During colonial times in Africa, few Africans enrolled for qualifications in higher education institutions. The few who did so were either children of business people or those sponsored by philanthropic organisations such as churches of different denominations on humanitarian grounds. The rest could not afford to pay the fees even if they qualified to proceed with higher education after high school. Therefore, it was rare to find university students in villages and townships in the way we meet them in these and other places today. Those days, a first degree was like a doctor of philosophy degree. I remember how people idolised one male teacher who had a Bachelor of Arts General degree – the only one in a circuit of more than twenty schools.
At the attainment of independence, it was plausible that most African governments granted loans to disadvantaged students in higher education institutions. The loans, amounting to millions of dollars, enabled students from poor economic backgrounds to earn degrees and other qualifications which they would not otherwise have been able to obtain. Justifiably, by availing these government loans, the new dispensations were fulfilling one of the promises of the liberation struggles, that of providing access to higher education which had hitherto been the preserve of the minority. After institutions deducted tuition fees, money for accommodation and food, and other levies where applicable from the paycheques, loan beneficiaries had a surplus of money that supported them throughout the academic year. Those who used their surplus wisely bought books and other materials useful for their learning process. Also, students had enough money for entertainment and other forms of social life. All in all, they were self-sufficient and did not bother their families much about pocket money, money for accommodation, food and transport as is happening today. It is reported that some students bought cattle at their homes and others used part of the money from loans to pay fees for their siblings at high school. Some economists commended the government loan schemes saying that they taught students to be mature and responsible young adults after high school. They were able to plan their lives meaningfully, supported by the loans from government. The students were financially empowered.
In order for the loan schemes to be sustainable, all loan holders had to pay back to government upon getting employed after the completion of their studies. The total sum of loans had to be paid with some reasonable interest to make the schemes cost-effective. The non-payment of the loans by the beneficiaries spelt doom for this noble schemes. What started as a small scam with isolated cases soon burgeoned until the loan schemes were financially crippled. The empowering financial project for higher education students became a disaster. It is disheartening that some unscrupulous and greedy individuals involved in the running of these schemes also devised means that assisted loan beneficiaries to skip repayments, thereby denying the schemes the revenue they needed for sustainability. The officials also siphoned government coffers which fed the loan schemes for tertiary students until they collapsed. In some cases, the systems were deliberately made so inefficient that they could not fully account for or trace the beneficiaries who had to pay back the loans to fund incoming students. Corruption and the abuse of loan schemes in most of the countries which had these in full force led to the cessation of these schemes which were meant to benefit the previously disadvantaged groups more. In the end, thousands of defaulters owed government loan schemes millions of dollars.
There is abundant literature that indicates that there are still problems in student loan schemes in higher education institutions. There is a crisis in student loan schemes in most countries.
In their research paper titled ‘A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to loan defaults’, Adam Looney and Constantine Yannelis reveal that there is a rise in loan default by students in various higher education institutions. They also say that there is an increase in what they call ‘delinquency’ in loan repayment.
In answering the question ‘What will it take to solve the student debt crisis?’, scholar Daniel M. Johnson says: “It is certainly a crisis for those with student loan debts whose repayment schedules span decades, with large monthly payments. It is also a crisis for lenders experiencing significant default rates and, perhaps, a crisis for the federal government, as it guarantees these student loans.”
Taking the loan argument to the local context, it goes without saying that student loans should be handled carefully by all stakeholders for them to be sustainable and cost-effective. A systems approach should be employed in the management of loans. Beneficiaries must realise that if they do not pay back their loans, incoming students will suffer. They should realise that government is not a profit-generating entity; it relies on repayments of loans to keep the fund revolving. The government also relies on taxpayers’ money. While it is every qualifying student’s right to apply for NSFAF funds, students must realise the responsivity that goes with such funding and not takes everything for granted.
Let us all keep our eyes on how our national student loan scheme operates and raise alarm when we detect issues that may lead to a crisis in this vital organ in higher education.
*Professor Jairos Kangira is the Dean of the Faculty of Humanities and Social Sciences at the University of Namibia. He was Deputy Dean of the Faculty of Arts at the University of Zimbabwe before joining the Polytechnic of Namibia in 2006.