THINKING ALOUD : Let’s face it, HESLB hasn’t lived up to its vision

I went to the university during the good old Nyerere’s era, I recall vividly that February was the boom time; in essence I was paid by the government to go to the university.

Times have changed and indeed something like the loans board (HESLB) was needed however what was expected of HESLB has not happened. It was established by Act No 9 of 2004, inaugurated by the Higher Education minister the March 30, 2005 and became operational in July 2005.

In 2015-2016 there were 2,192 ghost students, thus since it became operational some 10 years back by simple arithmetic it has funded about (2,192*10) 21,920 (maybe more) ghost students and how much is this in monies I leave it to the reader to calculate. My business friend brings this up always-why should I pay the prescribed taxes, as a worker I have partly funded this scam since I did not have the option my business friend had.

When I was teaching at Muhas I saw in my class students whose parents were ministers, doctors, engineers etc. These were children of rich parents—they were not needy but were still given loans. What a paradox!

In addition many parents spend a lot of money for kindergarten, extra tuition and private primary schools but for university they become recipient of loans.

Mission. to put in place a well managed and sustained revolving students’ loan fund to enhance access to higher education by needy and eligible Tanzanian students’

Outstanding loans (unpaid loans) are now in trillions of shillings-where is the revolving fund reflected in their mission. Again HESLB has not lived up to its mission and has totally failed.

Core Values. The core values, which will guide HESLB in achieving its objectives, are; team work, transparency, accountability, commitment, integrity, and equity.

None of these core values have been up held, this is a mockery and parody. Even the twelve enlisted functions have not been realized. It is only in this motherland and wonderland that HESLB is tolerated and is in existence, thanks to the Presidents of 3th and 4th phase of governments since HESLB is their creation

President Magufuli inherited this white elephant-HESLB. He has given his directions and wants strict loan issuance. As head of state he has clearly pin pointed the problems viz improper allocations of students in universities, loans being issued with favouritism, failure to meet criteria when issuing loans, ghost students and opening universities before the government has reimbursed the loans to students accounts.

Moreover, he said, education stakeholders should meet and foster the best way to reduce the mushrooming of universities in the country. Importantly responsible authorities should come up with best mechanisms to recover loans from higher learning institutions loan beneficiaries. Out sourcing to debt collecting agents may not be the best solution. It is timely for HESLB to bring together the financial gurus and relevant stakeholders to come up with proper management and mechanisms that will assist the HESLB to collect its money from loan defaulters.

A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries.

There is widespread agreement that loans should not impose excessive burdens of debt. There is no agreement about what represents a “reasonable” level of debt, but Sweden and the Federal Republic of Germany have recently increased grants to avoid excessive debt burdens. Evidence in the USA suggests that most students do not believe that current debt levels are too high, but there must be special provisions for those with very low incomes, or the unemployed.

Most loan schemes allow for postponement of repayment if graduates’ incomes are very low, and with this provision loan burdens at present do not seem excessive — graduates usually pay about 4 to 5 per cent of earnings to repay loans. Thus HESLB has to pull up its socks and improve in the near future.

Experience in industrialized countries shows that student loans do work, but that a mix of grants and loans seems desirable.

Conditions in industrialised and in developing countries are very different: in particular labour market conditions and the capacity of banks and other financial institutions to organize loans and ensure repayment.

Zulfiqarali Premji is a retired MUHAS professor currently living in

Canada 

[email protected]