Loan scheme for higher education taking shape

Loan scheme for higher education taking shape

By Al-Mahdi Ssenkabirwa (email the author)

Posted Monday, May 16 2011 at 00:00

Poor but bright students will have to wait a little longer to access loans to pursue higher education after government announced that it will take it nearly two years to introduce the education loan scheme.
Though two years might seem a long wait, it will come as a major relief when it finally happens for parents and students who have waited for decades.

It emerged on May 2 that government had instituted a team of experts to ensure that all the necessary legal, financial and institutional frameworks are put in place.

The team includes Mr Michael Wanyama who will serve as coordinator for the secretariat, Timothy Ojala (legal officer), Samson Wanangwe (IT system analyst) and Peace Bategeka (Administrator).

“We expect this team to finish its work in 18 months so that we embark on the implementation phase. This scheme has dragged on for so long and we must all work around the clock to ensure that it becomes a reality,” Ms Namirembe Bitamazire, the education minister, said during a consultative meeting with the experts on May 3 at the ministry board room.

The team, according to Ms Bitamazire will among other tasks draft the Students Loan Scheme Bill drawing lessons from Kenya, Rwanda and Tanzania where the scheme is already operational.

“Once this law is in place, sourcing for resources to operationlise the scheme won’t be a problem,” the minister said.

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She said the scheme will start after the 2011/12 fiscal year when government implements free A-level education which President Museveni pledged during the recently concluded general elections.

The financial framework, according to Mr Charles Kitonsa, the spokesperson ministry of education would stipulate the sources of the initial fund, repayment and recovery mechanisms, while the legal framework would spell out the laws that will govern the operationalisation of the scheme.

During the meeting, some members suggested that the scheme should only benefit poor students offering expensive science courses, but the minister said this would be decided when consultations are completed.
Mr Kitonsa said the selection of the experts was done on the recommendation of Ernest &Young, one of the world’s leading professional services organisations which help companies to identify and capitalise on business opportunities.

In Uganda, Kampala International University is the only institution implementing a private loan scheme after partnering with Orient Bank.
Under the scheme, KIU students are offered loans at 2 per cent per annum interest rate .The loan must not be more than Shs6 million and has to be repaid within a year, in two installments, according to the set university loan scheme guidelines.

Mr Issa Matovu, an educationalist said the scheme is long overdue and urged government to speed up the process. “For a long time, higher education has been a preserve of the rich and we pray that this scheme comes and the poor who normally miss chances of joining university also benefit,” he said.

However, he warned government against putting the funds in the hands of individuals who might end up misusing the funds. “There is need for close supervision of the fund right from the start such that the scheme achieves its ultimate goal.” He said.