Varsities seize papers of graduates over govt debt

What you need to know:

The situation has been worsened by the government’s failure to remit money to universities that have trained the students studying on the loan scheme.

At least 1,200 graduates who studied on the government loan scheme will find difficulty searching for jobs, or pursuing higher degrees,after universities withheld their transcripts over arrears.

Highly-placed sources said the Shs12.7 billion debt is owed to the institutions by the government through the Higher Education Students Financing Board (HESFB), which administers the loan scheme instituted in 2014.

The government rolled out the programme to enable talented students without means to bankroll degree and diploma qualifications, and repay on finding a job upon graduation.

Some 13,405 applicants have benefitted, with 4,500 of them graduating over the past. These are expected to reimburse up to Shs1 billion.

However, limited employment opportunities coupled with ineffective tracking mechanism has meant jobless beneficiaries are unable to pay while hundreds are untraceable.

The result is that the government has received much less from beneficiaries than planned, yet the refunded cash is to be used as a revolving loan for other needy students.

The situation has been worsened by the government’sfailure to remit money to universities that have trained the students studying on the loan scheme, according to HESFB officials who asked not to be named in order not to appear as disgracing their employer.

According to one of the officials, the defaults worsened from 2019, piling the scheme’s debt portfolio to the current Shs12.7 billion.

This has prompted participating universities to target the beneficiaries, and not the government, by withholding their degree and diploma transcripts pending clearance of the arrears.

"We have a memorandum of understanding with institutions that admit these students. These students study for free, and when the government releases funds, we pay the institutions,” another official of the agency administering the loan programme said.

The government has been defaulting on the releases, the official said, leading to the huge debt.

“As a result, institutions are withholding the transcripts of students who graduated until we clear their tuition to zero balance. The numbers were high, but [these] have since reduced after we paid these institutions some money,” the source added.

The institutions named in retaining papers of the affected graduates are, among others, Makerere University, Kampala International University (KIU), Kyambogo University, Busitema University, and Kabale University.

According to sources, the government owes KIU the highest in the arrears, of Shs6.8 billion, followed by Makerere University at Shs5.5 billion.

Pawns?

Makerere University Secretary, Mr Yusuf Kiranda, yesterday confirmed that they were retaining academic documents of the loan scheme beneficiaries to compel the government to pay up.

“We have been allowing these students to sit for examinations without paying all their tuition dues. However, the only leverage we have [now] are their academic [papers]; so, they cannot be released until this money is paid,” he said.

Similarly, KIU Vice Chancellor, Prof Mouhamad Mpezamihigo, said that the affected students should put HESFB under pressure to pay their tuition arrears if they want to access their transcripts.

“We have been allowing these students to study all through without paying their tuition. If we release their transcripts, who will follow them up?” Prof Mouhamed Mpezamihigo said.

Both institutions did not provide the number of students whose academic documents they are withholding.

Prof Eli Katunguka, the Kyambogo University vice chancellor, said that he was not aware that the transcripts of loan scheme beneficiaries were being retained but, without giving figures, acknowledged the arrears.

Leaders of the universities said granting the loan scheme beneficiaries the rights to take exams without paying tuition, was aprivilege because other privately-sponsored have to clear payments to zero balance before sitting for the papers.

A memorandum of understanding with HESFB obliges the institutions to permit students to study and sit for exams, with payment made as and when the government releases the money

Our investigations show that the affected students will have to wait longer since the government did not approve the money for arrears for the institutions in question this new financial year, which started on July 1.

HESFB Executive Director, Mr Michael Wanyama, said the arrears remain unfunded in this financial year, and the board is working on finding ways to allocate the available funds to clear some of the institutions' debts.

The failure to find cash this month prompted the government to run an advert in the main newspapers, announcing a freeze on the student loan scheme effective this financial year.

The reason, according to insiders, is mounting budget shortfalls and the government did not want to take on more students over fears that the domestic arrears would be pushed up.

Whereas majority of the institutions are withholding papers of graduates, Gulu University in northern Uganda has taken a different path.

Its Vice Chancellor, Prof George Ladaah Openjuru, said the students are victims who should not be further penalised and that the target should be their sponsor, in this case the government.

“We have many students who are studying on study loans and other government scholarships. However, all those who completed their studies were given their academic documents because it is not their problem. For us as the institution, we follow the sponsors, not the students,” Prof Openjuru said.