- Establishment of Students Loan Scheme
- Application of Scheme
- Application for Loan
- Amount of Loan
- Interest on Loan
- Period for repayment of Loan
- Purpose of Loan
- Award of scholarship and other grant
- Responsibility for Scheme
- Loan agreement and guarantee
- Registration of a borrower and repayment by contributors
- Repayments for loan by non-contributors to the Social Security and Pensions Scheme
- Particulars to be supplied by and on behalf of borrowers
- Failure to repay the loan
- Offence by body of persons
- Repeals and amendments
In pursuance of the Provisional National Defence Council (Establishment) Proclamation 1981, this Law is hereby made
Establishment of Students Loan Scheme
1. There is hereby established a Students Loan Scheme (hereafter referred to in this Law as "the Scheme.").
Application of Scheme
2. (1) The Scheme shall apply to every Ghanaian who is enrolled as a full-time student on a course of studies in any public tertiary institution in Ghana (hereafter referred to in this Law as "an Institution").
2. (2) Notwithstanding subsection (1) of this section, the Scheme may be made applicable to such Ghanaian part-time students in public tertiary institutions as may be determined by the Secretary.
2. (3) A student to whom this Law applies may, on admission into an institution or where he is already on admission, until he completes his course of studies or leaves the institution, apply under section 3 of this Law for a loan for the purposes specified in section 7 of this Law as if the student were a person of full age, whether or not he is in fact of full age.
Application for loan
3. (1) An application for a loan under this Law shall be made to the Social Security and National Insurance Trust (hereafter in this Law referred to as "the Trust").
3. (2) The application shall be in such form and shall be accompanied by such documents as the Trust shall determine.
Amount of loan
4. The amount of loan to be granted to a student (hereafter in this Law referred to as "a borrower") under the Scheme shall be such sum as may from time to time be determined by the Trust with the approval of the Secretary.
Interest on loan
5. The rate of interest chargeable on a loan granted under section 4 of this Law shall be at the average treasury bill rate for the year except that the borrower shall pay as interest three per cent per annum on the reducing balance of the loan and the Government shall pay the remaining interest.
Period for repayment of loan
6. (1) The period for the repayment of a loan granted under this Law shall in respect of the different categories of courses of studies be determined by the Trust but shall not exceed ten years.
6. (2) A borrower shall commence repayment of the loan as soon as he is engaged in employment after the completion of his course of studies.
6. (3) For the purpose of the repayment of the recovery of a loan granted under this Law and the interest on it, a borrower shall be treated in every respect as if he were a person of full age.
Purpose of loan
7. A borrower shall apply the loan to defray personal expenses including the cost of boarding, lodging books, equipment and for such other purposes as may be necessary for his course of studies.
Award of scholarship and other grants
8. (1) The Government may in each year award Scholarships' bursaries and other grants to Ghanaian students in tertiary institutions in Ghana.
8. (2) Notwithstanding any other provision in this Law to the contrary, no person shall be eligible to apply for a loan under this Law where before his admission into a public tertiary institution or during his course of studies in the institution, he obtains a scholarship, an award, a bursary or any grant from the Government of Ghana or from any other public funded source and the amount of the Scholarship award, bursary or grant is equal to or exceeds the maximum loan payable under the Scheme at the time of the grant of the scholarship, award, bursary or grant.
Responsibility for scheme
9. (1) The Trust shall be responsible for the operation and administration of the Scheme.
9. (2) For the purposes of subsection (1) of this section the Trust may
- grant all loans under the Scheme;
- recover all loans in accordance with the provisions of this Law or any other enactment;
- enter into contracts in respect of the loans;
- take legal action to recover the loans;
- do all things necessary for or incidental to the purposes of this Law.
10. The Trust may, for the effective operation and administration of the Scheme in consultation with the Secretary, appoint committees comprising members of the Trust, non-members or both and may assign to the committees such functions as it considers necessary for the effective implementation of this Law.
Loan agreement and guarantee
11. (1) No loan shall be granted to a borrower under this Law unless the borrower enters into an agreement with the Trust for repayment of the loan in accordance with the provisions of this Law and the loan is guaranteed by three persons who are contributors to the Social Security Pensions Scheme or such persons as the Trust may approve.
11. (2) Any agreement entered into or any other instrument executed under this section shall be exempted from stamp duty.
Registration of a borrower and repayment by contributors
12. (1) Where a borrower is granted a loan under this Law he shall be registered by the Trust and shall be given a provisional social security number and a membership certificate unless the borrower has already been registered with the Trust.
12. (2) Where a borrower is employed on the completion of this course of studies and becomes a contributor to the Trust the provisional social security number issued under subsection (1) shall become his permanent Social Security Pensions Scheme number under the Social Security Law, 1991 (P.N.D.C.L. 247).
12. (3) The social security contribution made to the Trust on behalf of the registered borrower shall be applied to repay the loan unless the loan is otherwise repaid.
12. (4) The repayment of a loan shall be by monthly deductions.
12. (5) The protection against attachment of contribution provided under section 31 of the Social Security Law, 1991 (P.N.D.C.L. 247) shall not apply to a borrower who has not completed the repayment of a loan granted under this Law or to the guarantors of the borrower.
