With new students/freshers expected at universities in early August 2023, officials from the Ministry of Education and Sports and the Higher Education Students’ Financing Board (HESFB) are undecided on who should deliver the awful news that there will be no study loans for needy but brilliant students this academic year 2023/24 writes, YUDAYA NANGONZI.
This will be the first time since the inception of the scheme in 2014 – for the government to suspend study loans for needy students due to funding constraints and the growing tuition arrears with universities.
Several sources have informed The Observer that a series of meetings have been held to resolve this matter, all in vain. This implies that the loan board will only extend financial support to continuing students on the scheme – the last ones being those of the academic year 2022/23.
Out of the 3,089 eligible applications received by the HESFB last year, only 625 students were awarded study loans – citing budget cuts by the government. Out of the successful applicants, 40 declined the offer. The board will be working with these few students until further guidance from the government.
Following the release of the national merit lists of government-sponsored students to all public universities, there were high hopes for needy but brilliant students who had been left out to apply for the coveted study loans to pursue Science, Technology, Engineering, and Mathematics-related diploma and degree programs covered by the board. It’s only persons with disabilities with special treatment who either pursue science or humanity programs.
The board has been accustomed to massively advertising for prospective beneficiaries to apply for the study loans from May to July annually. The applications are processed to announce beneficiaries at the Uganda Media Centre before institutions open for new students in August.
This year, it is business unusual. There has been no advert – a clear indication that needy students should either seek scholarships or sponsors for their higher education.
For the past two weeks, various persons online have been querying the delays in application on the board’s official Twitter page. On Thursday last week, the board finally responded to the concerns by sharing a screenshot of a communication made by the HESFB executive director, Michael Wanyama, last month.
“The Higher Education Students Loan Scheme has not yet opened up receipt of the Loan application this year due to budget constraints and the public shall be informed whether there shall be such opportunities in the next three to four weeks. Please bear with us,” Wanyama tweeted.
In early May 2023, the HESFB wrote the Education minister, Janet Museveni, seeking her intervention into the ongoing financial troubles of the board with a focus on addressing tuition arrears with higher institutions of learning and provision of funds for a new cohort of students for the academic year 2023/24.
“NO NEW STUDENT APPLICATIONS”
This is after the board members had engaged the ministry’s top leadership to discuss the same. In the meeting, the minister suggested that the board should freeze new funding for new students for this academic year 2023/24 until all the tuition arrears are paid and internal arrears are settled.
Museveni went ahead to cement her position in a letter dated May 27, 2023, that was addressed to the HESFB chairperson, Dr Charles Wana-Etyem and copied to the ministry’s permanent secretary, Ketty Lamaro. The letter referenced: Domestic arrears of 14,599,969,549 to higher learning institutions as a result of budget cuts during the FY 2021/22.
“I have received your letter informing me of the status of HESFB’s financial shortfall which I believe we have discussed several times so far. As we all know, the budget cuts did occur to all sectors but what would have been wiser to do, which I believe I have advised you to do many times in our meetings, is to ensure that the funding you receive in your budget just goes to all the continuing students instead of starting with new cohorts without sufficient funds to go around,” Museveni’s letter reads in part.
She added: “If you had done that, you would not have such a high bill of arrears. Therefore, the purpose of this letter is to repeat exactly what I said in the last meeting….. To advise you that the HESFB ensures that you will not take any new students without clearing these domestic arrears.”
Museveni ended her position on the new applications by saying, “My prayer is that you at least get enough funding in your budget to clear UGX 14,599,969,549 billion. Even if you don’t pay for anything else, at least ensure you have no debts and also pay your wage bill.”
Currently, most of the students in the scheme are completing their courses. Education experts that have closely monitored the operations of the scheme who preferred anonymity said when no new students are enrolled, it’s an implication that the scheme is “closing”.
“We appreciate that the government has no money but this sets a bad precedent that the scheme is churning out people but not adding numbers. Consequently, it’s a sign of the future closure of the board’s activities. The needy students have been deprived of opportunities to join higher education as children of the rich gain access to all bilateral scholarships,” the expert said.
Another expert said that the current position of the ministry doesn’t seem to support President Museveni’s grand plan of creating a revolving fund under the scheme to support needy students. While launching the scheme in 2014 at Kyambogo University, Museveni noted that the scheme would see a gradual increase each year with the phasing out of the State House scholarships.
WHY THE HUGE ARREARS
The more than Shs 14.5bn domestic arrears that have led to the suspension of new applications comprise tuition, functional fees, and research expenses for the beneficiaries.
The arrears have been created as a result of low releases from the government in the past three financial years of 2020/21, 2021/22, and 2022/23. The debts have continued to accumulate since students continue to receive services from institutions despite no remittances by the board.
Universities sign memorandums of understanding with the board to treat students on the loan scheme as paid-up. The students sit examinations and receive all university services on condition that the university will hold onto the academic transcripts until the board clears their tuition.
The most affected universities with tuition arrears are those with high numbers of loan scheme beneficiaries; Makerere, Kyambogo, Busitema, Kabale, Ndejje, and Kampala International University (KIU).
The Observer further learnt that some universities have started writing to the Education Ministry’s permanent secretary expressing concern about the inability to run some programs for the beneficiaries due to accrued debts. One private university has already tendered in its letter that it’s choking on debts.
At least 1,250 students have completed their courses and graduated but cannot receive their transcripts to seek employment opportunities because the HESFB has not settled their tuition with the respective universities.
According to sources at universities, the non-payment by the board has forced the universities to “painfully” hold onto their academic documents yet they are supposed to repay the loans within the prescribed timeframe.
Graduates without transcripts are those who enrolled in the scheme in the academic years of 2018/19, 2019/2020, and 2020/21 – on both degree and diploma programs in science-related fields.
The current budget of the HEFB is Shs 31bn. However, the government is projected to avail only Shs 27bn to the board. Of the Shs 27bn, at least Shs 5.6bn of the total funds have been earmarked to offset some tuition debts. There are also more continuing students whose universities have never received tuition but are in their second year while others are finalists.
HESFB reports indicate that the board has disbursed about Shs 124bn in loans since inception in 2014. At least Shs 250m is being collected per quarter – up from Shs 105m. The loans are recoverable between three and 11 years depending on one’s course duration.
Wanyama has consistently noted that students repay their loans as long as they are employed. During the release of the last beneficiary list, he said the loans would soon be reported to the Credit Reference Bureau to track beneficiaries. As a result, all former beneficiaries who are not remitting monies to the board will not access loans from financial institutions.
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