Student loan schemes continue to be a revolving failure

Since 2000, Zimbabwe’s government has come up with several student loan schemes, but all have largely remained on paper and failed to act as a safety net for those facing financial challenges.

Successive ministers appointed to the tertiary and higher education portfolio have announced schemes touted as the panacea to students’ funding problems, but all have fallen short, most critically in the eyes of the intended beneficiaries, the students themselves.

When Zimbabwe’s President, Emmerson Mnangagwa, came to power in 2017, following a coup that toppled long-time ruler Robert Mugabe, there was hope in some quarters that the economic and political fortunes of the country as well as the issue of student loans would improve.

But, going into Mnangagwa’s fourth year of power after replacing Mugabe, it is the same old story for Zimbabwean students.

Yet another ‘dead’ loan scheme

Last year, Professor Amon Murwira, the higher and tertiary education, science and technology development minister, announced yet another loan scheme.

Zimbabwe National Students Union (ZINASU) president, Takudzwa Ngadziore, said it was mind-boggling that every minister appointed over the years came with a “wrong prescription” expecting to get a different result from his or her predecessor.

Ngadziore said the latest loan scheme to be rolled out under Mnangagwa’s rule had several weaknesses. They include financial institutions demanding the payslips of parents for those intending to receive aid. He said the loans exist largely on paper and are not really felt on the ground.

Ngadziore said another weakness revolves around a lack of awareness of the scheme as there was no effective communication. This renders them a cake meant only for a few. Those who are aware of the scheme find that the stringent requirements place aid beyond many students.

Requirements hamper access

“There is the issue of payslips and proof of residence. With high unemployment rates in Zimbabwe, where do the payslips come from? So the conditions or requirements of the loans make it impossible to access them. The loans should be flexible enough so that students can benefit,” he said.

However, Ngadziore said, even if a student has access, the loans do not offer enough value to fill students’ needs due to the economic environment.

“The economic environment has seen these loans being used to buy sweets, instead of addressing the education question. It’s quite a shame that, for years and years, ministers who take [up] the higher and tertiary ministry portfolio seem to do the same things repeatedly, expecting different results,” he said.

As of April 2021, Zimbabwe’s inflation stood at 161.9%, according to the Zimbabwe National Statistics Agency.

Dr Takavafira Zhou, a local academic, said the loans exist on paper only for political expediency.

He said that, over the years when government was giving loans, payment was ad hoc, and some institutions received payments long after students had already completed their studies.

Zhou said that, in a hyper-inflationary situation like Zimbabwe’s, institutions of higher and tertiary education ended up demanding cash up front to enhance operability.

Resuscitate Mugabe’s successful schemes

Zhou said there is a need for the government to make higher and tertiary education accessible and affordable to most students coming from a poor background.

He said this could be done by resuscitating the loan and grants schemes that were a success in the early years of Mugabe’s rule when his education policies promoted the country’s literacy rate to one of the highest in Africa.

Such loans and grants must be supported by a revolving fund into which students who have completed their studies can pay back the money to assist fellow students still in institutions of higher and tertiary education, Zhou said.

Provision of funds must be coupled with tackling corruption in the country in general and in administering the loans.

“That revolving fund can only work smoothly in a country where corruption is low. High-profile corruption that has become routine crippled the loan and grant system as more and more money found itself in private pockets rather than assisting students’ education,” Zhou said.

Ngadziore said there are instances in which politicians used loans for “transactional politics, where they expect something back from the students”.

He also said that, before rolling out any student loan scheme, any government must ensure that there is economic stability.

This would ensure that students ended up getting jobs enabling them to pay back the loans so that the revolving funds would keep on functioning.

He said that, when governments roll out loan schemes, the money should be there as a means for students to get alternative funds and the schemes’ terms should be reasonable, lawful and justifiable.

“Zimbabwe’s loan system reflects how the environment – economically, politically and socially – is unstable. The issues around stabilisation should be the primary objective before the government seeks to make people debtors or borrowers,” Ngadziore said.

“The government should seek to create an environment which is conducive and accommodative enough for both guardians and parents to be able to work and be remunerated fairly. It should also do the same for students who seek to be independent economically,” he added.

Daniel Molokele, an opposition MP who was the University of Zimbabwe’s Student Representative Council president from 1998 to 1999, said the current loan scheme’s terms and conditions are mostly focused on parents and guardians applying for their children, but the most appropriate way is for loans to be student-focused.