12. (6) Notwithstanding any provision to the contrary in the Social Security contribution is applied to repay a loan under this Law shall be excluded from the minimum contribution period qualification for the payment of benefits provided under section 35 of the Social Security Law, 1991 (P.N.D.C.L. 247)
Repayments of loan by non-contributors to the Social Security and Pensions Scheme
13. (1) The repayment of loans granted under this Law to a borrower who is not a contributor to the Social Security and Pensions Scheme (hereafter in this Law referred to as a "non-contributor") shall be effected by deduction monthly from the remuneration of the non-contributor
- by his employer where the non-contributor is not employed and
- where the non-contributor is self-employed by the non-contributor himself
13. (2) The deductions referred to in subsection (1) shall be remitted to the Trust within fifteen days after the deduction is made.
13. (3) If any non-contributor fails to pay any sum due and payable under the Scheme, the Trust may take legal proceedings to recover it.
13. (4) Notwithstanding anything in this Law or in any agreement, where a non-contributor without lawful excuse (proof of which shall be on him) falls in arrears with instalments of repayments for more than six consecutive months, the whole or the reminder of the loan shall become due and payable and the Trust may take legal action to recover it.
13. (5) Without prejudice to the other provisions of this section, and without prejudice to any criminal penalty that may be imposed, any employer who is required to deduct any sum from the remuneration of a non-contributor and to pay the sum to the Trust under this section may be sued by the Trust for the recovery from him of any sums which he has failed to deduct and pay.
13. (6) The rights conferred on the Trust by this section does not derogate from any other rights of the Trust.
Particulars to be supplied by and on behalf of borrowers
14. (1) The National Service Secretariat, the Public services Commission, the Ghana education Service and every similar employing body shall, as soon as practicable, furnish the Trust with particulars of the posting of any student who has been granted loan under the Scheme until the Trust notifies the body that borrower has completed repayment of the loan.
14. (2) It is the duty of a borrower to notify the Trust in writing not later than one month after he first becomes employed or after he subsequently changes his employment and until the loan is duly repaid, of the name and business address of his employer, if any, the business and residential address of the borrower, the borrowers salary and also such other particulars as the Trust may reasonably request.
14. (3) Except where the borrower is self-employed, he shall also notify his employer in writing of his obligation in respect of the loan.
14. (4) Every employer shall, within twenty-one days after receipt of the notification submit to the Trust the name and address of the employer, the name and salary of the borrower and the date of commencement of the borrower's employment with the employer.
14. (5) The Trust may be writing request an employer or any person (including a borrower) to give information in respect of the borrower which the Trust reasonably requires for the purpose of ensuring recovery of a loan granted under the Scheme and the employer or other person shall comply with the request.
Failure to repay the loan
15. A borrower who
- fails to obtain employment on completion of his course of studies or
- leaves the institution without obtaining a qualification or
- dies before repayment of the loan shall remain indebted to the Trust to the extent of any unpaid loan and the Trust may take such legal proceedings, as it considers necessary to recover the loan.
16. Any person who
- fails to deduct contribution and pay it to the Trust contrary to subsections (1) and (2) of section 14
- fails to give a notification required under this Law or
- fails to supply or supplies any information required of him under this Law which he knows to be false or which he has no reason to believe to be true, commits an offence and is liable on summary conviction to a fine not exceeding 500,000.00 cedis.
Offense by body of persons
17. (1) Where an offence under section 16 of this Law is committed by a body of persons then
- in the case of a body corporate, every director or manager of the body and the secretary to the body shall also be deemed to be guilty of that offence; or
- In the case of a partnership, every partner shall also be deemed to be guilty of the offence.
17. (2) No person shall be deemed to be guilty of an offence by virtue of this section if he proves that the offence was committed without his consent or connivance and that he exercised all due care and diligence to prevent the commission of the offence, having regard to all the circumstances.
18. The Secretary may in consultation with the Trust by legislative instrument make such regulations as may be necessary for the effective implementation of this Law.
19. (1) In this Law unless the context otherwise requires
- "Borrower" means a person who has obtained a loan under the scheme any part of which or interest on which for the time being remains unpaid.
- "Full age" means the age of twenty-one years or more.
- "Public tertiary institution" means
(a) universities or university colleges
(c) diploma award Teacher Training Colleges and
(d) all post General Certificate of Education or post Senior School institutions in Ghana financed from state funds
- "Secretary" means the P.N.D.C. Secretary responsible for Higher Education.
- "Student" includes a student of any public tertiary institution in Ghana but does not include any student who is on paid study leave from his employment.
19. (2) In this Law, any reference to employment of one person by another includes any relationship whereby a person engages as such, for a commission or allowance, the services of a commission, agent or any other person who habitually retails the goods of any other person in consideration for a commission or allowance or who habitually canvasses for or solicits customers for any other person in consideration for a commission or allowance, and the words "employer" and "remuneration" shall be construed accordingly.
20. (1) The University Students Credit Scheme Decree, 1975 (N.R.C.D. 356) and the University Students Credit Scheme (Amendment) Law, 1986 (P.N.D.C.L. 155) are hereby repealed.
20. (2) Notwithstanding the repeal of the enactments specified in subsection (1) of this section, any loan granted under the repealed enactments which remains unpaid shall be repaid in accordance with the terms of payment agreed upon under that enactments and shall be recovered from the borrower in accordance with the provisions of the repealed enactments.
21. This Law shall be deemed to have come into force on the 1st of January, 1998.