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Student loan scheme begins
Publish Date: Feb 28, 2010
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By Conan Businge

PRIVATE students joining universities this academic year will have a chance to get loans from the Government to pay for their education.

“We have already created a secretariat for the loan scheme. We are going to begin giving out loans this academic year to a small number of students,” Elizabeth Gabona, the commissioner for secondary education, told The New Vision.

“We shall gradually increase the number of students depending on the available funds.”

She explained that by the time the first semester opens, the secretariat will have set all the required conditions for applicants.

Education minister Geraldine Bitamazire confirmed the development. She said it was part of the Government’s efforts to make university education more inclusive. About sh10b has been budgeted for the scheme in the next three financial years.

The funds are meant to advance money to needy students in all local governments. Part of the funds will also be used to enhance development of staff in public universities for masters and doctoral studies.

Plans to introduce loans for Ugandan university students date back to 1990. Initially, the plan was to give loans to Government-sponsored students to meet their living cost. But consultants hired by the Government recommended that loans with subsidised interest rates be given to the best performing private students.

Student loan schemes have been established in at least 50 countries around the world. In Africa, they exist in Ghana, South Africa, Kenya, Rwanda and Tanzania.

In most schemes, students only start paying back once they have graduated and found a job.

However, many schemes are marred by high administrative costs and high default rates. They struggle to strike a balance between assisting needy students and ensuring financial sustainability.

Apart from the student loan scheme, President Yoweri Museveni last week announced plans to set up another loan scheme for unemployed graduates.

“Through the fund, young graduates will get loans to start income-generating activities as part of tackling youth unemployment,” a press release from State House said.

The loans will be at low interest rates or interest-free and for students with university degrees. Those with certificates will be considered at a later stage, the statement added.

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