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Students Loan Protection Scheme (SLPS)

What is the SLPS?
The SLPS is an initiative of the SLTF instituted to absorb the financial burden on guarantors and families that will result from default in loan repayments caused by death or permanent disability of borrowers.

Why the need for Loan Protection?
The SLTF has observed that guarantors or their families have to bear the burden of the repayment of loan balances when a borrower dies or suffers permanent disability. The SLPS was thus instituted to absorb such financial burdens as indicated .

What are the general benefits of the SLPS?
A guarantor would not have to pay back the balance on the loan they guaranteed should the borrower die.
A Borrower who is declared permanently disabled would not have to pay back the outstanding loan.

How does the SLPS work?
For a borrower whose loan repayments are on schedule, the SLPS will cover the balance in full.

Example:
Assuming a student had a total loan balance of GH¢1,200 which was due for repayment over 24 months or 2 years, s/he would have to repay GH¢50 a month for the period of 24 months. If the student has made due repayments for 5 months before the occurrence of death or incapacitation, the SLPS will cover the outstanding loan balance of GH¢950.

How would I contribute to the SLPS?
You will be required to contribute 0.5% of your loan to the SLPS. This contribution would be in the form of a deduction at source during disbursement. For example on a loan of GH¢380 per year, you will contribute GH¢1.90.

How long do I have to contribute to the SLPS?
Since contributions are made from deductions from loans paid to you, your SLPS contribution is tied to the number of loans that you receive from the SLTF. You will therefore contribute to the SLPS for as long as you continue to receive loans from the SLTF .

Are students who have taken other student loans covered under this scheme?
No! only students taking loans from SLTF are covered under the SLPS.

Are students who took the SLTF loans between 2006 and 2008 covered?
All borrowers who received the SLTF loan between 2006-2008, and are still accessing SLTF loans, are covered under the scheme.

What about borrowers who have already completed their studies?
These borrowers would not benefit from the SLPS and will have to repay any outstanding loans in case of death or total/permanent incapacitation. This is because such borrowers would not have contributed to the scheme.

Am I covered under the SLPS even after the end of my programme of study?
Yes! You will be covered by the SLPS till the end of the stipulated repayment period.

What happens if I’m withdrawn from school?
Per the SLTF Agreement, you will be expected to repay the loan balance, at the time of your withdrawal, within 12 months. During this period your loan balance will be covered by the SLPS. After this period you, your guarantor, or family will be required to repay your loan balance in full.

What does the SLPS not cover?
The SLPS does not cover loan balances that are in default at the time of death or total/permanent incapacitation of borrower. In such cases the guarantor or family would have to repay the outstanding loan balance.

Example:
A student whose total loan balance is GH¢1,200 and is due for repayment in 24 months or 2 years, would have to repay GH¢50 a month for the period of 24 months. If the student defaults with his/her monthly repayments for 5 months before the occurrence of death or incapacitation, the SLPS will not cover the loan balance of GH¢250 which is in default.

What else does the SLPS not cover?
The SLPS does not cover death by suicide.
It does not cover willful self-inflicted injury that leads to permanent disability.

Does SLPS cover any outstanding loan after the end of my stipulated repayment period?
Your loan would be considered to be in default and will therefore not be covered. The protection under SLPS would have expired, and you will be required to pay back the outstanding loan in full.

What happens if my employer fails to submit my loan repayment deductions to the SLTF?
It is your responsibility to ensure that your deductions are paid to the SLTF. You should keep up with information on your loan balances at all times and ensure that your repayments are up to date.

How would claims be made under the incidence of death?
Promptly report incidence of death to SLTF.
Submit relevant documentary evidence of death, i.e. death certificate, burial permit, Letters of Administration, affidavit from family head, etc.
A Claims Review Committee would investigate report and advise.

How do I claim under permanent incapacitation?
Promptly report incidence of incapacitation to SLTF.
Submit relevant documentary evidence of incidence, i.e. medical certificate from approved hospital, police report, etc.
A Claims Review Committee would investigate report and advise.

How long will it take to process claims?

One month after receipt of notification in writing with all supporting documents.

When will the SLPS be implemented?
The SLPS would be implemented from the 2009/10 academic year.

What is Disability Cover?
A student borrower can become totally or permanently incapacitated whilst in school or after school.
Disability in school refers to a situation where the student becomes incapacitated to the extent that his/her education has to be discontinued.
Disability after school refers to a situation where the student becomes incapacitated to the extent that he/she cannot be gainfully employed or if employed, cannot continue to work.

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