Anxiety as student loan terms reviewed

Dar es Salaam. As 2016 draws to an end and the first semester for the academic year 2016/17 advances the fate of over 27,000 higher education loan applicants remains unclear.

This comes after their applications to secure higher education loans were disqualified for allegedly failing to meet the set criteria of the Higher Education Students’ Loans Board (HESLB).

This academic year, the Tanzania Commission for Universities (TCU) admitted 61,590 students and the loans board was expecting to accommodate around 25,000 applicants.

Last October, the minister of Education Science and Technology Prof Joyce Ndalichako said that the number of students admitted for higher learning studies through TCU this academic year was 58,000 while 25,717 of them were serviced with loans.

This is to say only 44 per cent of the applications were successful, with the majority complaining that they were denied loans despite the fact have met all the criteria.

Students who missed out on the allocations were given until January 31st next year to appeal.

There has been an outcry over loan issuances for students of higher education institutions as many feel the system is far from fair.

Early October, students from various universities including the University of Dar es Salaam (UDSM), threatened to strike in a bid to pressurise the government into increasing the number of beneficiaries. The dilemma has occurred  within the first year of the fifth phase government.

However, speaking on October 21, this year during the laying of a foundation stone for the construction of hostels at UDSM, President John Magufuli said all deserving students admitted to higher learning institutions in the country would be issued with loans.

In May this year Parliament approved the allocation of Sh483 billion as loans for tertiary students.

The amount was expected to accommodate 119,012 students of whom 25,717 are in their first year and 94,000 students are continuing with their studies.

According to Prof Ndalichako, by October at least Sh120 billion had been disbursed to students for the academic year 2016/17. 

During the 2015/16 academic year, the government issued loans to 124,243 students out of which 54,072 were fresh applicants and the remaining 70,171 were continuing students. The amount disbursed was Sh467.5 billion.

According to the loan application instructions by HELSB, bona fide beneficiaries should come from disadvantaged families, are disabled, are pursuing science courses that are considered a national priority in pushing the industrialisation drive.

In addition, the students must have performed well in their advanced secondary school and diploma courses.

“Only students meeting the set criteria will be issued loans. Priority will be given to those taking courses that the government needs in achieving its goals,” President Magufuli noted.

“But those students taking courses that are not government priority would have to be really in need,” he added.

The decision resulted in complaints as the changes in criteria drastically reduced the number of  would-be beneficiaries.

On the contrary HELSB executive director Abdul-Razaq Badru noted, “We have not introduced new regulations since 2011.  The problem is that the criteria  has not been effectively followed. For example a beneficiary is required to pay back the loan a year after graduation but there has been no effective follow-up,” he said.

Meanwhile, in a move to ensure that government money allocated to higher learning students, the Education ministry in February directed a special audit to verify the actual number of beneficiaries at universities across the country.

The exercise was conducted in July and the findings revealed that Sh3.8 billion was given to 2,192 phantom students from 30 universities.

The money was recovered between September and October following the order by the minister who issued a 30-day ultimatum.

The order, issued during a press conference held at the ministry on August 17, followed a joint investigation carried out between February and March this year by HELSB and the Prevention and Combating of Corruption Bureau (PCCB).

This was preceded by the February’s special auditing report for the loans board accounts by the office of the Controller and Auditor General (CAG) which noted that there was zero chance for the board to recover tens of billions of shillings from beneficiaries, as the money was disbursed to nonexistent students.

As a result of the findings the then HELSB Executive Director, Mr George Nyatengwa and three other directors were sacked on February 16, to pave the way for investigations.

The three officials were the director of Finance and Administration, Mr Yusuph Kisare, director of Loan Repayment and Recovery Juma Chagonja and the Loans Allocation and Disbursement director, Mr Onesmo Laizer. 

Early last month, the government through HELSB beefed up the campaign to recover the loans issued to over 142,470 beneficiaries who had not settled their debts since the mid 1990s.

The defaulters from both salaried and non-salaried earners were told to arrange modes of payment or risk legal action.

However the system for recovering the loans was faulted as some defaulters claimed that they owe the board more than the amounts they been asked to pay up while others have been asked to pay more than what they actually owe.

The recovery of the loans by the government prompted the amendment of the 2004 HELSB Act, of which all beneficiaries would now have 15 per cent of their monthly gross salaries deducted to recover their debts to the board.

The Act was passed in November and the amount is almost double of the eight per cent that used to be deducted.

The target is to recover an outstanding balance amounting to Sh3 trillion immediately so that the money is used as a revolving fund for loaning more higher education students.