Haruna Iddrisu signals review of compound interest on student loans

The Minister for Education, Haruna Iddrisu, has hinted at a possible review of the interest rate structure governing the Students Loan Trust Fund (SLTF) to make repayment fairer and more considerate of graduates’ employment realities.

Speaking before the Public Accounts Committee on Monday, November 3, the Minister expressed concern about the current system, where graduates are burdened with compound interest on their loans despite struggling to find employment after school.

He further revealed an expansion of the trust fund, which is now open to students at the Law School to apply, emphasising that while the government remains committed to protecting the fund’s sustainability, it must also demonstrate empathy toward graduates who face unemployment after completing their studies.

“I am happy to announce that Ghana Student Loan Trust has enrolled students at the Law School. They can now proceed with the student loan task. Previously, this was not done. The President announced it when he launched the opportunity and facility for persons with disability.

“A student gets a loan, and that student gets out of school without any job, and you are compounding interest for the student mathematically; there is no fairness in that. So we may have to go back to the simple interest regime, but also not jeopardise the income security of those from whom the money is sourced.

“I do not think it is fair that we compound interest when they do not have jobs. But the Students’ Loan Fund is doing well,” he said.

The Students’ Loan Trust Fund (SLTF), established to provide financial support to students in accredited tertiary institutions, is set to witness an increase in funding from GH¢70 million to GH¢150 million in 2026 to expand access to higher education.

However, the SLTF offers loans at relatively low-interest rates, currently set at 12% per annum.