The Allocation of Students Loan Using Means Testing at the Students Loan Trust Fund

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It is an undisputable fact that, education especially, at the tertiary level, plays an important role in reducing poverty, inequality and promoting sustainable economic development (UNESCO, 2010; McMahon, 1999). Despite the significance of higher education, its acquisition entails a huge capital commitment, which many governments in most developing countries such as Ghana have been grappling with over the years. In response to the myriad challenges in financing higher education such as accessibility and rapidly growing demand for tertiary education, many countries are trying to introduce elements of cost sharing such as students’ loans, in order to expand the quality of higher education, of which Ghana is no exception. African countries like Kenya and Tanzania have adopted the use of means tested students’ loans to expand access to higher education to needy students. In Ghana, no or little studies have been conducted on means testing of students’ loan to tertiary students. Further, little is also known of how the Students Loan Trust Fund (SLTF), allocates students loan using the means testing methodology to assess the financial needs of loan applicants. Therefore, the study aimed at exploring the allocation of students’ loan using Means Testing to assess their financial needs in order to give them appropriate loan amounts at the SLTF. Purposive sampling technique was employed to obtain the unit of analysis. Key-informant interview was used to collect primary data while secondary data on loan applicants for the 2011/12 academic year was obtained as a Microsoft Excel file from SLTF. Results from the analysis showed that, majority of the applicants constituting 83% were males, while the females were only 17%. It was also found out that, the loan applicants were grouped into ten (10) need categories based on their need assessment levels. In addition, findings from the study indicated that, majority (57%) of the loan applicants fell in the average need categories. The main challenge identified during the study is the provision of false information by applicants that may not be verifiable. The study however, concluded by asserting the essence of the means testing methodology for students’ loan allocations and reiterated the need to examine the critical factors that may limit the usefulness of the tool in the efficient allocation of students’ loan in Ghana. The study recommended among others that, there should be an increase in awareness creation of the means tested loans to students who are permanently residing in rural localities in Ghana.
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, September-2012