The Higher Education Students Loans and Grants Board (HESLGB)—a government entity mandated to control and manage students’ loans fund— has set an ambitious target to recover about K1.2 billion loans through an initiative dubbed ‘Make a Difference: Empower the Future-Pay Back Your Students’ Loan Campaign’.
The campaign is aimed at encouraging former beneficiaries to fulfill their financial obligations by voluntarily repaying their loans.
It seeks to raise awareness, educate and motivate individuals to take responsibility for their loan repayments, resulting in the sustainability of the higher education financing system.
HESLGB Communications Manager Millie Kasunda said the need for students’ loans remains enormous, and widening the scope of beneficiaries’ reach largely depends on the recovery rate for the revolving fund.
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“As a responsible borrower, a former loan beneficiary is required to be committed to repaying the loan they received within the agreed-upon timeframe.
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“This repayment is essential for HESLGB to continue supporting needy students in pursuing higher education in both public and private institutions of higher learning,” Kasunda said.
She said former beneficiaries have responded positively to initiatives deployed by the board by voluntarily repaying their loans, with employers also “voluntarily coming forward in providing information for their employees with loans”.
She, however, said some loans dating as far as 1989 were yet to be repaid, a thing which poses a challenge to the board in fulfilling its mandate of disbursing loans to needy and deserving students.
She said, as a way of sustaining the funding base of the HESLGB and to wean off its dependence on the government as its sole source of funding, the HESLGB is mandated to establish a revolving fund with loans recovery proceeds as the main capital inflow for the revolving fund.
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“However, loans that were disbursed in the early days of the loan scheme have remained unpaid, hence lost their economic value due to, among other things, the passage of time and general inflation trends.
“In view of the loss of economic value, it is apparent that the old loans would have minimal impact on the successful establishment of the revolving fund if recovered in their current amounts,” Kasunda said.
She said the HESLGB has designed a financial model that would ensure the retention of economic value/purchasing power of the old loans to prevailing purchasing power for the sustenance of the revolving fund.
