The state minister for higher education, Dr John Muyingo, has urged beneficiaries of the student loan scheme to repay their loans to enable other Ugandans benefit from the initiative.
Muyingo said this can be achieved with assistance from employers of the loanees to ensure that the Higher Education Students Financing Board (HESFB) recovers the funds successfully.
“The board has been in existence since April 28, 2014 and four cohorts have been successfully financed but little progress is being made on the repayment,” Muyingo said. “It is, therefore, pertinent that modalities are established with these employers to enable the board run its mandate smoothly.”
The state minister was speaking during the signing of a Memorandum of Understanding (MoU) aimed at effective recovery of student loans between the HESFB and the Federation of Uganda Employers (FUE) at the Uganda Media Centre last week.
Muyingo said the MoU would see HESFB become a member of the federation to enable easy tracking of the beneficiaries. Consequently, a large portion of the students would be supported.
The student loan scheme is a fund intended to finance promising Ugandan students, who qualify for higher education but are unable to support themselves financially.
Since inception in 2014, HESFB has distributed loans to 5,259 students. Of these, 590 students have completed their studies. Students are given a grace period of one year implying that the outstanding loans are due with effect from July 2018.
Michael Wanyama, the executive director HESFB, said it was necessary to put in place procedures that ensure and entice students to pay the outstanding obligations.
“The MoU will go a long way in ensuring that loan beneficiaries are easily tracked and repay their loans promptly.
However, some students are already repaying their loans during the grace period,” Wanyama said.
On behalf of FUE, Nicholas John Okwir, the federation chairman, said the MoU would help government to reduce on costs of searching for loanees upon employment.
“Where it is discovered that a beneficiary’s loan is due for repayment, we shall inform HESFB of the employer and address and position of the beneficiary to enable HESFB recover her funds,” Okwir said.
He added that FUE will also prepare and furnish HESFB with quarterly reports for all employers as well as undertake to implement all penalties imposed on non-compliant employers towards remitting repayment fees.
On November 30, HESFB and FUE will meet chief executive officers of various organisations to sensitise them on how to implement the student loan scheme repayment process.
FUE was established in 1958 to, among others, enhance employer’s competitiveness through policy advocacy, promotion of best human resource and employment relations and provision of business development services. Currently, FUE has about 520 members in formal employment.
nangonzi@observer.ug