Developing sustainable African HE financing policies

In an effort to improve access and encourage needy students to enrol in higher education while at the same time containing government spending, the cost-sharing model has been introduced worldwide – including in East Africa – along with student scholarships and loans.

University World News interviewed Juma Shabani, former director of development, coordination and monitoring of UNESCO programmes with a special focus on Africa, to find out about scholarships and student loan policies in Sub-Saharan Africa, with an emphasis on the East African Community.

How might these countries go about achieving a balance between higher education quality, tuition fees and affordability, especially for low-income students – often the majority of students in developing countries? What is the socio-economic impact of rising fees and degree costs?

Scholarships in Francophone countries

“In general, the Francophone countries of Sub-Saharan Africa offer full scholarships to students that cover tuition fees, while Anglophone countries only give loans and in cases of very needy students provide very limited amounts of bursaries,” Shabani said.

“Initially, Francophone countries gave scholarships to all students, but the rapid increase in student enrolments has shown that this policy is not sustainable.

“Despite a low enrolment rate in higher education of 3% on average, in comparison with 8% in countries with comparable levels of development, Francophone African countries are currently facing an immense challenge in terms of numbers."

A 2008 World Bank report, Costs and Financing of Higher Education in Francophone Africa, forecast that major expansion in demand for tertiary education would oblige countries “to design ambitious policies to avoid a decline in the quality of higher education and to guarantee employment for their young people”.

Shabani said several countries were now in the process of revising their higher education financing policies in order to improve access for bright but needy students.

Already in the 1990s in Cameroon, the student scholarships system was abolished and fees were increased from CFA3,300 to CFA50,000 (US$6 to US$95).

“The regulation of student flows, reduction of unit costs, cost-sharing, private sector development, and promotion of income-generating activities are just some of the possible areas that could guide the new higher education policies in Francophone Africa,” the World Bank report suggested.

Loans in Anglophone countries

Four of the five countries of the East African Community – Kenya, Uganda, Tanzania and Rwanda – give loans to students enrolled in public or accredited private universities within the limits of available funds. (The other country is Burundi.)

The loans are intended to cover mainly tuition fees and other expenses related to pedagogic activities, except in Rwanda where in addition to tuition fees the loan may include a living allowance.

In many East and Southern African countries, universities have responded to rapidly increasing student numbers that are not matched by state funding by introducing ‘parallel’ courses that charge full costs to students who do not receive government bursaries and loans.

East African Community

In Kenya, Uganda and Tanzania, the principle of cost-sharing in higher education has been accepted since the colonial period.

According to Shabani, in these countries at the beginning of each academic year, universities determine the actual training cost for each programme and the government pays that amount directly to the university for a limited number of students.

In Uganda, for example, the government pays tuition fees for 4,000 students enrolled in public and accredited private universities.

“Depending on the capacity of the university, other students can enrol in various programmes, but they must pay themselves the cost of their training, in terms of tuition fees and other pedagogical expenses.”

Kenya

In Kenya, the first student loan scheme goes back to 1952, when the British colonial government provided loans to Kenyans pursuing university education outside East Africa.

The Higher Education Loans Fund was replaced by another student loans mechanism, the University Student Loans Scheme, but it had problems recovering money and was itself replaced in 1995 by the Higher Education Loans Board, or HELB.

The board was established by an act of parliament and operates under the authority of the minister responsible for higher education. HELB awards and manages loans to students in accredited higher education institutions, and was also mandated to recover all loans given to students since 1952 and to set up a revolving fund to increase opportunities for loans.

“Besides loans, in the cases of very needy students Kenya also provides a very limited number of bursaries. For example the maximum amount of the bursary is KES8,000 per year, or US$87 per year,” Shabani added.

“Currently the revolving fund represents 40% of the national annual budget earmarked for student loans and due to financial constraints, HELB does not give loans to students enrolled in universities outside Kenya. HELB has established an effective mechanism for recovery of loans.”

Tanzania

According to Shabani, Tanzania had a student loan scheme before 1974, when government decided to bear all the costs of public higher education for all students.

“However, due to increases in student enrolments, this model proved unsustainable and in 1980 the government reintroduced the policy of cost-sharing in higher education.”

The Higher Education Students' Loans Board, or HESLB, was established by an act of parliament in 2004, and launched in March 2005.

The main objective of the scheme is to provide loans to talented but needy students. The board’s mandate is to recover all loans given to students and to establish a revolving fund. “Tanzania’s student loan financing model has proved to be successful,” said Shabani.

This was evidenced in a May 2013 study, which found that student loans had successfully enabled increases in enrolments in higher education and that HESLB’s guidelines and criteria for granting loans were sound and the board had employed sufficient effort to recover loans.

Uganda

Shabani said a proposal for introducing a student loan scheme was first made in Uganda in 1990, but the scheme was only established in 2013 following extensive consultation with major stakeholders including universities, the government and international organisations with experience in managing similar programmes.

The loans will be paid directly to universities and cover only tuition fees, with remaining expenses covered by students.

“Besides the 4,000 students for whom the government pays tuition, initially the loans will be provided to 1,000 students who are both talented and needy. Priority is given to students enrolled in science and technology,” Shabani pointed out.

Rwanda

Although cost-sharing is a good model in Rwanda, it has faced challenges in using financial means testing to identify potential beneficiaries, according to 2013 report that evaluated Rwanda’s funding model using the Higher Education Students’ Loans Department as a case study.

As a result, said Shabani: “Reform of the current loans policy whereby loans were given to almost every student will be implemented starting from the next 2014-15 academic year.”

Under the new policy, students have been placed in several categories based on level of poverty. Students considered to be the poorest will be eligible for a loan to cover tuition fees and a monthly allowance of 25,000 Rwandan Francs (US$36) while students who are less poor will receive loans that only cover half of the tuition fees.

The number of loan recipients will be determined by the availability of funds and a selection process based on students’ academic performance. Loan repayment will occur when the student begins to work. An amount equivalent to 8% of gross salary and interest of 7% will be deducted from the graduate’s salary to repay the loan.

The brightest students can apply for a presidential scholarship scheme but the number of scholarships is limited. In 2013, only 40 students benefited from the initiative.

Balancing quality, fees and affordability

Shabani said: “It is now agreed that the quality of higher education must be strengthened as a matter of priority in order to produce graduates who are competitive for job markets at national and international levels.

“Since the returns of investments in higher education are now important for both countries and individuals, funding for higher education should be shared between government and students according to mutually agreed formulas.”

To alleviate negative socio-economic impacts resulting from rising university fees and costs of degrees, especially for low-income students, Shabani said governments should invest in areas likely to improve quality, such as infrastructure and pedagogical training of academics.

Also, funds should be set aside for scholarships and-or loans for talented but needy students, to enable them to pay tuition fees and meet living costs.