Students’ loans welcome but . . .
Leroy Dzenga Features Writer —
Tertiary students have been decrying the absence of financial assistance in their quest to attain their respective qualifications. The calls had grown louder in the wake of the current economic terrain and student unions have been pushing for this end for some time now.
An answer to their requests might be nearer than they had expected as Professor Jonathan Moyo, the Higher and Tertiary Education Minister, recently announced that plans for introducing a student loan scheme are at an advanced stage. Speaking at the just ended ZANU-PF annual conference in Masvingo, Prof Moyo said the scheme would be structured by the apex bank.
“The ministry has engaged the Reserve Bank of Zimbabwe to structure a student loan scheme for higher and tertiary education institutions to be run by financial institutions with proven micro-financing capacity,” Prof Moyo said.
The initiative will assist parents and students who are facing hurdles in paying their tuition fees. Prof Moyo has been driving the idea of producing meaningful human capital with pragmatic skills which work in the real world and he expects the relaunch of the students’ loan to be a step towards the goal.
“No country anywhere in the world has industrialised and modernised its economy without technology and engineering skills taking centre stage and leading the way. It is not possible to create and develop a new industrialised and modernised economy without the requisite skills in the form of human capital. Skills are the engine of industrialisation and modernisation,” he said.
Students have welcomed the idea saying it will be a shot in the arm for the local higher education sector. Their applause is, however, not without question; there are areas they feel the Ministry needs to clarify before they can begin celebrating.
Zimbabwe National Students’ Union (ZINASU) spokesman Zivai Mhetu said successful implementation of the scheme would be an answer to some of the causes they have been pushing as a union.
“If you can check our history we have been calling upon the Government to restore student loans. They will surely come in handy in the current economic times,” Mhetu said.
Mhetu expressed concern on the grant part of the plan, questioning the feasibility of giving out money without expected returns.
“Loans work better because you know that at some point there is a condition to pay back the money. However, a grant is different. There is rarely an option to pay back and I do not see them as a feasible idea in our economy,” he said.
When the 2017 National Budget was announced, the student loans were not mentioned. This has raised questions on the origins of the money intended for the programme.
“The Ministry is saying that they will restore financial assistance to students but it is not catered for in the national budget. If there is a supplementary budget to accommodate it then we welcome it, but if it does not come then we may need to know the source of the money to be used,” Mhetu said.
Mhetu said the loan scheme would be feasible if students are made to pay only after they get employment.
“There needs to be job creation for this idea to work smoothly, where students only pay the loan when they find a job or have a sustainable business project,” he said.
The involvement of banking institutions in the process was also questioned.
“I do not think micro-finance institutions should be involved in administering the loan scheme. They will increase the overhead costs which can deplete the said fund,” said Mhetu, suggesting that universities should handle the disbursement of funds.
Suggestions were made that the disbursement of funds will be indiscriminate catering for students from all tertiary institutions, polytechnics, universities and vocational training centres.
Zimbabwe Congress for Students Union (ZICOSU) interim president Takudzwa Gambiza welcomed the scheme, saying the reintroduction of students loan would be a victory for tertiary education students.
“The students loan is a good initiative which answers the calls we have been making for student empowerment which is in line with the Youth Policy,” Gambiza said.
Most students do not have collateral to secure individual loans with financial institutions, so this scheme will bring an element of reprieve.
“Students need empowerment through loans. Most times students have struggled to access financial assistance. This is a positive development from the Government,” he said.
Like his ZINASU counterpart, he expressed scepticism on the involvement of financial institutions with micro-finance capabilities in the implementation process.
“Some financial institutions create scenarios where their terms are rigid and they harden the process. Their involvement in the process should minimalised,” Gambiza said of the plan to include financial institutions in the disbursement of the funds.
Concerns were also raised on the national budgetary provisions which did not seem to recognise the impending plan announced by Prof Moyo in Masvingo.
“We are still trying to understand how the plan will work because we understand the budget already has a deficit of about $400 million. We do not know if treasury can accommodate the extra cost brought on by the loan scheme,” he said.
Student representatives are set to meet with the Ministry and the authorities to gain an appreciation of where exactly the money will come from.
“We are going to engage them before year end; we want to understand where the money will be coming from. We understand ZIMDEF on its own may not have the capacity to fully fund the idea,” Gambiza said.
The students say over the years, their ears have been hit by high sounding words which have failed to bear any plausible results.
“We are also curious on the feasibility of the intended idea, so that it does not become another promise which raises our hopes in vain,” he said.
Academic experts have lauded the move saying it will improve the face of local academia through improved inclusion of students who may not have been able to afford tertiary education.
Educationist and senior lecturer in the Department of Technical Education at University of Zimbabwe, Dr Peter Kwaira said Zimbabwe can use a template set globally in disbursing student loans.
“The reintroduction of student loans is a positive move, it has worked in so many countries and it can work perfectly in Zimbabwe if the economy allows,” he said.
The concept is not novel in Zimbabwe, there was a similar system which was shelved in the mid-2000s when the economic downturn started.
“We had student loan schemes in the country and they used to work perfectly. How it worked was that a student would get a grant that would help them go through college.
“The student would then pay back the money after they get a job, through salary deductions,” he said.
One of the major challenges with the yesteryear system was that some would default payment as it was administered through the Public Services Commission. Dr Kwaira believes the inclusion of financial institutions will encourage repayments, something beneficiaries took for granted earlier when the schemes were still in place.
“The good thing about the micro-finance companies is that they will help individuals to be more responsible with the money they would have received in form of assistance,” he said.
For the system to have continuity, there needs to be strong mechanisms in place which ensure minimal absconders.
“All government funding programmes have a payback facility for beneficiaries, this will help in making sure other people benefit in a cyclical way,” Dr Kwaira said.
Banking institutions will guard against unscrupulous students who sign up for the loan scheme with intention to dupe the ministry.
“Most importantly, the grants and loans will help in promoting inclusivity within the education sector. Not all parents can afford to send their children to tertiary institutions.
“The loans will go a long way in reducing the number of dropout students in the country,” he said.
In South Africa there is the National Student Financial Aid scheme where students who need financial assistance sign up to gain access to the facility.
Other countries also have government-backed student credit, an instrument well suited to funding higher education. If managed correctly it could deliver increased access, fiscal fairness and academic excellence more effectively than other funding options.
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