The Case of Student Loan Deductions and UPND Campaign Promise!
At the peak of the 2021 General Elections, one key campaign promise that resonated well with the majority youth was the promise to restructure not only our surging national debt but the student loan repayment scheme.
The Republican President Hakainde Hichilema and his spokesperson Anthony Bwalya of the then opposition UPND clearly without any doubt laid this bare to the extent of assuring the public that this will be revised immediately they took office.
It has now been eight months into the UPND led government being in power but there has been no meaningful roadmap to arrest and attend to this. With the only major shake up to the Student Loans Board being it’s dissolution in December 2021, we only wished this was a major priority but alas.
As usual, in my write ups I always endeavour to have a look at a brief history and facts about the subject matter.
In 2016, the government then led by the PF enacted The Higher Education Loans and Scholarships Act of 2016 to replace the old legislation on Higher Education which was never enforced via a vis student loan recoveries.
An extract of the HELSB Act of 2016 reads as below:
An Act to establish the Higher Education Loans and Scholarships Board; establish the Higher Education Loans and Scholarships Fund; provide for the granting, administration, investment, payment and recovery of loans; facilitate the mobilisation of financial resources for loans and scholarships; and provide for matters connected with, or incidental, to the foregoing. [7th June, 2016.]
Upon enactment of this law various graduates from the Public universities being The Copperbelt University and The University of Zambia have suffered massive monthly deductions from their minimal income and this is expected to continue until full recovery.
You will agree with me that majority of these patriotic Zambians are breadwinners of many families.
My colleague and brother Kaluba Sembulo has ably summarised this with numbers as and current status quo below;
New graduate with K185,000 loan due for repayment;
Interest rate of 15% per annum;
High Cost of Living;
Pay As You Earn (PAYE) at 37.5%.
A quick glance at the loan agreement form under the conditions section (3) on the Loan repayment procedures will show you the following;
(e) With a one year grace period after completing studies, the loanee shall commence the repayment of the loan at a minimum rate of 15% interest. However, the loanee is free to repay the loan earlier than the the stipulated period;
(f) The loan shall be repaid at the rate of 25% of the loanee’s basic salary;
(g) In the event that the loanee is not in formal employment, the recovery period shall be ten years.
Colleagues when you critically look at it the section above of the said agreement that students sign up for, you’ll notice that this agreement is not helpful but detrimental to the purpose of having the Loans scheme as a revolving fund to help the high costs of Higher education in our country. One thing I can assure you is that various young people sign up for the Student Loan Scheme because there are no alternatives for the majority poor to access tertiary education and prefer to suffer the financial burdens when in employment.
Whilst we understand that the funds from which students are sponsored are from Tax payers, we also wish to state that the same former students are equal parties when it comes to paying of various taxes.
We opposed to this policy in its current form then and still do! This policy has to be restructured and reformed. We the citizenry were against its rushed enforcement and it’s economically suicidal deduction on the side of the graduates who represent many families and we still hold the same view.
All we need is political will from those entrusted to run the affairs of our Country and especially that they understand the dynamics at play. The President and his spokesperson are beneficiaries of free education at the highest level and it is for this reason that they passionately campaigned to repeal this Law that is clearly retrogressive.
From the current happenings no indication has been given as to when this will be done hence no political will!
We demand and propose the following;
1.) Immediate suspension of the collection of these funds to pave way for a holistic approach that does not economically injure families but rather make economic sense as a policy.
2.) Government to issue grants to the HELSB to cover the deficit that will be created by the suspension of this and not affect the future sponsorship of other deserving Zambians.
Can the relevant authorities look into this issue without any delay. This was actually a promise that has to be fulfilled. We do not want to dwell on who enacted it but rather concentrate on who has the mandate to change this now.
Do we need elections to have this issue addressed as was the case with the debt-swap of civil servants? The answer is a definite NO!
We have attached messages of what was promised during the run up to the General Elections last year and a hearty message from my comrade Kaluba.
Our only hope is that the government will listen and do what is right not only on this issue but many other issues.
We shall be back to discuss other pertinent issues of national importance.
Blessed week ahead!
CBH 🇿🇲
10/04/22