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 … Student fund defaulters to be hunted down

 

WINDHOEK – About 5 000 names of students and former students who have defaulted on study loan repayments have been forwarded to the Attorney General for action.

The 5 000 students and former students collectively owe the Namibia Student Financial Assistance Fund (NSFAF) under the Ministry of Education in excess of N$375.7 million. The education ministry faces an uphill battle to trace the defaulters but the Government Attorney’s office say they will not rest until the defaulters are brought to book.

Both the Standing Committee on Public Accounts and and the Standing Committee on Human Resources and Social Development in the National Assembly grilled Permanent Secretary in the Ministry of Education Alfred Iilukena yesterday to explain a number of concerns raised in the Auditor General’s reports on the accounts of the NSFAF from 2008 to 2011. The committees wanted to know how does the fund intend to overcome the challenge of tracing students who do not react to correspondence sent to them, and what strategy is being considered to deal with the matter.

Since the inception of the fund in 1997, it has assisted thousands of students to pursue their tertiary education in various fields but as of 2011 only 12 percent of beneficiaries were paying back their loans.

Chairperson of the National Assembly Standing Committee on Public Accounts Usutuaije Maamberua said the situation is unacceptable as some of the issues that were raised in the Auditor General’s reports amount to serious contraventions that have occurred throughout the years.

Education permanent secretary Iilukena told the committee the fund faces a serious problem of tracing students to pay back the loans that were advanced to them.  He said the loophole in the NSFAF Act does not provide a threshold as to when a beneficiary should start paying back the loan, which causes a big problem.  The Act also does not state  from what stage in terms of salary level the beneficiary has to start paying back once he/she has secured employment.

Iilukena  said that over the years, the ministry and the fund have been sending letters of demand to beneficiaries for payment once it was established they were employed but many do not respond, forcing the fund to submit names to the Attorney General’s office for legal action to be taken.

“This is a long process and for as long as I can remember being in the Ministry of Education, I am yet to come across a case where we can comfortably say that after submission to the Attorney General, the following people were prosecuted for failure to pay,” he stated.

He said the ministry is now working hard on coming up with a computerised system to enable the fund to trace the recipients.

Attempts have also been made to link up with other government institutions such as Inland Revenue under the Ministry of Finance and the Social Security Commission to access their records in order to establish whether or not the beneficiaries are employed but many such institutions have refused to cooperate, citing  confidentiality as prescribed in their governing Acts.

Beneficiaries are given a grace period of two years after completing their studies to look for employment, and after that, they are required to indicate to the ministry whether they have secured a job or not. But according to Iilukena this has not been happening and many of them have changed their contact details after being employed outside their original places of residence.

“We trace you with what we have, but sometimes the address changes, and the person does not live there anymore and we do not have the capacity to trace them,” he said.

The fund is now creating a database that will enable the tracing of students after their studies and compel them to adhere to the terms of the loan agreement.

“It is a big challenge to us, it is one thing to come seek assistance, it is another to come back and honour what you have signed as your responsibility as a beneficiary and with the vastness of our country it is really a nightmare to trace them,” Ilukena explained.

He said in an attempt to recover the money, the fund submits about 500 names every year of debtors to the office of the Attorney General for further action.

About 50 000 students are funded every year.  The total number of those who were not paying stood at 9 315 as at 2011. The fund aims to recover N$10 million per year, but its hands are tied due to a lack of a legal instrument to trace and demand payment from defaulters.

Government Attorney Advocate Mati Asino said the NSFAF does not on a regular basis refer debtors in breach of contract to the Government Attorney and that records provided are incomplete which makes it difficult for them to effectively recover the loans.

Asino however confirmed that his office is dealing with thousands of student cases and has managed to trace and issue summons to many, of whom several have now started making arrangements to pay back the student loans that were extended to them.

“We intend to go after each and everyone who owes the State, to collect all the outstanding amounts and make sure that what is owed to the State is paid,” he said.

Meanwhile, Ilukena told New Era that the first draft of the amendment to the NSFAF Act has been finalised and will be presented to cabinet soon for approval.

The amendments are expected to address the issue of tracing students and also to provide for a bonding clause which was omitted in the current act.

 

By Tonateni Shidhudhu