The Department of High Education Student loans in the Rwanda Education Board (REB), is struggling to recover student loans, particularly because employers of former beneficiaries are unwilling to implement pay back procedures.
Fred Mugisha, the head of the department, says sensitization for people to pay back is still paramount as only “a handful of employers” commit to deducting the obligatory eight percent of former student loan beneficiaries’ salaries, to allow the Government Issue more grants to younger students.
The loans have for years been granted to students to pursue higher education studies both in the country and abroad, and most were awarded through what used to be known as Student Financing Agency of Rwanda, which has since been absorbed into REB.
As per the agreement between the benefitting students, they are supposed to repay the money in installments once they finish school.
“In terms of constraints, the employers are the ones supposed to deduct the applicable amount of eight percent of the gross salary of a loan beneficiary and deposit it on our account. They are also supposed to, on behalf of REB, record the number of beneficiaries but unfortunately, only a handful of employers do,” Mugisha told The New Times, yesterday.
The total amount to be recovered is Rwf 70,772,000,000, according to Mugisha, and the recovery exercise targets beneficiaries from 1980, and the number of beneficiaries now stands at 64,058.
“That amount is not expected to be recovered in one year but it will take, at least, five years to recover, plus what new beneficiaries who are currently students at higher institutions of higher learning are getting as study loans.”
According to Mugisha, the recovered amount by June 2011 was Rwf 3,516,176,734.
“In the year 2011/2012, the recovered amount was Rwf 1,600,529,739, an increase of 23 percent, compared to the previous fiscal year. The amount expected in 2012/13 is Rwf 2 billion.”
Mugisha said that active employees paying back are 9,564, while employers who are currently complaint are 388.
“Early this year, we issued a request to all employers to make declarations of their staff that benefited from the government study loans,” said Mugisha, adding that only 110 complied and majority never even got back to the board.
The loan recovery programme was initiated in November 2007, while effort to sensitize people to pay back started in 2008.
“We cannot really ascertain that all these people have got paying jobs or are self employed and have steady incomes,but most people do.”