Students’ Loans Board needs extra K8.3bn

Higher Education Students Loans and Grants Board says it requires an additional K8.3 billion to sponsor underprivileged students enrolled in public universities following an increase in students recruited in the 2023/24 financial cycle.

The board’s director of loans recovery Paul Padambo said this at Parliament Building in Lilongwe yesterday when Ministry of Education and the Loans Board met the Budget and Finance Committee of Parliament to discuss issues surrounding the increase in tuition fees for undergraduate and mature students.

In his presentation, he said the loans body incurred a deficit of K5 billion in the 2023/24 cycle after the number of beneficiaries grew to 25 978 students from 22 423 in the previous cycle.

To support the students, he said the Loans Board will need about K22.2 billion against the available K17.2 billion which comprises aK16 billion allocation from the Ministry of Finance and Economic Affairs as well as K76.2 million contribution from Press Trust, K451 million from the Save project, and some loan recoveries.

Said Padambo: “The fee hike by public universities increased the deficit further and the loans board requires an additional K3.2 billion to meet the demand created by the new fee structure.” 

The deficit would pay a tuition fee of K650 000 for 12 769 students or about half of the students that require financial support in the 2023/24 financial cycle.

The deficit prompted the Ministry of Education to propose reforms in the management and disbursement of the loans.

In an interview on the sidelines of the meeting, Ministry of Education Principal Secretary Chikondano Mussa said the existing system benefits the elite who “monopolise” higher education in public universities.

She said: “The problem is that the system has been porous and we are working on measures to tighten it up.”

Mussa said she would lobby the Ministry of Finance to increase the allocations to the Loans Board.

In his remarks, Budget and Finance Committee of Parliament vice-chairperson Ishmael Mkumba said Parliament would consider the proposals made by the Ministry of Education and the Loans Board.

Since the 2015/16 loan cycle, the loan body has disbursed K34.8 billion but has only recouped K1.13 billion, representing about 3.2 percent.