Varsities suspected of massive student loans theft

Dar es Salaam. The ministry of Education and Vocational Training is investigating several universities suspected of being part of a syndicate that has stolen from the government billions of shillings in dubious student’s loan payments.

Education minister Joyce Ndalichako confirmed yesterday that a special audit into the operation of the Higher Education Student’s Loan Board (HESLB) and questionable release of Sh3.2 billion is now extended to universities.

The new development comes in the wake of the revelation that there are billions of shillings that were credited to universities between 2013 and 2015 as student loans which cannot be accounted for.  “I have directed that the special audit should not be confined to HESLB; it should now be extended to universities with suspicious loan pay-outs.

“If the top is rotten, then there is a great possibility the rot has trickled down to the bottom. They (universities) will have to respond to queries from the auditor,” she said. 

“Our feeling is that it’s quite impossible for the board to pay out millions of shillings in loans to students who haven’t been admitted nor registered without the knowledge of the respective institution,” she told The Citizen.

Sources have told this paper that a well-organised cabal comprising senior executives in the HESLB has been colluding with staff in several universities to rip off billions meant for student loans.

The criminal alliance has made it possible for the universities to receive hundreds of millions of shillings ostensibly to pay students who have neither been registered nor admitted to the institutions.

According to findings of a special audit to HESLB between 2009 and 2013, some 343 unregistered students were paid Sh342.4 million in loans.

The audit released on Tuesday by Prof Ndalichako also discovered that a total of Sh136.2 was dished out to 55 students who had dropped out of university.

Some 54,299 students were allocated loans which they never applied for, according to the audit.

The audit has also revealed that Sh207 million which were allocated to students and sent to various universities but never collected were never returned by the receiving institutions.

HESLB is alleged to have paid Sh173.6 million in loans to unregistered students.

The executive secretary of the Tanzania Commission for Universities (TCU), Prof Yunus Mgaya, welcomed the move to audit universities and the procedures they use to release the loans cash to students.

He said HESLB released loans depending on the list sent to it by respective universities. “It remains the role of the universities to ensure they allocate the money to students accordingly,” he said. Prof Mgaya said the right procedure is that each and every cent that remains uncollected by students owing to reasons such as failure to fulfil requirements should be returned to the Loans Board.

“So, if the government is in doubt, it is important to audit them (universities) on how they disburse cash so that they trace mismanagements and seal any loopholes,” said the prof.

He said his office doesn’t keep data on how students secure loans because the pay-outs are done by HESLB.

Unreliable and frequent delays in the release of loans cash to students have been a cause of riots and violent clashes between students and the police.

In many instances, students have had to march to the education ministry to press for release of the loans. 

Yesterday, the Tanzania Higher Learning Institutions Students Organisation (Tahliso) said the move to investigate universities was  long overdue considering “the many years we have suffered in the hands of the board.”

Tahliso chairman Stanslaus Kadugalize said  it would be meaningless to investigate HESLB without roping in learning institutions which received students’ cash.

The HESLB was established in 2004 and became operational in July 2005.

One of its main objectives is to assist, on a loan basis, needy students who secure admission in accredited higher learning institution, but who haven’t the money to pay for the cost of their education.

But the student leaders say the body has abandoned the purpose for which it was established and turned into one catering for the well-to-do.

“We have evidence that many students coming from poor backgrounds have been denied the loans while those whose parents could pay secured loans at the Board,” says Mr Kadugalize.

“It has reached a point where the Loans Board lost direction…it is no longer serving the needy students. We are happy with the probe and we are expecting major changes at HESLB,” he said.

HESLB has in the 2014/15 academic year paid out Sh98,000 student loans amounting to Sh345 billion while in 2015/16 a total of 122,486 students received Sh459 billion in loans.

(Additional reporting by Saumu Mwalimu)