The Deputy Minister of Education, Science and Education, Omary Kipanga, made the statement in the House yesterday while answering a question from Edwin Swalle (Lupembe).
The legislator wanted to know the major challenge that hinders the development of the HESLB Study Fund in order to increase the number of loan beneficiaries.
He pointed to another challenge as some employers are uncooperative in flagging their employees as loan recipients and facilitating the timely deduction and disbursement of monthly loans.
Kipanga said the government has continued to provide education to beneficiaries and employers, encouraging voluntary repayment of loans in accordance with legal requirements.
Similarly, the government has continued to strengthen employer audits by engaging strategic actors such as the Registration and Licensing Agency (BRELA) and social security funds to identify new beneficiaries and expedite the reimbursement of matured loans to promote and develop the Education Fund.
He said that in the financial year 2021/22, the government issued a total of 570 billion/- for higher education student loans, an increase of 106 billion/- from the 464 billion /- issued in the academic year 2020/21.
In November 2018, Parliament amended the HESLB Act 2004, increasing monthly deductions from the gross wages of loan recipients from 8% to 15%.
The amended law also condemns defaulters who acquired loans during the years 1994-95 through 2005 and requires employers to cooperate by reporting their employees as loan recipients and facilitating the timely deduction and disbursement of monthly loans. Beneficiaries themselves are also required to notify the council in writing of their whereabouts and to make arrangements to settle debts.
The changes, which came into effect in January 2019, give recipients a one-year grace period after they finish their studies before they have to start repaying their loan. Self-employed people are required to commit 10% of their monthly taxable income for reimbursement, while employers have 28 days to submit the names of new employees to the HESLB for verification or else they will be considered a criminal offence.
Non-compliance by the employer makes him liable to a fine of 1 million euros or at least 36 months in prison. HESLB officials are mandated to review the records of all employees to verify loan repayment status.