Examining the mechanisms of the student loan recovery for sustainable financing of higher education in Zambia.
Date
2024
Authors
Mugala, Alex
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Zambia
Abstract
For undergraduate students in public universities in Zambia, the main source of funding for higher education is the student loan programme. The student loan scheme is sustained through government and student loans recoveries. Even though Higher Education Loans and Scholarships Board (HELSB) has achieved tremendous progress in the area of loan recovery, there is still much work to be done. This study therefore sought to examine the modalities of student loans recovery for sustainable financing of higher education in Zambia. The study was guided by the Human Capital Theory and Ability to Pay Theory. The researcher employed pragmatism paradigm and an embedded research design. The respondents were sampled using simple random sampling (students), non-discriminative snowball sampling (graduates) and expert purposive sampling (key informants). This study encompassed a sample of 1400 students, 18 graduates, 1 Ministry of Education Official as well as 6 members of staff at Higher Education Loans and Scholarship Board (HELSB). Questionnaires and interview guides were used to collect quantitative and qualitative data respectively. The quantitative data collected was analysed using a software commonly known as SPSS and qualitative data was analysed using thematic analysis. The findings of the study indicated that the interest rate was relatively high. Despite indicating that the interest rate was too high, some beneficiaries stressed that they would pay their student loans in order for the government to continue supporting other needy students. The findings of the study also revealed that the modalities used by HELSB were retrieving beneficiary records using National Pension Scheme Authority (NAPSA) and Zambia Revenue
Authority (ZRA) database, recovering loans through Public Service Management Division (PSMD) and individual/private employers’ payroll systems. The study established that one of the factors affecting the recovery of loans was failure or lack of insurance of loans. Other factors include untimely remittances, lack of an Integrated Management Information System, failure to capture and recover loans from beneficiaries who are in the informal sector, lack of an investment policy, lack of employment and low salaries. As regards the performance of the student loan recovery scheme in Zambia, the findings showed that the level of loan recovery had increased exponentially from 2018 to date. Owing to this exponential increase, HELSB has
expanded the provision of student loans beyond the traditional University of Zambia (UNZA) and Copperbelt University (CBU). Based on the findings and conclusions, the following recommendations were made: HELSB must consider reducing the interest rate and ensure that the loan deductions are reduced to a fair amount, preferably, the deductions should be proportional to a person’s basic salary. HELSB needs to insure the loans because loan insurance considerably reduces the educational debt's financial risk. HELSB must also make sure that borrowers are well-informed about their obligations to repay their loans at the time of application. To aid in the tracing down of beneficiaries whose loans have matured, HELSB needs
to establish closer relationships with higher educational institutions, student organisations/unions, and alumni networks. HELSB should also work more closely with employing agencies and employers to ensure timely repayment and recovery of loans. In an effort to increase the employers' compliance levels, HELSB management ought to devote additional resources to leading compliance visits. To enhance the recovery of student loans, the thesis proposed a framework.
Description
Thesis of Doctor of Philosophy in Education and Development.