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Sunday, 14 February 2010

Funding higher education

Without doubt the biggest challenge facing higher education is funding. In many countries it is accepted that higher education delivers benefits beyond the individual and therefore it is susceptible to under-provision if we relied on market forces alone. Until not too long ago for many African nations this meant government shouldering the full cost. Increasingly, we  now have other countries following Kenya, Zimbabwe and other countries towards greater role for private funding. It appears from the excerpt below that Zambia has been considering similar initiatives but without success :

Bursaries Committee Vis-à-vis Student Loans, Government Assurance Report (2009), National Assembly, Excerpt :

On 14th February, 2006, the Hon Deputy Minister of Finance and National Planning made the following undertaking on the floor of the House: “Mr Speaker……the Bursaries Committees has taken steps towards strengthening its operations to ensure that students financial requirements are adequately met. The Committee has entered into Memorandum of Understanding on behalf of Government and the Finance Bank to allow the bank administer the funds under the loans recoveries of funds given to students at the two universities.”

In his update, the Secretary the Treasury reported that in 2004, the Government initiated the reforms of the bursaries programme with the aim of replacing it with a "Student Loan Scheme" which would operate as a revolving fund for students at universities. The new loan scheme was planned to be administered through Finance Bank Zambia Limited which currently was disbursing funds on behalf of the Bursaries Committee.

During the financial years 2005 and 2006, the Bursaries Committee undertook study tours to Kenya and Zimbabwe respectively in order to understand how the student loans schemes operated in those countries. Those tours were very important in order to provide insight and understanding to the Bursaries Committee and those in turn would strengthen and widen the scope of the implementation of the new student loans scheme in Zambia. Following the study tours, the creation of the Zambia Higher Education Loans Board (ZAHELB) was proposed and later adopted by the Committee. The Board was to build on progress made so far in financing higher education in Zambia and perform the following functions:

a) establish mechanisms to recover mature loans;
b) establish a “tracer system” by using an identification system such as the Green National Registration Card Numbers as a tool to trace loaners or beneficiaries of the new loan scheme; and
c) establish a suitable system and instrument (Loans Application Form), capable of assessing applicants’ level of need by analyzing their financial status.

As a result, the above-mentioned proposal was finalised by the Committee and has been submitted to Cabinet for the creation of the above stated Board and implementation awaits Cabinet approval.

Committee’s Observations and Recommendations

Your Committee observe with concern that the Students’ Loan Scheme under the Bursaries committee will take long to be implemented as modalities of how to administer it were still on the drawing board. Your Committee, urge the Government to urgently approve the Students’ Loan Scheme to benefit the students, especially those from the vulnerable groups.
There are a number of a ways of doing this, but the approach appears to use an existing banking institution (shouldn't this be auctioned?) rather than creating a separate student loan company (e.g. the UK model). That aside it is good to see they have identified the key issues - tracing people; means testing; and repayment. In the past people have been most concerned about "tracing people" - the model appears to have solved that.

I would also like to see GRZ permanently ensure that "immigration officers" are able to arrest people returning to the country who have not paid back their debts (this appears to be the only credible threat - of course not without costs). If you borrow student finance and go abroad without paying you must be held accountable (e.g. by facing arrest on your return).

The other problem which has previously been raised is that people would not be able to pay back debts because they would be unemployed. I think if you have taken out a loan you would become a more responsible student. You will do all you can to take a course that will be useful in the long run. If people are able to fund their education, I suspect they would even be more responsible citizens. As I have always said, public provision whilst useful does make for lazy citizens. The other point of course is that such loans could be linked to certain courses. While I have no problem with someone taking a degree in catering or hotel management, if such courses are able to lead to a viable career then clearly the ability to repay would be limited.

7 comments:

  1. The biggest problem which will always haunt Zambia is the failure to quickly amend such policies. What reason can one give for Government to give free money to Students who have the potential to be employed and pay back on one hand and yet the younger generations roam the streets.

    Pat

    ReplyDelete
  2. Is there an update on how this is going? The article sited progress from 2006. Additionally, what measures could be made to provide incentive for students to remain and work within Zambia once graduated? It seems that there could be danger of an increasing number of qualified graduates from various economic backgrounds in Zambia (the kind of perspectives that are needed to lead) leaving the country for higher-paying positions abroad. Does anyone know of such a campaign going on to encourage graduates to remain and use their skills to develop Zambia?

    ReplyDelete
  3. Sarah,

    I should have made this clearer...

    The report was produced in 2009, in response to a query initially raised in 2006.

    It therefore represents the current position. Prior to finalising the Government Assurances Report 2009 the Ministry of Education and others were asked for updates. The article represents where we are currently.

    With respect to what is being done - the same report suggests something is on the radar but without concrete steps:

    Benefiting from the brain drain..

    ReplyDelete
  4. Economic growth will incentivize students to stay in Zambia after graduating. Africa's robust economies such as Ghana, Botswana and South Africa are beginning to see an unprecedented brain gain:

    http://www.newsweek.com/id/233501

    ReplyDelete
  5. Dear Sir/Madam:
    I am Kezias Newa reside in Chililabombwe at house number H2/15 kafue road, mine township. i am looking for higher education Student Loan or bursary. i completed grade 12 at Milemu High School in Ndola, i am an orphan and a prospectus student at Cambridge international College in Global Marketing Marketing, but due to lack of sponsorship i am un able to further my education, hence i am appealing to your organization to help me to get a student loan or bursary. if any chance to get student loan or bursary is found please let me know and i depend on your help. i can be contacted on +260977454869 or email address n.kezias@yahoo.com

    With Best Regards,
    Newa Kezias

    ReplyDelete
  6. Dear Sir/Madam:
    I am Kezias Newa reside in Chililabombwe at house number H2/15 kafue road, mine township. i am looking for higher education Student Loan or bursary. i completed grade 12 at Milemu High School in Ndola in 2006, i am an orphan and a prospectus student at Cambridge international College in Global Marketing Management, but due to lack of sponsorship i am un able to further my education, hence i am appealing to your organization to help me to get a student loan or bursary. if any chance to get student loan or bursary is found please let me know and i depend on your help. i can be contacted on +260977454869 or email address n.kezias@yahoo.com

    With Best Regards,
    Newa Kezias

    ReplyDelete
  7. Dear Sir/madam:
    My name is Mainza Harrison,currently residing in Kabwe at 21 Nalikwanda Street Higridge. I completed school in 2012 at Rusangu secondary school in southern province, Monze town outskirts. I passed in all nine subjects I sat for. I have 7 distinctions and 2 merits. Unfortunately I have no adequate fiances to further my education to study medicine at Monash University in Australia. Its for this reason that am pleadingly asking for any financial support that you may render unto me. Honestly I am very hardworking and premotioned to all my educational and personal goals. If there is any way, it may be a study loan or bursary even if it means doing some work for you then in turn you finance my studies i will accept it gladly and do my very best to come out with impressive results.my day time cell number is +26 0978731647 or +26 0966620598.
    thanking you in advance,
    MAINZA HARRISON.

    ReplyDelete

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