Spending on student loans drops by MVR 120mn, as complaints persist

Government spending on the student loan scheme has seen a decline of MVR 120.7 million compared to last year, according to the latest weekly fiscal development report released by the Finance Ministry.

The budget allocation for student loans this year is MVR 768 million.

The latest fiscal development report released by Finance Ministry on Tuesday evening shows the government spent MVR 333.6 million on student loans as of August 28. The figure is lower than the MVR 454.3 million spent during the same period last year, marking a decline of MVR 120.7 million.

The overall spending on the education sector has also seen a decline compared to last year.

The budget allocation for the Higher Education Ministry this year is MVR 1.3 billion. But the latest report shows the actual spending stands at MVR 654.4 million, marking a decline of MVR 81.6 million compared to the MVR 736 million spent during the same period last year.

Meanwhile, the budget allocation for the Education Ministry is MVR 4.4 billion. But the actual spending so far this year stands at MVR 2.5 billion, marking a decline of MVR 100 million compared to the MVR 2.6 billion spent during the same period last year.

The decline in spending on education comes amid a backdrop of persistent complaints from Maldivian students overseas over delays in the disbursement of financial aid they are entitled to by the state, specifically stipend and tuition fees, as well as delays in response to letters and emails sent by students inquiring about the delay.

When questioned about this at Parliament back on April 30, Higher Education Minister Dr. Ali Haidar Ahmed acknowledged “delays sometimes” in disbursement of financial aid to Maldivian students overseas, but said that the delays were often because the ministry is not provided all information it needs to process disbursements.

He added that the ministry is also working on creating a portal to manage student information. He said that the portal is expected to go live in October – which will make the process easier for both students and the ministry.

The government also faces the issue of failure of students to repay their loans.

Back in May, Haidar told the Parliament that only 40 percent of students make regular repayments for their student loans.

He said that the Higher Education Ministry was engaged in discussions regarding the issue, and would reach a decision soon.

The government spends around MVR 1.5 billion on student loans each year, with loan disbursements made biannually. There are currently over 1,600 students studying under the state-funded loan scheme.