Friday August 29 2014

Review the terms of students loan scheme

In April, President Museveni launched a promising programme as part of the government’s education fund plan for students from poor families. The students loan scheme that is planned to start with an initial allocation of Shs5 billion would be increased yearly using funds from the State House scholarships now being phased out.
This money, as this newspaper reported on Wednesday, is not enough. About 50 per cent of the students who applied for the annual Shs4 million grant per student will miss the university loans. The executive director of the higher education loan scheme Secretariat, Mr Michael Wanyama, says 2,029 students had applied for the loan, yet the pilot scheme can only benefit 1,000 students.

From the start, it was obvious that this scheme, given the Shs5 billion allocation – with each beneficiary accessing about Shs4 million – would benefit just about 1,000 students. This being a commendable intervention to support needy students, it is imperative that the 50 per cent who could not access the loan are also planned for.

The government should raise the number of the pilot beneficiaries from 1,000 to include more students. While financial limitations are understandable, this is possible if we realign our budget priorities and enforce transparency in public finance management.
At the launch of the scheme, the President had directed that the State House scholarship money (Shs30 billion) be rechanneled to boost the students’ loan scheme. This directive, if implemented, should cater for all the applicants with gradual increments yearly depending on the number of eligible students and the resource envelope.

Government should also review the amount allocated to each student, the priority being science students. For instance, Shs4 million would not be enough for a student enrolled for Medicine or Pharmacy, which on average, requires Shs2 million per semester at the listed public and private accredited universities implementing the loan scheme.

Before implementing the scheme, the government needed to have carried out a survey to establish the likely number of needy students among the 2013 Uganda Advanced Certificate Education lot to guide the process of compiling a list of possible applicants.
With glaring poverty levels in the country, it will be difficult for the Higher Education Students’ Financing Board to select the ‘needy’ students through a “Means Test” scorecard as highlighted in the implementation plan of the Higher Education Students’ Financing Act, 2014.

The guidelines governing the loan scheme should be reviewed if more students are to benefit and get value from the money allocated to them.