STUDENT’S LOAN SCHEME IS HERE BUT.....???

The president on Thursday 24^th of April launched students loan scheme meant to cater for poor students pursuing higher education. There is no reason to feast and celebrate before this scheme commence practically since it may not yield what we expect or succeed far than our imagination.

However this loan scheme raises ample questions.

The first question is who is entitled to benefit from this scheme?. The response is vivid and clear, students pursuing higher education from poor background whose parents/guardians are incapable of paying huge amount of money at university

What will be the criterion of picking out the genuine poor students since everyone is likely to disguise him or herself as a student hailing from humble background?. It will not be a bizarre when this loan scheme caters for sons and daughters of high ranking politicians and the bourgeois class.

Hopefully everyone understands that state house scholarship was meant to cater for students from poor background but this has been less a reality. Students benefiting can testify how they were admitted and those who has tried to gain from it but failed can tell what the basic credentials are for a student to be admitted on state scholarship.

Since state scholarship has been scrapped off and the money will be channelled through this scheme, those politicians who have been reaping big from it may still follow loan scheme.

The scheme will start financing students who wish to pursue science courses and latter incorporate in arts and humanities courses. The mental impact of this will be poor parents’ forcing their son and daughters to pursue science course in order to qualify as beneficiaries.

The end result will be training half baked doctors, engineers, nurses, chemists, etc. After schooling such doctors and engineers may join professions of their interest. For example journalism is an open profession which is open to good writers-print media and public speakers-broadcast media.

There is also a need to mirror into the question of repayment. How will beneficiaries re pay after studies?.

 Clause 17 of Higher Education Students Financing Act says that student loan shall be repaid with an interest which shall be determined by the Finance minister.

 Under clause 22, a person who has received a student loan shall start repaying the loan and interest at least one year after completing the course.

Interestingly, the person shall start repaying whether he/she is employed or not. Nevertheless with unemployment skyrocketing and wage (earning from employment) being the main source of income to Ugandans, the substantive question is; where will these graduates get money to repay if they don’t find jobs?.

The Act further creates lacunas for beneficiaries who are unemployed to joke around with loans. It state “Where a person is not employed and has no income from which deductions may be made for the repayment of the student loan, the person shall within 14 days after receiving the notice under (4) in the prescribed manner, inform the board accordingly” but what if such a person remains unemployed forever?.

With imperfect information about Uganda’s labour market knowing, who is employed or not will be a problem since government may hardly cash in money for checking these graduates who are employed.  The end result could be beneficiaries refusing to repay even when they are employed.

The will be catalysed by desire among graduates who will be eying financial and material success hence exploiting any loophole in the system to default payment.

As result government must start erecting prisons for repayment defaulters of the loan scheme if it is going to imprison them. The fact is that a marginal number of the beneficiaries will repay without inconveniences whether they will get jobs or not.

In Rwanda, statistics show that only 17 percent of the loan scheme beneficiaries have paid back from 1980-2012 but government projects that 80 percent will pay back the loan by 2022/2023.

As result government of Rwanda early 2013 scraped off loan for students joining tertiary institutions as it attempt to recover unpaid loan amounting to frw 73 billions.

In Ghana, government is looking for ways of recovering about 25 million dollars due to failure by students to pay.

For government to say that they shall imprison repayment defaulters yet we also have to incarcerate criminals, terrorists, and rapists among others is unrealistic. There is no space in prisons.

We are speculating and basing on utopian assumption that the scheme succeed. Yes or no but we shall have to wait how it will flourish.

As a true Ugandan, I wish this project succeed and benefit the poor than “the poor.”