Learning student financing lessons from our African neighbours
While each country has different approaches to student funding, as well as different policies and regulations in place, many of the financing agencies and institutions at the AAHEFA event face common challenges. And most have to do with a lack of funds and an inability to recover funds.
Chatting to Mail & Guardian, Nana Kwaku Agyei Yeboah, chief executive of Ghana’s Students Loan Trust Fund (SLTF) explained that the government has embarked on various ambitious education initiatives. For example, high school education in Ghana is free.
“Many of the people who wouldn’t have been able to afford high school, can now attend.” At the same time, the government hopes to double the gross tertiary enrolment ratio from 20% currently to 40% by 2030.
To make this more viable, SLTF has launched a “no guarantor” student loan policy. Before this policy, students had to have a guarantor before their loan applications were approved. SLTF data shows that over 90% of the eligible student population weren’t able to secure loans, in part, because of difficulty in finding guarantors. The removal of the guarantor requirement puts tertiary education within the reach of hundreds of thousands of students nationwide, said Yeboah.
In Zambia and Tanzania, funding challenges stem from mismatch between the number of eligible students who want to attend university and the amount of money available to fund them. The number of students completing high school and who qualify for university is huge, said a representative from Zambia’s Higher Education Loans and Scholarship Board (HELSB). Some can sponsor themselves, but the majority depend on government assistance in the form of loans.
“We are allocated a fixed amount of money as part of the national budget and we have to finance all the students from this amount.”
However, they are not able to finance everyone. HELSB has created a points system to determine how the funds are distributed.
It doesn’t matter what programme a student applies for, if they have a certain number of points, they qualify for funding.
He admits that this approach is contentious for two reasons. Firstly, how can we say “no” to a student who is just a single point below the threshold, he asks. And secondly, by funding students irrespective of their degree of choice, he worries that HELSB may be failing on its objective.
“If we want to build the labour power and skills our country needs, we need to group students into different categories, with some categories ‘favoured’ over others based on the skills the country needs.
If we are training someone for the sake of
training and they can’t find a job, they won’t be able to repay their loan.”
In line with this, he points out that loan recovery is a major priority for HELSB. By improving recoveries, they can use the money that is repaid to fund others.
According to Tanzania’s Carolyne Nombo, given the fact that government funding is insufficient, the Higher Education Students Loan Board (HESLB) is engaging with the private sector to boost their coffers. “The government is doing a lot but there are gaps. We know that the private sector absorbs our graduates so we are encouraging them to incur some of the costs to train the people they want to one day bring into their workplaces.”
Their efforts have borne fruit. In the current financial year, HESLB has secured a loan worth TZS 200-billion (R1.5-billion) to fund students who meet the requirements to study at their chosen university or TVET College.
In Namibia there also exists a gap between the demand for funding and supply, says Kennedy Kandume, chief executive of the Namibia Students’ Financial Assistance Fund (NSFAF). Noting that they are constantly engaging with the government about increasing this budget, he highlights that just because the government allocates more to funding for higher education one year does not mean that the same will happen the following year.
Agencies like NSFAF are supposed to function as a revolving loan fund and so loans are made available to students who are then required to repay the money so that the central fund is replenished. As individuals pay back their loans, there is an opportunity to issue loans to new students. “Some people who have benefited from the fund aren’t willing [or able] to pay back the money. This is a problem.”
Like many of his colleagues, Kandume worries about funding students who won’t be able to find work after completing their studies because there is no demand for their skills. In the case of loan repayments, this reality only exacerbates the problem.
Kandume fears that in targeting funding at “in-demand” sectors, they may find themselves with an over-saturated market. Despite these challenges, he is steadfast that you can’t stop funding students just because there are limited funds and a lack of employment opportunities.
“In our interactions with other countries, it’s evident that when you have an educated population, these people will find a way to navigate the job market and make opportunities for themselves.”
All over the world, student loan financing is a challenge, concluded Yeboah. Even in the most advanced countries. Participants agreed that associations like AAHEFA add value and have an important role to play in enabling funding schemes to brainstorm innovative and creative ways to improve the work they do.