Global Courant 2023-05-04 22:18:21
Download logo
Lawmakers on the Committee of Commissions on Statutory Authorities and State Enterprises (COSASE) have told management of the Higher Education Students’ Financing Board (HESFB) to prioritize recovery of the student loans.
The MPs objected to HESFB’s lack of a comprehensive and streamlined process for recovering student loans and the high likelihood of HESFB failing to recover funds from defaulters.
Hon. Yusuf Nsibambi (FDC, Mawokota South County) said HEFSB should not pamper the students who take out the loans because the money should be recovered for others to use.
He said it is their prerogative to choose to take out a loan and therefore must be prepared to pay back or suffer the consequences of defaulting.
“These loans are not compassionate or soft loans. We need a durable and reliable recovery system, and I’m not convinced HESFB has one,” said Nsibambi.
MP of Kyadondo East, Hon. Muwada Nkunyinji suggested that, as part of the recovery, beneficiaries of the student loans provide a service to the country for a partial payment, with the remainder of their earnings on the loans being repaid.
He insisted that HESFB must make efforts to recover all borrowed money as it comes from taxpayers and must be treated costly.
The deputy chairman of the committee, Mr. Lucy Akello added that some measures can be taken to recover the loans and gave an example from Kenya where one must get a loan approval certificate before running for political office or taking a leadership position.
Christopher Birungi, the director of finance and administration at HESFB, said the loans they issue are secured with a one percent loan protection fee paid by each student each year.
Birungi added that the money collected as a loan protection fee will be put into a risk-free investment specifically held in a fixed deposit with Centenary Bank.
He said loan repayment has a time frame of five to 11 years, depending on the program.
Birungi noted that they are working with the Federation of Uganda Employers and the Credit Reference Bureau to ensure loan repayments by employers of students with loans.
He added that HESFB is currently engaging the Education Service Commission to prioritize employment for students trained as teachers under the loan scheme.
Distributed by APO Group on behalf of the Parliament of the Republic of Uganda.
This press release is issued by APO. The content is not checked by the African Business editors and none of the content has been checked or validated by our editors, proofreaders or fact-checkers. The publisher is solely responsible for the content of this announcement.
