Loans for higher education: Will the needy get a fair share?
Feb 19, 2008
A PROMINENT businessman once stormed the students’ loan board offices in Kenya to demand an explanation why one of his children was denied a loan yet the other was given. After thorough scrutiny, it turned out that the child who gave genuine information was denied the loan. That is the story of th
By Arthur Baguma
A PROMINENT businessman once stormed the students’ loan board offices in Kenya to demand an explanation why one of his children was denied a loan yet the other was given. After thorough scrutiny, it turned out that the child who gave genuine information was denied the loan. The child who told lies that his father was a mad man roaming the Nairobi streets got the loan.
Another case was a son of a senior government official who lied about his father’s financial status to get the loan. When the official discovered his son had irregularly acquired the loan, he returned the money with an apology. These were some of the experiences stakeholders shared at a workshop on the feasibility of the higher education loan scheme in Uganda. The workshop was organised by the National Council for Higher Education (NCHE).
Although the demand for tertiary education has increased, Government funding is low, making the scheme timely.
Uganda’s higher education enrolments, particularly in universities, has increased since the 1970s. In the 1950s there was one tertiary institution serving about 252 students, but by 2000, this had increased to over 55,000 in 25 institutions. Today there are over 100,000 students in over 100 institutions.
“The education sector is looking at the feasibility of introducing a loan scheme to aid the disadvantaged but qualified students access higher education. Many countries have introduced loan schemes and there are lessons to learn from them,†said the minister of state for higher education, Gabriel Opio.
The scheme exists in Ghana, South Africa, Kenya, Rwanda and Tanzania.
As Uganda plans to start the loan scheme, stakeholders are worried that identifying genuine beneficiaries might be a nightmare. Prof. A.B Kasozi, the executive director of NCHE, said: “Whoever does it has to think very carefully.â€
His view was echoed by Prof. Mondo Kagonyera, the Chancellor of Makerere University, who warned that, like in other African countries, the scheme will have problems, but suggested the scheme has to be made simple. “If we make it complicated, it will not work,†Kagonyera said.
He also called for tackling of corruption.
Prof. Bruce Johnstone, who was the main speaker, said loan schemes are necessary for development. Johnstone, a distinguished professor of Higher and Comparative Education at the State University of New York, warned that loan schemes in Africa have been associated with problems like failure, low recovery and inability to tap savings in the capital market, hence making the Government the only lender.
He attributed the failure to misrepresentation, failure to stress repayment obligations and insufficient electronic database, among others.
Prof. Nyeko Pen Mogi, the Vice-Chancellor of Gulu University, emphasised that the loan scheme would bridge the education gap between the poor and the rich. “There is need to implement the scheme. If we don’t do that, education will be for those who can afford and those who go to good schools. It will leave out the needy bright students,†Nyeko said.
The Government’s efforts to establish a loan scheme started several years back. The aim is to transform higher education from being a monopoly of the elite to a right of masses.
Applicability of scheme
Dr Daniel Kyanda was contracted by the Government to study how to establish a higher education student’s loan scheme. The two-year study indicated that the scheme would mark a new dawn in the education system.
“It will mean higher education for the disadvantaged. A stumbling block to social integration and cohesion will have been removed,†Kyanda states in his report.
Legislative framework
The study recommends enacting a law to regulate the loan scheme.
The law will define the purpose and functions of the scheme. Allthough a loan scheme has existed in Kenya for several years, there was no law binding the students and the loan authority. Consequently, students regularly defaulted on repayment.
There is also need for useful deliberations on the scheme’s operation as regards to beneficiaries.
Source of funds
Kyanda recommends the gradual abolition of Government sponsorship of 4,000 students in public universities and replace it with the loan scheme.
Although this measure could result in social upheaval, Kyanda suggests that the Government mitigates this through providing start-up funds and subsequent contributions to keep the scheme running.
The Government can also provide security for loans and appoint a board made up of individuals with proven administrative expertise, each representing a sector with a large stake in the loan fund.
