Govt hunts student loan defaulters at work locations

By Damali Mukhaye

The authorities has finalised preparations to trace beneficiaries of its student loan scheme at their jobs to recuperate the cash.

Highly-placed sources say  the federal government has put in place a purpose-built digital platform the place employers will likely be required to log in to establish whether or not their new hires took a examine loan or not.

If beneficiaries, the employer will likely be obliged to deduct no more than 30 p.c of the worker’s internet month-to-month wage and remit the cash to Higher Education Students Financing Board (HESFB), in response to its spokesperson, Mr Bob Nuwagira.

“An employer who knowingly doesn’t notify the board of the employment of a person who has received a student loan, commits an offence and is liable, on conviction, to a fine not exceeding two hundred and forty currency points (Shs4.8m), or imprisonment not exceeding ten years, or both,” he added.

 This newspaper understands that HESFB targets to recuperate Shs32b over the subsequent six to 12 years from 3,090 students who’ve graduated out of the full 11,187 beneficiaries since 2014.

Among the takers of the examine loan is Ms Gloria Namboira, who graduated from Kyambogo University with a diploma in Bio-Medical Engineering.

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She stated she helps the monitoring of beneficiaries to their locations of labor.

“These people [government] have been there for us in hard times when we were unable to pay tuition for ourselves. So, deducting a certain amount from our salaries is not bad because we have to repay the loan,” Ms Namboira stated.

Although she continues to be jobless, Ms Namboira stated she would begin repaying the loan  from any freelance work.

Mr Nuwagira stated they’ve recovered Shs400 million and 25 students have absolutely repaid their loans, even earlier than the due date.

The Financing Board, in response to authorities officers, will write to employers in each the private and non-private sector to adjust to the event.

The choice follows many loan beneficiaries getting employed after their research, however declining to refund the cash.
This means students who studied on authorities loans will, along with Pay As You Earn (PAYE), the 5 p.c National Social Security Fund (NSSF), and Local Service tax deductions, additionally give up up a part of their month-to-month wage to clear the loan.

The Higher Education Students Financing Board was established in 2014 to supply loans and scholarships to Ugandan students who’ve certified to pursue accredited programmes within the recognised establishments of upper studying, however are financially unable.

Mr Nuwagira stated some beneficiaries have begun repaying the loans even when they’re nonetheless in class. 

“The parents help this category in repaying small amounts such that by the time they finish school, their loan portfolio is small. Any monies paid in before the end of the grace period does not attract interest,”  he stated.

The most reimbursement interval is twice the examine interval along with the grace interval of 1 yr.  This means a student who research for a course of 4 years has 9 years to reimburse the examine loan.

 The Financing Board can even reschedule a beneficiary’s reimbursement plan as soon as they fail to get employed after graduating.
 Once the grace interval of repaying the loan expires, it attracts larger rates of interest.

To-date, there has not been an elaborate system to trace loan beneficiaries who typically might change names, location and or just run away and conceal.

The loan scheme has, nevertheless, not been with out bother. In the newest cohort of beneficiaries, 47 students are as a consequence of lose their loan awards after they declared their mother and father lifeless, or themselves disabled, as a way to fluke the examine alternative.

Govt stops loan assist 
Last week, authorities cancelled examine loans for 47 college students who lied concerning the dying of their mother and father.The authorities answerable for the federal government loan scheme ordered the affected students to refund public funds after it emerged that others both lied about incapacity or cast unspecified paperwork.

The students are from numerous private and non-private universities, together with Makerere, Kampala International University, Kabale, Kyambogo, and Ndejje University. The affected students will sponsor themselves efficient the second semester of their yr certainly one of examine.  

“In accordance with Section 38 of the Higher Education Students Financing Act, an applicant who makes a false statement to the board commits an offence. It is against this background that the board decided to terminate your loans with immediate effect,” a letter addressed to one of many beneficiaries learn partially.

The names of the affected students weren’t disclosed to guard the mother and father and different relations who didn’t participate within the forgeries.

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