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Student loan scheme kicks off on wrong lane


Student loan scheme kicks off on wrong lane

The pilot number of 1000 beneficiaries is too small compared to the number of needy students


Finally the government has advertised applications for the Higher Education Financing Scheme or commonly known as the student’s loan scheme after its launch by President Yoweri Museveni a few months ago.

The Ushs 5billion pilot scheme is to benefit 1000 needy Ugandan students offering science-based courses at public and private universities accredited by the National Council for Higher Education.

To start with, promised to support students who were finding difficulties in financing their higher education, most especially those that wouldgo through the universal primary and secondary education as well as post O’Level education and training(UPOLET),to complete the cycle of education up to tertiary/university level.

However, the pilot number of 1000 beneficiaries is too small compared to the number of needy students who would thirst and hunger for university and tertiary education.

For instance, in the 2013 UACE results which were released about a month ago, 115,380 candidates sat for the exams of which 61,479 candidates passed at least two principal subjects to enable them qualify for admission to various universities in Uganda. I would presume that the majority of those who passed-and thus qualified for admission-are poor to afford university or tertiary education.

The government needs to first of all carryout a scientific survey to establish the exact number of the needy students and those who can afford to pay for themselves at universities and tertiary institutions among the 2013 UACE lot to guide the process of compiling the list for the beneficiaries. With the glaring poverty levels, it will be difficult for the Higher Education Students’ Financing Board (HESFB)to select the ‘needy’ students through a “Means Test” scorecard as highlighted in the implementation plan of the Higher Education Students’ Financing Act, 2014.

Given the above, the government should at least raise the number of the pilot beneficiaries from the proposed 1000 to at least 10,000. We appreciate the fact that government is financially constrained, however, this money can be found as long as we realign our budget priorities and enforce transparency in public finance management. The President had directed that the Statehouse scholarship money (Ushs 30billion) be re-channeled to boost the students’ loan scheme. If this directive had been acted upon with urgency, by now we would be having at least Ushs 35billion (including the initial Ushs 5billion) to kick-start the project. Catering for 10,000 beneficiaries would necessitate at least Ushs 50billion.

Besides, the initial fund allocated for the scheme is way too little as compared to the number of beneficiaries. Ushs 5billion is a drop in the ocean;when split among the 1000 beneficiaries, each will get only Ushs 4million which doesn’t match the cost of a ‘lucrative’ science course, say, Medicine or Pharmacy which averagely would go for Ushs 1.5million a semester at the listed public and private accredited universities implementing the loan scheme.

The other issue which needs to be realistically answered is loan repayment. According to the provisions of the Higher Education Students’ Financing Act, students shall be expected to start repaying the loan a year after completion of study (grace period) so as to make the fund revolving to assist other needy students in future.

Unless there are assured jobs and accessible income for the fresh graduates, this might be difficult to implement. Statistics tell us that 400,000 youth graduate from universities, tertiary institutions, colleges, and other centres of learning of which only 8,000 find jobs in the formal sector. Government must now start to deliberately look at employment options for the graduates to enable them pay up their loans. The other option could be coming up with a “graduate loan scheme” to enable the graduates access credit for business or other income generating activities, which would further enable them pay back the loans.

Short of this, the jails will be full of loan defaulters. (The Law stipulates imprisonment of up to six months in jail over non-compliance in payment!)

Lastly, this is a good programme if well-managed and well-funded. This regime is notorious for hatching ‘juicy’ programmes purposely targeting an election season, and after the elections, nothing is heard of the launched and much praised programmes.



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