The students’ loan scheme should be fully automated in order to reduce administrative costs of the scheme, the Federation of Uganda Employers (FUE) has proposed.
This and other proposals on the Higher Education Students Financing Bill, 2013 were presented to the parliamentary committee on education by FUE officials on Wednesday.
“Basing on the way the Bill is structured there is likely to be high administrative costs on verification exercises,” Head Research and Policy, Opio Douglas said.
He explained that automating the loan scheme also helps in sending information such as automatic reminders to beneficieries about dates for loan repayment. “We are therefore proposing a comprehensive database system,” Opio told the committee chaired by Jacob Opolot (NRM).
Currently, the committee is interfacing with various stakeholders over the Bill. The loan scheme is intended to provide financing to Ugandan students who have qualified for higher education in recognized institutions of higher learning but are unable to support themselves.
Only Ugandans who have been admitted for accredited courses in institutions recognized by the National Council for Higher Education are eligible to benefit from the loans.
Flanked by FUE Head of corporate Affairs Manafa Shaffi, Opio said a mechanism should be put in place to ensure proper loan recovery bearing in mind the tendency for people to take government loans less seriously. “The recovery mechanism should be robust,” he said.
“There should be an incentive for the beneficiaries to create self -employment or to look for a job. It would also be useful to develop other government programmes that provide intermediate employment for beneficiaries,” Opio said.
The Bill provides for repayment of the loan, one year after completion of higher education for which it was given. The loan attracts interest whether or not the person is employed.
FUE proposed that the Bill should include provisions on failure to pay the loan, students who repeat and safeguards to ensure that the loan is actually being spent on higher education.
They also proposed that the Bill should address what happens when a loan beneficiary fails to complete the course for which the loan was secured. They also suggested that it should cater for a situation where the beneficiary secures employment abroad.
Rubaga north MP, Moses Kasibante expressed concern that some employers do not give appointment letters to their employees and wondered how the loan beneficiaries would be followed up.
Christine Acayo (Nebbi) asked why for a long time now there is no minimum wage. She said some graduates earn as little as Sh200,000. “There is a lot of injustice,” she said.
FUE officials promised to come up with a more comprehensive report on the Bill.
By Joyce Namutebi, The New Vision
