility of managing pensions.
That concern prompted the government to find an alternative in the SLT, which will be managed by the government and, therefore, relieve SSNIT of that responsibility.
One significant feature of the proposed SLT is that students will no longer be required to present guarantors to endorse their applications for the loan before benefitting from it.
This will make the new trust more accessible, since it will save students the headache of searching for guarantors who are increasingly becoming reluctant to help students because of the fear that they will not repay the loans and as a result make it difficult for the guarantors to claim their full pension entitlements on retirement.