Higher education financing

COMMENT: Michael O. Wanyama

The Government of Uganda introduced the student loan scheme in 2014 primarily to increase access to higher education and support students who may not afford higher education.

To achieve its objective, the Higher Education Students Financing Board was established by an Act of Parliament No. 2 of 2014 as a body corporate mandated to provide Loans and Scholarships to eligible citizens of Uganda to enable them access Higher Education.

The Scheme is meant to support needy students access Higher Education. In the initial year of 2014/15, the Board offered loans to only undergraduate students in twelve(12) participating universities (5 public and 7 private chartered Universities) totaling to 1201 students.

For the current academic year the Board increased on the loan beneficiaries and participating higher learning institutions. It awarded loans to 1276 beneficiaries and increased the number of participating universities to fifteen (15) and for the first time awarded loans to student pursuing diploma courses numbering 200. The beneficiaries on the diploma programmes are spread in 23 other tertiary institutions.

The Board is providing excellent opportunities to students who would have otherwise failed to access higher education due to financial constraints.

The government realises that higher education is important as part of the government education systems contributing to economic and social outcomes for the country. Higher education produces the advanced skills and knowledge that this country needs. It also produces new knowledge and generates innovation, both of which are vital for greater productivity and economic growth.

Various researches have shown that Higher Education has important social benefits of enhancing the students’ employability, health and social outcomes. It facilitates social mobility and strengthens societal cohesion. Higher education continues to help our country tackle global challenges through both research and teaching and learning.

The Governments efforts to support science and technology programmes is in the right direction since the country is still registering a serious shortage of manpower in sciences. While higher education is highly recognised as a panacea to social and economic development, it is also increasingly faced by many challenges such as the growing population; massification of students; quality of the products; high attrition rates of students due to funding challenges; Research funds; growing expectation of cost containment of higher education and challenges to traditional modes of education delivery.

Financing higher education also presents opportunities to private stakeholders like banks

These challenges require the higher education administrators, academicians and practitioners to continuously engage in exchanging ideas and best practices to solve them.

Government so far is on the right track to fund the needy students to meet the high demand of education by the brilliant but needy students. The critical challenge apparently is adequate financing to meet the demands faced with scarcity of public funding.

For the current academic year the Board received 5000 applications but was able to give only 1276 students loans leaving out 3724 students. This represents 25% success rate.

Government has promised to plough funds into the scheme and this is a good step in ensuring sustainability of the scheme and will enable the so many disadvantaged students to access higher education.

However, the government can no long afford to give free higher education as the budget becomes increasingly squeezed.

The parents and students must embrace the cost- sharing mix to meet the costs of higher education. Other stakeholders must come in to aid the scheme.

It is worth noting that financing higher education through student loans has been in existence worldwide and in Africa, there are a number of countries that are managing the student loan Schemes including Kenya; Rwanda; SouthAfrica; Ghana; Botswana; Nigeria; Tanzania; Zambia among others.

The majority of the loan schemes target the poor and the ethnicity groups that may not afford higher education costs. Students are given loans to cover the pedagogical expenses such as the tuition fees and functional fees. Different countries have different models. While others are needy based, others are expanded to cover a wide range of expenses for instance the Student Loan Trust Fund-Ghana covers both the academic and non- academic costs.

A number of countries are at the stage of reforming the existing Bursary, scholarship or loan schemes and these include Rwanda Education Loan Board; Malawi; Uganda had lagged behind in East Africa but has now come on Board.

Student loan schemes are feasible but its success is largely hinged on sustainable resources; sound legal framework that has strong provisions on repayment; sound ICT infrastructure that ensures transparent loan allocations, disbursements and data management; highly qualified staff and a highly transparent Board.

The good news is that the government opened up the higher education landscape attracting private players’.This has enabled parents that can afford to pay fees for their children to access higher education with ease.

From a single University in 1990, according to National Council for Higher Education, there are over 40 Universities (9 Public and 34 Private) and a total of 141 other Tertiary Institutions (55 Public and 86 Private).

In terms of student enrollment, there are 157,000 students in Universities of which 61% (97,000) are in 6 Public Universities while 39% (60,000) are in 31 Private universities. The Gross Enrollment Ratio (GER) has moved to 6.1% from 4.97% in 2007.

The NDP had envisaged that the Gross Enrollment Ratio will be raised from 4.97% to at least 15% in 2014. There is still a lot of hope in achieving the vision with the introduction of the student loan scheme.

At the tertiary level, dozens of private Tertiary Institutions are complementing Public Institutions in accessing students to Higher Education. Privately sponsored students’ numbers in both Public and Private Institutions have increased enormously and have increasingly become vital for absorbing demand and enhancing access.

There are a number of Stakeholders who have recognized that financing higher education should not be a responsibility of government alone and have funded a multitude of students which is highly commendable. Many more stakeholders need to come on board as part of their Corporate Social Responsibility to support the needy student access higher education.

For banks, this is an avenue for expanding the loan products and client base.

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Michael O. Wanyama is the EXECUTIVE DIRECTOR HIGHER EDUCATION STUDENTS FINANCING BOARD