Eligibility
In many countries, eligibility is established through tests that are validated by people who know the applicant. Sometimes abuses occur, but these can be reduced.
In Uganda, Kyanda recommends the use of the decentralised systems and churches.
A PROMINENT businessman once stormed the students’ loan board offices in Kenya to demand an explanation why one of his children was denied a loan yet the other was given. After thorough scrutiny, it turned out that the child who gave genuine information was denied the loan. The child who told lies that his father was a mad man roaming the Nairobi streets got the loan.
Another case was a son of a senior government official who lied about his father’s financial status to get the loan. When the official discovered his son had irregularly acquired the loan, he returned the money with an apology. These were some of the experiences stakeholders shared at a workshop on the feasibility of the higher education loan scheme in Uganda. The workshop was organised by the National Council for Higher Education (NCHE).
Although the demand for tertiary education has increased, Government funding is low, making the scheme timely.
Uganda’s higher education enrolments, particularly in universities, has increased since the 1970s. In the 1950s there was one tertiary institution serving about 252 students, but by 2000, this had increased to over 55,000 in 25 institutions. Today there are over 100,000 students in over 100 institutions.
“The education sector is looking at the feasibility of introducing a loan scheme to aid the disadvantaged but qualified students access higher education. Many countries have introduced loan schemes and there are lessons to learn from them,†said the minister of state for higher education, Gabriel Opio.
The scheme exists in Ghana, South Africa, Kenya, Rwanda and Tanzania.
As Uganda plans to start the loan scheme, stakeholders are worried that identifying genuine beneficiaries might be a nightmare. Prof. A.B Kasozi, the executive director of NCHE, said: “Whoever does it has to think very carefully.â€
His view was echoed by Prof. Mondo Kagonyera, the Chancellor of Makerere University, who warned that, like in other African countries, the scheme will have problems, but suggested the scheme has to be made simple. “If we make it complicated, it will not work,†Kagonyera said.
He also called for tackling of corruption.
Prof. Bruce Johnstone, who was the main speaker, said loan schemes are necessary for development. Johnstone, a distinguished professor of Higher and Comparative Education at the State University of New York, warned that loan schemes in Africa have been associated with problems like failure, low recovery and inability to tap savings in the capital market, hence making the Government the only lender.
He attributed the failure to misrepresentation, failure to stress repayment obligations and insufficient electronic database, among others.
Prof. Nyeko Pen Mogi, the Vice-Chancellor of Gulu University, emphasised that the loan scheme would bridge the education gap between the poor and the rich. “There is need to implement the scheme. If we don’t do that, education will be for those who can afford and those who go to good schools. It will leave out the needy bright students,†Nyeko said.
The Government’s efforts to establish a loan scheme started several years back. The aim is to transform higher education from being a monopoly of the elite to a right of masses.
Applicability of scheme
Dr Daniel Kyanda was contracted by the Government to study how to establish a higher education student’s loan scheme. The two-year study indicated that the scheme would mark a new dawn in the education system.
“It will mean higher education for the disadvantaged. A stumbling block to social integration and cohesion will have been removed,†Kyanda states in his report.
Legislative framework
The study recommends enacting a law to regulate the loan scheme.
The law will define the purpose and functions of the scheme. Allthough a loan scheme has existed in Kenya for several years, there was no law binding the students and the loan authority. Consequently, students regularly defaulted on repayment.
There is also need for useful deliberations on the scheme’s operation as regards to beneficiaries.
Source of funds
Kyanda recommends the gradual abolition of Government sponsorship of 4,000 students in public universities and replace it with the loan scheme.
Although this measure could result in social upheaval, Kyanda suggests that the Government mitigates this through providing start-up funds and subsequent contributions to keep the scheme running.
The Government can also provide security for loans and appoint a board made up of individuals with proven administrative expertise, each representing a sector with a large stake in the loan fund.
Eligibility
In many countries, eligibility is established through tests that are validated by people who know the applicant. Sometimes abuses occur, but these can be reduced.
In Uganda, Kyanda recommends the use of the decentralised systems and churches.