He said that, when he was at university 25 years ago, such a scheme was in place, and it worked well. Molokele said students must be bound by the loan scheme, with the government guaranteeing it.

“I prefer a loan scheme that is focused on the student, that is linked to graduate employment so that the government of Zimbabwe, itself, takes the lead through the ministry of higher and tertiary education to make sure that all the students who owe the loan scheme get a job contract after graduation that deducts or mortgages the payment from them,” he said.

However, prominent Zimbabwean economist John Robertson said he believes a much higher percentage of the annual national budget should go towards national scholarships and bursaries to help students.

“Education is a very important form of investment and a skilled labour force in years to come will help keep Zimbabwe up-to-date with the times and changing technologies,” he said.

“Recent mistakes in Zimbabwe have driven many people to look for work in other countries, so we have a powerful need of tens of thousands of replacements to fill the gaps they left and lots more new ones. Forcing all students to get deeply into debt to complete their courses is wrong.

“I hope that education at all levels will soon become affordable again and I also hope that our investment conditions will soon become very much more attractive. We can never hope to create employment without first attracting investment. Good jobs depend upon good education,” Robertson said.

Loan schemes continue to struggle

According to a study titled ‘Managing the Student Loan Schemes in Africa: Lessons for younger loan schemes’, published in the International Journal of Education and Research in 2015, student loan schemes are likely to remain a growing phenomenon in Africa for as long as demand for higher education continues to rise.

According to the study, loan schemes in African countries face several challenges that include failure to create credible loan boards and failure to identify the right beneficiaries, determine appropriate loan amounts and create reliable databases as well as institute efficient and effective loan disbursement and recovery systems.

These highlighted difficulties have, by and large, persisted since 2015. From the beginning of 2021, the challenges of loan schemes in countries such as South Africa, Kenya and Burundi which have, in some respects, been exacerbated by COVID-19, have been reported on.

There is no doubt about the usefulness of student loan schemes in African countries and there appears to be agreement that they have helped to extend access and increase the retention of needy students, diversified sources of funding and contributed to the development of human resources in priority sectors in different countries.

“The student loan schemes face common problems such as inadequate targeting, administrative weaknesses and failure of collection,” according to the study.

“However, with clear legislative frameworks, policies, and administrative systems in place, and with some degree of autonomy to reduce too much political interference and legal power in the operation of the loan schemes, the schemes can be more efficient and effective,” it adds.

Harmonising fees across the system

In the Zimbabwe parliament on 16 June 2021, Lindiwe Maphosa, the chair of the portfolio committee on higher and tertiary education, innovation, science, and technology development, said the committee received a petition from student representative councils (SRCs) imploring parliament to summon and urge the higher education ministry to decrease fees at tertiary education institutions by 50%.

She said their hearings established that there was no clear higher and tertiary education financing model.

Maphosa said students argued that, four days before the institutions were due to open, fees were increased from ZWD$10,000 (USD$31) to ZWD$40,000 and the petitioners were concerned that the fourfold increase was unreasonable and beyond the reach of many and would inevitably result in many students dropping out.

She said the committee observed that, inclusive of accommodation, fees for a student enrolled in the higher or tertiary education institutions ranged between ZWD$35 000 and ZWD$45 000.

The committee also observed that, due to COVID-19 and other economic shocks, earnings have decreased while the cost of accessing higher and tertiary education has increased.

Maphosa said the committee recommends that the ministry come up with a sustainable education financing model that recognises the Zimbabwean context and is sensitive to the changes that may occur in the broader socio-economic environment by September 2021.

“The ministry should engage CBZ [Bank] in a bid to improve the requisite conditions for accessing the loans under the CBZ Loan Scheme by August 2021.

“The improved conditions may translate to an improved uptake of the loan facility, particularly by vulnerable students,” she said. “The ministry should harmonise tuition fees paid across all state institutions for the same programme by January 2022.”

For example, tuition fees for studying law at the University of Zimbabwe should be the same at Great Zimbabwe University. The ministry should put measures in place that will promote effective participation of SRCs in the review of fees by tertiary education institutions by January 2022, the committee recommends.

The ministry should come up with a framework that recognises and regulates the existence and activities of students’ unions such as ZINASU and ZICOSU (the Zimbabwe Congress of Students Union) by January 2022.