Student loans board demands repayments from 1985

Malawi is implementing a law on student loans passed last year that will see more students in need of financial help at both public and private institutions receiving aid, while those who were assisted as far back as 1985 have been told to repay the money.

Government has also warned that employers who fail to disclose workers who received loans will be penalised in line with provisions of the Higher Education Students' Loans and Grants Act. Employers could be fined MWK1 million (US$1,385) for each offending student.

The Higher Education Students’ Loans and Grants Board or HESL&GB said it had opened an application window for 2016-17 student loans that will close on 30 September. All former beneficiaries must repay the money so that current university and college students can benefit.

The statement by HESL&GB on 7 September followed another one issued last month by the National Council for Higher Education or NCHE. The council said the student loans board had been mandated by the 2015 act of parliament to support access to higher education through the provision of loans to needy and deserving students.

It said the board also had the legal force to recover all outstanding loans from former student beneficiaries in order to make the scheme viable, revolving and sustainable.

Malawi’s loans and grants scheme started around 1985 with funds from the World Bank amounting to US$2.8 million.

NCHE said the HESL&GB wanted former loan beneficiaries to know that it had embarked on recovering all matured outstanding loans. Former beneficiaries needed to verify with the board the status of their loans, and agree on the modalities of repayment.

“All loans accessed during academic years 1985 to 2012 or earlier are considered matured loans and are due for payment,” said the council, adding that loans should be fully repaid within a year.

The NCHE said that failure by an employer to disclose the existence of former student loan beneficiaries among their employees would carry a penalty fee of MWK1 million per employee, under section 30 of the Higher Education Students' Loans and Grants Act.

It appealed to all former student beneficiaries to accept the moral responsibility to settle their loans. “Let us all take part in supporting needy and deserving university students through our repayment of loans and have an inclusive and increased access to higher education,” it said.