Education and Sports Minister Jessica Alupo last week tabled the Higher Education Students Financing Bill, 2013. Sulaiman Kakaire explores the bill's salient features, including clause 22, which requires loan recipients to start repaying at least a year after completing their courses, with or without a job.
Published in the Gazette of July 19, the bill establishes the legal framework for a scheme to finance students who wish to pursue higher education in Uganda.
It also establishes the Higher Education Students Financing Board and a fund to finance the scheme, among other things.
Although the government sponsors 4,000 students at university, tens of thousands of other students have trouble financing their education. In this year's state-of-the-nation address, President Museveni announced that government would give loans to students joining university. Shs 6.5bn was subsequently committed to this scheme in the budget.
The fund will be part of the Higher Education Students Financing Fund (HESF), as established under the proposed law. The HESF includes money appropriated by Parliament for the scheme, grants, donations, endowments or loans received for the scheme, repayments and interests.
Besides providing for students' scholarships, the bill, under clause 15, provides for the establishment of the higher education students financing scheme (loan), which shall cover the tuition, functional fees and research fees.
Who is eligible?
Scholarships will be awarded for higher education in a field of study determined by the board as critical to national and economic development. According to clause 19, the loan scheme is available for only Ugandan students attending institutions of higher learning accredited by the National Council of Higher Education.
The board shall declare courses that qualify for funding. While selecting the courses they will take into account the government policy regarding higher education. This clause could mean that there will be a strong bias towards science courses, as reflected in current government scholarships.
After receiving applications for loans or scholarships, the board would verify the information supplied, before giving its feedback on the application, within 21 working days. The board must give reasons for rejecting an application, and any aggrieved applicant may appeal to the minister.
But successful applicants would then enter a legal undertaking with the board, specifying the amount of money or scholarship awarded. Where a student changes the course, the board shall not be responsible for the additional expense though it has to be notified within 14 days after the institution has approved the change.
Under clause 17, the student loan shall be repaid with an interest which shall be determined by the Finance minister. Under clause 22, a person who has received a student loan shall start repaying the loan and interest at least one year after completing the course.
"For the avoidance of doubt, subsection (1) shall apply whether the person is employed or not," reads clause 22(2).
However, a loan recipient may start repaying the loan before the time specified if they are in position to pay. In addition, the board shall inform the person who received a student loan in writing to start repayment a month before the start date.
"Where a person is not employed and has no income from which deductions may be made for the repayment of the student loan, the person shall within 14 days after receiving the notice under (4) in the prescribed manner, inform the board accordingly," reads part of the bill.
It is mandated for the board to verify the information contained in the notice. Repayment installments will be deducted from the recipients' salary or wages or income, which must not exceed 30 per cent of the net income.
Under clause 24, a student loan beneficiary must inform the board of any employment within 14 days of taking up the job. Under clause 25, any employer who fails to deduct money as repayment, or inform the board about employment of student loan beneficiary, commits an offence and is liable upon conviction to a fine not exceeding Shs 4.8m or up to 10 years' imprisonment or both.
A student who gives false information to the board commits an offence punishable with a fine of Shs 960,000 or 24 months' imprisonment.
The scheme will be managed by the board, chaired by a person with at least 10 years experience in management. the board will also have a representative from the National Council for Higher Education, institutions of higher learning, the ministry responsible for Higher Education, ministry of Finance, students associations, employers' union, private sector as well as an executive director, who will be secretary to the board and in charge of the secretariat. Members will be appointed by the minister responsible for Education.