The Effectiveness of Students Loan Trust Fund in Financing Higher Education in Ghana
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Date
July 2012
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Abstract
Students Loan programmes has greatly improved the financing of high education in Ghana from its inception in the 1970s to its current state where it is being handled by an institution that has a sole mandate to award and recover the loans. This has come about as a result of criticisms of the previous schemes for poor administration, high cost, and very low recovery rates. Besides, the introduction of Students Loan Trust Fund in 2005 whereby loans are awarded based on means-based support, it has widened the scope of coverage. The objective of this study is to assess the effectiveness of SLTF so far in its role of financing higher education in Ghana. Guided by the interpretative theory, this study used both qualitative and quantitative techniques. Majority of the respondents indicated that the activities of SLTF had gone a long way in providing access to tertiary education. They asserted that the loan amount awarded is usually inadequate in financing all their educational needs. It was found that SLTF depended on only one source of funding that is GETFund, limiting its financial base even though its enabling Act offers it a number of sources from which it can seek funding. The study also revealed that the first batch of borrowers who are to repay their loan has just began to do so and SLTF has put in place a number of innovative mechanisms to facilitate this process. In addition, the issue of guarantorship that deprived a lot more students from accessing the loan has been tackled with the reduction of SSNIT guarantors from three (3) to one (1), and the diversification of guarantors to include religious bodies, corporate bodies and MMDA’s. The study has made a number of recommendations including the fact that the means testing mechanism currently adopted in disbursing loans should be further strengthened to provide a more robust system where students could not easily forge their information to manipulate the system and that continuous efforts should be made in finding new ways of encouraging borrowers to repay their loans as the Fund is a revolving one.
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A Thesis submitted to the Institute of Distance Learning, Kwame
Nkrumah University of Science and Technology, Kumasi in partial fulfillment of
the requirements for the degree of
Commonwealth Executive Masters of Business Administration,