Michael Wanyama, the Executive Director of the scheme, says that only 63 students have been able to start repaying the money, yet available statistics indicate that over 4,000 students have already completed their studies in different disciplines where the government spent over 25 billion shillings with a big number of them expected to have started servicing their respective loans.
Many students are rushing to apply for government loans to pay for their university education but hardly any are paying back the money.
It transpires that only 1.5% have been servicing their loan at all, long after they graduated and started working. The Higher Education Students' Financing Board is now worried over the ridiculously low number of beneficiaries who are repaying the money yet younger Ugandans also need to take loans from the same fund.
Launched in 2014/2015 Academic Year, the program targeted
students who wanted to pursue a degree and undergraduate diploma courses in
Science, Technology, Engineering and Math (STEM) programs but are unable to
raise the necessary financing.
Available statistics indicate that over 4,000 students
have already completed their studies in different disciplines where the
government spent over 25 billion shillings with a big number of them expected
to have started servicing their respective loans.
However, Michael Wanyama, the Executive Director of the
scheme, says that only 63 students have been repaying the money. Wanyama
adds that that out of the 63 students, 13 have fully completed their loans even
before the allocated grace period while 50 are still servicing the loans.
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Wanyama notes that when a beneficiary is unable to meet
the set target, he or she is expected to give the board an update every after
three months so as to enable the board reschedules their loan repayment. He however adds
that upon finishing studies, many students cut contact with the board.
According to the Higher Education Students' Financing
Board loan agreements with the beneficiaries, one is given a grace period of
one year after completing studies but thereafter, he or she must share with the
board his repayment plan.
The loan repayment period is always set between three to
eleven years. During the repayment, the law stipulates that the scheme collects
money not exceeding 30 percent of one’s earning.
The state minister for higher education Dr. John
Chrysostom Muyingo notes that defaulting the loan might hinder the
government’s ability to finance or increasing allocation to the scheme which
had been designed for a revolving nature where the recovered monies would be
financing new beneficiaries.
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There is a negative culture in Uganda for people
benefitting from government lending programs to abscond and many times the
government has lost huge sums of money. In 2017, Dr. Robert Kyaligonza from the East African school of higher education at Makerere University published a
study arguing that the schemes’ current mechanism of repayment was already weak
and needed to be strengthened.
For instance, he argued that the program
needs to have a collection agency that is viewed as professional,
incorruptible, and technically competent and able to keep track of the borrowers’
Meanwhile, this year the scheme has set aside 4.5 billion
shillings to extended loans to 1,113 students. however, this is just 20 percent
of the total number of students that had applied for the loan for the coming
Wanyama notes that over the years, the number of students
requesting from the fund has steadily increased thus calling for additional funding
to enable them to take up more students. He also adds that additional funding will
enable them to extend their loans to continuing students, postgraduates, and
also those pursuing course in humanities.
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The student loan scheme exists in many developed and
developing countries financed by either public funds or backed by government
guarantees. In Uganda, the scheme was one of the many recommendations of the government white paper of 1992 looked at as one of the best ways to ensure
equitable access to higher education.
Since its inception, the scheme has benefitted 11,145
students. Among them are 3,000 health practitioners, 2,000 science teachers,
3,000 in engineering disciplines, and 800 in the field of agriculture among