Boys top the list of Student Loan beneficiaries

At least 840 of the 2,109 students who applied to be considered for financial support under the students’ loans scheme this year have not been turned down.

Government Monday released the list of undergraduate students who have secured financial assistance for tertiary education under the loan’s scheme this financial year.

Education Minister Jessica Alupo released the list at the Uganda Media Centre in Kampala. She was flanked by the Higher Education Minister Dr Chrysostom Muyingo.

Alupo regarded the selection of the maiden beneficiaries as “a great milestone in achieving the education sector objective of increasing equitable access to higher education”.

Criteria for selection

In selection of beneficiaries, Prof Callisto Locheng, the chairman of the scheme’s board said regional balance, gender, and social-economic status were considered. All applicants were subjected to a uniform scorecard considering proxy indicators to arrive to lending decision.

“The proxy indicators included academic progress, previous school fees payment history, orphanage, amount of loan required, parents’ life status, family size, disability/special needs, family income levels, parents’ level of education, use of utilities in the home, access to medical care and expenses related to accommodating the family,” explained Locheng.

“This helped us to identify the needier applicants who scored higher than their less needy counterparts and consequently the ones who scored higher points were awared the loans to support them to pursue higher education programmes.”

However, government will soon launch a random survey and all beneficiaries found to have lied about their details will be penalized.

Wakiso tops

At least 1,269 students from 108 districts were selected, with Wakiso (51) registering the highest number of beneficiaries.
Other districts that registered high numbers of beneficiaries include Mbarara (36), Bushenyi (35), Kabale (34), Ntungamo (33), Mityana (27), Sheema (25) and Mitooma (24.

Amudat, Nakapiripirit, Buvuma and Bulisa are districts whose students did not apply to be considered for the loans.

All applicants from Bundibugyo, Kabong, Moroto and Zombo districts were awarded the loans.

KIU gets highest number of beneficiaries

Among the 13 accredited universities chosen for the scheme, Kampala International University (KIU) registered the highest number of beneficiaries (407).

The remaining beneficiaries were sourced from Makerere (229), Kyambogo (157), Busitema (101), Gulu (47), Ndejje (136), Nkumba (13), Bugema (9), and Nkozi universities.

Others are from Islamic University in Uganda (13), Mbarara University of Science and Technology (79) and Uganda Christian University (44).

As much as Muni University in Arua is a participating institution in the scheme, its students did not apply for loans. The latest public university, Muni is yet to release the list of her maiden students.

Boys get more loans

Of the beneficiaries, 986 (77.7%) are boys, while the remaining 283 (22.3%) are girls. All the four persons with disabilities, who applied for the loans, secured financial support.

A total of 2,109 students had applied to be considered for support under the government’s higher education loans scheme. 1,655 (78.5%) of the applicants were boys, while the rest were girls.

Of the total applications, 422 (20%) fell outside the parameters of eligibility and were subsequently disqualified. Those disqualified were pursuing diploma programmes, admitted for courses other than those approved for the loans and students of non-participating institutions.

The loans were meant for first year degree students pursuing any of the 26 science courses in any of the 13 chosen accredited universities.

Students who have already obtained government scholarship have not been offered the loans, because “they were limiting opportunities for other needy students to access higher education.” 840 students missed the loans.

Mode of payment

Government has set aside sh5b to bankroll the scheme in the 2014/2015 financial year. Locheng said the lowest loan advanced this year is sh1, 750, 000 for Bachelor of Education at Gulu, the highest is sh6, 782,000 for Bachelor of Engineering of UCU.

The average unit cost for the students being supported this financial year has been taken to be sh4, 266,000. The variance in the amount required for the 26 science courses, Locheng said has enabled the board to raise the number of maiden beneficiaries to 1,269, from the initially preset 1,000.

The loans cover tuition fees, functional fees, research obligations and appliances and aids for people with disability.
Michael Wanyama, the coordinator of the higher education loan scheme said in future, the initiative could also consider giving students more money for accommodation and meals when funds are sufficient.

The money will be disbursed by the end of next week to the respective universities of the beneficiaries. However, the money for the appliances and aids for people with disabilities will be wired to their respective accounts.

Nevertheless, Locheng said all beneficiaries have to sign an agreement with government before receiving the loans. The agreements will be signed at the respective universities of the beneficiary students.

“The beneficiaries are required to pay 0.5% of the gross loan amount as loan protection fees to the Higher Education Students’ Financing Board account in Centenary Bank. This is meant to indemnify the borrower against payment of the outstanding debt to the fund as a result of death or permanent disability,” said Locheng.

Interest rates to change with inflation rate

 Government has put an interest of seven per cent on the loans, meaning the Shs4 million each student will get every year will attract an interest of Shs280, 000.

Wanyama said the interest rate will change with the inflation. However, if inflation spirals to double digits, he said government has advised that the interest rates be capped at 10%.

Launching the scheme at Kyamgogo University in May, President Museveni urged needy bright students to take the loans but cautioned them against defaulting. He said defaulters will be arrested.      

  
Alupo emphasized that the beneficiaries that the loan is not free money and they are required to “take their studies seriously and pay back the loans”.

Repayment in twice the period of study

According to the Higher Education Students Financing Act, 2014, repayment of the loan shall be charged on the income of the person who received the loan. Amount deducted to offset the loan has been capped at 30% of the income of beneficiary.

Repayment starts a year after the beneficiary has completed studies, whether employed or not. Repayment should be completed in twice the period spent for undertaking studies.

The Act provides for a six-month jail sentence or a fine of at most sh1m to beneficiaries who try to default after graduating.
Alupo said the higher education loan scheme was meant to meet the greater demand for tertiary education from the ever increasing products of universal education.

The Minister said there were plans to divert funds from the Statehouse scholarship to the loan scheme, in a bid to “double the number of beneficiaries in the successive years.”
 

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