Government to establish trust fund to issue student loans in the future

Higher Education Minister Dr. Ibrahim Hassan, on Thursday, announced plans to establish a trust fund to be used by future administrations to issue student loans.

Speaking at a press conference held at the President’s Office on Tuesday – Minister Ibrahim Hassan said that repayments from students for government-issued loans will be deposited to the trust fund, which the Ministry plans to establish as a rotating fund.

He emphasized that the trust will be utilized by future administrations to issue student loans.

“It (the fund) will be used by future administrations to issue student loans,” he said.

Therewith, he emphasized on the importance of loan repayment – as failure to repay the loans could lead to difficulties in issuing student loans in the future.

The Financial Audit Report of the Higher Education Ministry for the year 2021 released by the Auditor General’s Office recently stated that sufficient efforts were not made to recover the outstanding loan payments.

According to the audit report, the state is due MVR 2.5 billion in student loans. MVR 1.9 billion is outstanding, while MVR 186.4 million is overdue.

Deputy Higher Education Minister Ismail Zabeer, commenting on the audit report, said that the Ministry rejects the Auditor General’s Office’s claims that sufficient efforts were not made to recover the outstanding loan payments.

In this regard, he detailed that different students will commence the repayment of their loans on different dates, whereas they will also have different timeframes to settle the loan.

Denying that MVR 1.9 billion in student loans was outstanding – Zabeer said that many students who had not repaid the loans withdrawn under different educational schemes had repaid their loans under specific repayment policies after the current administration assumed office.

He also noted that the Ministry, taking note of overdue payments, has contacted the students via phone and letters seeking the payment. Following negotiations with the students, Zabeer said that repayment plans under specific policies had been drawn up in a manner that is most feasible for the student.

Zabeer also noted that efforts were underway to perfect the Ministry’s policies on seeking repayment of unsettled loans.