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 :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.
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.
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.