1,700 students graduate with support of Government loans

EDUCATION|LOAN SCHEME|STUDENTS 

Since the Students Loan Scheme started in the country, six years ago, a total of 1,700 students have graduated from various universities in the county. 

Some of the students who graduated have also started refunding the money lent to them by Government, to ably support needier and bright students doing science degree and diploma courses. 

The executive director of the Scheme Micheal Wanyama, in an interview with New Vision, revealed that the Board has put in place a Recovery Department with three staff to follow up on the due loans among other duties. 

"The Board disburses fees to the successful Needy Students on a straight line basis and upon Completion of Studies, there is a Grace Period of 12 months intended for the Students to find employment and thereafter start Loan Repayments," he explains. 

He also notes, "As, at the end of June 2019, 1,700 students had completed their Study Programmes and served a statutory 12 months grace period and have been profiled for repayment. To date, a total of sh200m has been collected. We had projected to collect 500 million this financial year 2019/2020 but this was not possible due to the prevailing COVID-19 pandemic." 

He adds, "The Students have been contacted through meetings arranged by the Board in several districts across the country. They have been issued with letters of commencement to pay and 60% of them are generally repaying their loans. From these over sh172 million has been collected."

Records from the scheme show that in July 2020, another batch of 1,451 students started the repayment. However, the Board also allows voluntary repayments (Early Repayments), which are the repayments made when the student is still studying.

Several recovery strategies have been put in place to ensure maximal collections to reach upper quartile performance. 

The strategies include registering all loanees on the Credit Reference Bureau, introduction of the Loan Protection Fund to mitigate against debts that arise from death or permanent disability of the beneficiaries, and continuous stakeholders' engagement with the FUE that has helped employers to seek details of all the new employees they engage.

There is also a feedback system that is put on the website to improve customer service, continuous reminders to the beneficiaries on repayment of their loans, and Recoveries Symposiums with Beneficiaries in areas of financial literacy programmes that targets Interview Skills, Entrepreneurship, Professionalism and Mindset Change.