Student Loan - Loans and Debt Consolidation

34 000 GRADUATES TO SHARE IN LOAN WINDFALL INDEPENDENT ONLINE

34 000 graduates to share in loan windfall

October 11 2011 at 08:45am By Marianne Merten

Thousands of graduates are set to share in a R77.8 million surprise when a government student loan scheme refunds them for overpayments on their loans.

Nzimande announced that the scheme had been given an unqualified audit opinion, describing it as an outstanding achievement and a vindication of his decision to restructure the board last December.

A request for proposals to help trace the former students would be finalised soon, said the scheme s board.

Recalculating the debts of tens of thousands of loan recipients was part of the work done this year to correct a number of financial management problems identified by the auditor-general in his disclaimer last year.

Among the problems was that the scheme calculated interest incorrectly as being R181m, when it should have been more, and failing to provide scientifically compelling evidence for writing off R589m in unpaid interest.

Stephen Smith, chairman of the scheme s audit committee, said the 12-year-old loan management system had incorrectly offset repayments against the capital amount instead of interest. This meant students had benefited through a faster reduction of their debts.

It had been decided that those students who benefited would not be required to make good on past benefits, Smith said, but the correct repayment calculations now applied to all.

Now, for the first time...[more]