Mahama Slashes Student Loan Interest Rate by Half, Launches “No Fees Stress” Initiative

President John Dramani Mahama has cut student loan interest rates from 12% to 6% and introduced the “No Fees Stress” Initiative, providing full tuition coverage loans to ease financial pressure on tertiary students in Ghana.

President Mahama’s Education Reset Agenda Gains Momentum

President John Dramani Mahama’s Reset Agenda for education has taken a bold step forward with the announcement of sweeping reforms to the Students Loan Trust Fund (SLTF). The measures, unveiled on November 7, 2025, include drastic reductions in loan interest rates, higher loan amounts, and the launch of a new initiative to eliminate fee-related financial barriers in tertiary institutions.

The reforms are expected to transform how Ghanaian students access higher education, ensuring affordability and equal opportunity across the country.

Interest Rate Cut from 12% Compound to 6% Simple

In one of the most significant changes, the interest rate on student loans has been reduced from 12% compound interest to 6% simple interest during the study period and moratorium.

This move means that students will no longer face the heavy interest accumulation that previously burdened many graduates. Instead, repayments will be more manageable and predictable, encouraging more students to pursue higher education without fear of lifelong debt.

Education policy experts have hailed this decision as “historic” and a clear sign of the government’s renewed commitment to making tertiary education accessible to all.

Introduction of “Students Loan Plus” Under No Fees Stress Initiative

The Students Loan Plus, launched under the No Fees Stress Initiative, offers full tuition coverage loans disbursed directly to tertiary institutions. This means students can now begin their academic journey without the immediate pressure of paying fees upfront.

This reform targets economically disadvantaged students who often defer or abandon their studies due to financial hardship. By removing this barrier, the initiative strengthens Ghana’s vision of inclusive and equitable education.

Higher Loan Amounts and Streamlined Process

The SLTF also confirmed that loan amounts have been increased by 50%, ranging from GHS 2,250 to GHS 4,500 per academic year. Additionally, the E-zwich requirement has been scrapped to simplify the application process.

Under the new system, GCB Bank accounts will be created automatically through the No Fees Stress portal for all applicants, ensuring faster and smoother disbursements.

Commitment to Equity and Accessibility

The Chief Executive Officer of the SLTF, Dr. Saajida Shiraz, emphasized that the reforms are aligned with the President’s vision of social equity and access to education.

“Under the auspices of the Ministry of Education, the SLTF remains committed to enhancing equitable access to affordable and inclusive tertiary education in Ghana,” Dr. Shiraz stated.

The reforms are part of a broader strategy under the Reset Agenda, which seeks to reengineer Ghana’s education system for efficiency, relevance, and national development.

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Public Response

Students, educators, and civil society groups have largely welcomed the reforms. Many have described them as “a long-awaited relief” for struggling tertiary students. The cut in interest rates and the introduction of full tuition coverage loans are expected to increase enrollment and retention rates in universities and colleges.

Observers say the policy not only improves financial inclusion but also reflects a growing understanding of the economic challenges students face in the current inflationary climate.

Conclusion

President Mahama’s student loan reforms have been widely viewed as a turning point in Ghana’s higher education financing. With reduced interest rates, increased loan amounts, and simplified access, the reforms lay the foundation for a more equitable and sustainable education financing framework.