New student loan scheme – A 'half-baked' plan?

A student union representative has described Zimbabwe’s new student loan scheme – supported by US$1 billion put together by the state and six local financial institutions – as a “half-baked cake”, catering only for those whose parents are formally employed.

According to a statement by the Minister of Higher and Tertiary Education, Science and Technology Development, Professor Jonathan Moyo, the objective of the Higher and Tertiary Education Loan Support Facility is to assist current and prospective students who do not have the requisite financial resources to support their college or university education.

However, Secretary General of the Zimbabwe National Students Union, or ZINASU, Makomborero Haruzivishe, said the new scheme caters only for those whose parents or guardians are formally employed – in a country with at least a 90% unemployment rate. He said the model failed to address the high dropout and deferment rates and was oriented to profit-making.

“Despite the loans now coming, the scheme is, however, a half-baked cake. As ZINASU we have long advocated for academic loans and grants as a means to ensure quality education for all. However, the model of the loans that has been offered by the ministry neither addresses the problem of massive student dropouts and deferments due to failure to pay fees, nor is it accessible to the majority of suffering students as it is oriented at profit-making," he said.

"For example, if you get a US$500 loan from Eduloan, you will overall pay them back US$700, calculating interest,” he said.

Four banks – CBZ, ZB, NMB and POSB – and two micro-finance lending institutions – Eduloan and GetBucks – will meet half the budget with the Reserve Bank of Zimbabwe covering the balance.

Students and parents as co-debtors

The state media last weekend quoted Higher and Tertiary Education, Science and Technology Development Deputy Minister Dr Godfrey Gandawa as saying parents and students would be co-debtors.

“The parent will borrow on behalf of the student, with the student becoming a co-debtor. Loan rates vary and depend on the institution. Payment plans also vary in accordance with a parent’s income. In two weeks’ time, these financial institutions will start giving out the loans, and parents can approach them directly. They should produce proof of enrolment,” he said.

A statement from the Higher and Tertiary Education, Science and Technology Development Ministry said the maximum loan tenure under the facility would be 60 months and participating lending institutions which will administer the funds are required to pay the fees directly into the college or university account. It said students were not permitted to access multiple loans through different lending institutions under the facility.

The facility does not cover foreign students attending Zimbabwean universities; Zimbabwean students undertaking certificate, diploma or degree programmes offered by foreign colleges or universities; or students who have received full government or other scholarships, according to a ministry statement.

It said additional loans would only be considered after the lending institution has satisfied itself that previous loans by the borrower were utilised for the intended purpose.

Constitutional rights

Haruzivishe said his union had called for academic loans and grants as a means to ensure that all students in Zimbabwe could enjoy their right to education, as stipulated by section 75 of the Zimbabwe constitution.

He said they had engaged parliament and cabinet over the student loans until the Ministry of Higher and Tertiary Education, Science and Technology Development announced that the government was finally reintroducing academic loans.

‘Another white elephant’

Haruzivishe said it made more sense for the ministry to effect the union's proposal that they develop a policy which allows all colleges and universities to accept payment plans from students.

"Payment plans don't result in students having to fork out more money. They are working perfectly at the University of Zimbabwe. So, in conclusion, yes, we welcome the gesture but in itself it is just another white elephant. It will never address the problem at hand but rather threatens to exacerbate it.”

According to Pindula.com, an online information resource for “everything Zimbabwean”, student grants for fees and living expenses were discontinued around 2006 due to cash flow problems. The loans were replaced by a cadetship programme in 2010 that paid only tuition fees, which was also dogged by funding challenges.

In March 2017, Gandawa announced that the government owed tertiary institutions over US$27 million and the government was phasing out the cadetship scheme in favour of the current student loan scheme.