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Loan scheme needs new approach

By Okello Lucima

Access, equality, and equity must underline post-secondary education funding

The government intention to kick-start students’ loan schemes has drawn both applause and skepticisms.

This promise has for a long time been on the NRM policy shelf and basket of empty pledges, the government had to do something symbolic for public consumption. What better timing and forum to orchestrate this, than the State of the Nation and the National Budget speeches.


Implementing the students’ loan scheme now is nothing but political gimmicks calculated to pre-empt derisions of ‘unfulfilled promises’ in 2016.   First, Parliament has not enacted any law to operationalise the scheme.

Second, there are no infrastructures, at the Ministry of Education, universities, and financial institutions, which should have to assess eligibility, and disburse, and administer these funds.  The need to partner with private financial institutions to deliver this programme is crucial.

The government as guarantor of the loans,, must partner with banks, and conclude consultations with universities to agree eligibility criteria and amounts per student and categories of needs instead of making unilateral and arbitrary decisions on these issues.

In my view, assessment of needs and eligibility must be left to the respective universities and institutions where a student is registered.  Students then take their documents to respective banks, which in turn remit amounts for assessed tuition and fees directly to the institution and the portions for scholastic materials and personal expenses deposited into a student’s personal account.

To suggest Shs 1 billion will be spent on administering the scheme, and each student will receive on average Shs4 million shillings, is a joke.  The cost will be much higher.  In any case, starting with Shs4 billion shillings for 1000 students only and budgeted strictly for tuition alone, without considering living expenses, is nothing to write home about.

Additionally, before the government can start the students’ loan scheme, there is great need to overhaul existing models of state funding of post-secondary education.

In the past, UPC administrations fully funded all post-secondary education and trainings, including meeting the costs of scholastic materials and transporting students from and to their districts of origins.

This ensured equity and equal opportunities in accessing post-secondary education for all young Ugandans irrespective of their social backgrounds.

But for the past 27 years, the NRM government’s  education policies, particularly the funding of post-secondary education,  have been segregative, discriminatory, and fostered inequalities by deliberately skewing access and quality  towards ability to pay, thereby limiting opportunities to privileged and connected few.

Therefore, contemplating a students’ loan scheme without scrutinising these existing injustices is deplorable. For the scheme to work, the State House Scholarships and current model of state funding of post-secondary or tertiary education must be scrapped. These two funding structures are discriminatory.

State House scholarships have no known criteria for eligibility.  It has only benefitted families and students who come from NRM backgrounds and those connected to state power and influence. It lacks transparency and accountability.

Equally, government sponsorship at universities also serves as breeding ground for inequality and inequitable access.

First, those who benefit are students from wealthy backgrounds who go to the best schools with prohibitive fees beyond the means of ordinary Ugandans. Second, the government sponsorship scheme is only available to and tenable at state universities, which excludes students at private universities that might actually be offering superior courses and training.

Third, to continue the current model of state funding of post –secondary education side-by-side with the students loans scheme, means that children of the wealthy and connected will continue to grab all available places for state sponsorship at universities, without having to pay back a cent.

But students from poorer backgrounds who go to poorer schools, who will perform poorly and not qualify for government sponsorship, will have no option but to take loans to fund their post-secondary education and will be saddled with loans repayments burdens after their studies.

Given the discrimination, cronyism and influence peddling in accessing jobs and opportunities that is pervasive under the NRM today, we can be sure that these students from poorer backgrounds will have no jobs at the end of their education, and  consequently unable to repay their loans.

The import of this is that, carrying loans they cannot repay because they have no jobs, the banks will send the bailiffs calling, and such students will be more likely to lose personal and family possessions to predatory and poorly regulated financial sector.

The discriminative, segregative, and inequality- engendering access State House scholarship and current framework of state funding of university education should be dismantled.

The monies from them should be converted into a National Grants, Bursaries and Scholarship programmes that benefit all Ugandan citizens who want university or post-secondary education, wherever they may be enrolled; at state or government universities; within and outside the country.

To access these grants, bursaries and scholarships , one would have to be assessed  and qualify on the bases of need, academic excellence and promise, and identified disciplines, subjects, and fields which are underdeveloped, or national priority areas  that need special incentives  or to provide opportunities for certain social groups.

Then these can be complemented with the national students’ loans scheme for students who cannot afford to pay it. Again, this must be made available to every Ugandan student at any institution, government or private, within or outside the country.

The requirements must be that one is registered at a post-secondary institution, needs financial assistance, and undertakes to repay the loans over a specified period after the completion of their studies. Unique personal circumstances, such as adult students who have other responsibilities, especially female single parents, should be considered.

The government’s suggestion that students who benefit from the loans or any government schemes must be required to work for the government for a certain number of years is obnoxious. It amounts to forced and indentured labour and slavery, which is an immoral and inhumane practice that socially conscious societies abolished centuries ago.

Draconian measures such as ‘bonding’ to government are unnecessary. If we want national service schemes, it must be for all Ugandans of certain age and categories, not just students poor enough to seek state assistance in funding their education. If there is no money to aid every prospective student who needs assistance, the idea should be shelved.

Okello Lucima is Party spokesperson at Uganda Peoples Congress (UPC)

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