Government seeks Shs26 billion for student loan scheme

However, questions remain over how the money will be recovered.

The Ministry of Education wants Parliament to approve Shs26 billion in order to roll out the delayed students’ loan scheme but questions remain over how the money will be recovered.

The proposed Students’ Loan Scheme Bill says students will have to repay the loans in a year whether they are employed or not. Minister Kamanda Bataringaya [Primary Education] said once approved by Cabinet, the Bill will be tabled in Parliament in May. “Students will be encouraged to apply for better courses where they are sure they will get the jobs after school,” he said.

The government introduced the students’ loan scheme to enable needy students to pay for their university education but the short repayment period is likely to be disputed. Students in other countries often have several years over which to pay off their loans, and often only after they get jobs.

Out of about 400,000 students who join the job market every year, less than 100,000 can expect to get formal jobs. Government has been supporting about 4,000 students every year at the five public universities of Busitema, Gulu, Kyambogo, Mbarara and Makerere but this is seen as financially unsustainable.

Other schemes, such as a scholarship scheme run out of State House, have been criticised as being selective and prone to cronyism. Critics indicat that the scheme is prone to abuse since there is no in-built mechanism of targeting the needy.

The Africa Development Indicators report released by the World Bank placed youth unemployment in Uganda at 83 per cent.

mnalugo@ug.nationmedia.com