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Home / Rationality of repaying NSFAF loans explained
Rationality of repaying NSFAF loans explained
2015-03-06Staff Report 2 WINDHOEK – The Namibia Student Financial Assistance Fund (NSFAF) spokesperson, Wise Immanuel, maintains repaying back student loans is crucial to ensure future sustainability of the fund. The call follows student representative councils (SRCs) from various institutions of higher learning demanding that students should not be forced to pay back study loans upon completion of their studies. The students also want NSFAF loans to be converted into grants instead. What NSFAF is doing, Immanuel said, is to comply with the terms and conditions of its core business licence as stipulated in the NSFAF Act (26 of 2000). “And if the financial assistance provided at the moment should take a grant form as opposed to a loan form, that has to be a decision of the political leadership through appropriate structures and not of the NSFAF Board and/or its secretariat. Equally, if the loans are be to written off, same has to be in accordance with Section 18E of the Amendments Act (Act No 7 of 2014), which again vests such power in the political authority,” Immanuel stated. Equally, government has urged all loan recipients to start paying off their loans once they get jobs in order to assist others in need of financial aid. The Permanent Secretary in the Ministry of Information and Communication Technology, Mbeuta Ua-Ndjarakana, said student loans are income-contingent. “This means that repayment starts once you have an income. Usually when you start working, NSFAF will send you statements showing how much you owe and how much you must pay back each month. NSFAF makes it easy for students to repay their study loans by only asking for payment when you get a job,” explained Ua-Ndjarakana President-elect Dr Hage Geingob has joined the fray exhorting students to repay their loans, saying every beneficiary has a legal obligation to ensure that they pay back when they start working. Since the NSFAF’s inception in 1997, when the fund was still under the Ministry of Education before it became a secretariat, it has faced numerous challenges especially with the data collection of all students that it started funding, with the aim to recoup the money. It was difficult because NSFAF’s loan management system was outdated and inadequate, which led to many records not being retrieved. Against this background, Ua-Ndjarakana said government has made repayments affordable for loan recipients based on the salaries they earn. Loan repayments only start once a person’s salary is N$30 000 or more per year. “Payments start at 3 percent of your annual salary, increasing to a maximum of 8 percent when your salary reaches N$59 300 or more per year. For example when your salary is N$59 300, you will pay back N$4 744 a year or N$696 a month. In fact, NSFAF charges lower interest than banks,” he noted. He stressed students do not have to repay if they are unemployed or are still studying but they have to provide written proof in the form of an affidavit, valid for three months. 2015-03-06Staff Report 2
