STUDENTS TO REPAY 100% SCHOLARSHIP UNDER LOAN REVOLVING FUND

MBABANE – Students who will be enrolled under the Eswatini Student Loan Revolving Fund will pay 100 per cent of the loan afforded to them.

Currently, students pay at least 50 per cent of the scholarship afforded to them by government, depending on the agreements that the two parties reached. The new developments were announced by the Chairperson of the Ministry of Finance Portfolio Committee and Lobamba Lomdzala MP, Marwick Khumalo, when moving for the adoption of the report of the Finance Portfolio Committee on the Eswatini Student Loan Revolving Fund Regulations 2023. He shared that now that the money would be collected by the bank, which would be selected by the Ministry of Finance, the loan would be paid in full and would be payable for a period of 20 years. He also shared that students who would be able to repay the loan in 10 years would have a discount of 20 per cent.

Regulations

The regulations of the fund depict that the minister of Finance, in consultation and approval from Cabinet, will appoint a financial institution that shall host the Eswatini Student Loan Revolving Fund account, receive funds and facilitate disbursements for activities approved by the management committee of the fund, recover monies due to the fund and select students who are eligible to benefit from the fund. The regulations also depict that the student loan shall be granted in respect of a particular course of study and not be used for any other purpose. The amount of the loan shall be paid by the fund to the designated institution of higher learning in respect of student’s study loan and to the student in respect of student assistance or any manner as the parties may agree by way of amounts payable to the institution and or student respectively.

Section 22(1) of the regulations addresses the repayment of the fund as well as the obligations of the employer, where it states that the fund may, through written notice, sent by legally acceptable mode of communication, inform the employer of a borrower that the student is indebted to the fund in consequence of the student loan extended by the fund to the borrower and of the deductions that the employer has to make from the remuneration of the student.

Deductions

Subsection (2) states that an employer who is given notice in terms of Subsection (1) shall make deductions from the remuneration payable to the student according to the scales as may be prescribed by the fund. “An amount deducted by an employer in terms of Subsection (2) shall be paid over to the fund and any amount so paid over shall be regarded as a proportionate discharge of the study loan by the borrower concerned. An amount deducted in terms of this section shall for the purposes of the Income Tax Act, 1975 or any other applicable law, be regarded as forming part of the remuneration of the borrower,” reads the regulations. It is in Subsection (5), where it states that an employer who fails to make a deduction and payment in accordance with the section is guilty of an offence and on conviction may, in addition to a fine, be ordered to make such deduction and payment. Source of funds for the fund shall consist of monies appropriated by Parliament, donations or contributions, interest as minister responsible for Finance may determine from time-to-time, monies repaid by a borrower and any other lawful income received by the fund.

The fund shall be administered by the principal secretary (PS) in the ministry responsible for loan assistance, and currently, the Ministry of Labour and Social Security is the responsible ministry. When sought for comment, Chief Electoral Officer (CEO) at the University of Eswatini (UNESWA) Simphiwe Gamedze, said it would be hard for government to recover such money (100 per cent) as it was still hard to recover the at least 50 per cent. He said it would be difficult because of the current situation in the country, where most graduates were unemployed, hence unable to repay the government scholarship afforded to them while training in the various tertiary institutions.

Scholarship

Gamedze said it was a pity that inasmuch as paying 100 per cent would be hard for students, but due to their need for scholarship, they would accept it. He said the need for scholarships was dire in the country as most students were not affording to cater for the expensive tuition fees in the various tertiary institutions. Gamedze said it was also painful that those who needed the scholarship the most were not awarded. Ngwane Teachers Training College Student Representative Council (SRC) President Innocent Shongwe said students were not pleased by this change, which would see them paying 100 per cent of the scholarship awarded to them. He said the reason they were not pleased was because there were currently no jobs in the country and even those who were employed were paid peanuts. He said, therefore, paying 100 per cent would be hard as it was already hard to pay the 50 per cent.

Shongwe said for a student to pay 100 per cent of the scholarship would mean that the students, would be delayed in developing themselves upon getting employed. The president said due to the ailing economy, they expected government to reduce the repayment to at least 25 per cent. He said after all, the scholarship was the taxpayers’ money, hence it should come back to help the very taxpayers who were the parents in this case.

Catered

Eswatini Medical Christian University (EMCU) SRC President Samkeliso Maseko noted that the Student Loan Revolving Fund would be catered for by banking institutions unlike government, hence the changes. Maseko said it was unfortunate that the banking institutions would not be able to understand the students’ need for the support, which included affordability. The president said, therefore, it would be hard for students to deal with banking institutions as they would require the students to repay the money no matter the situation the student was facing. The Swaziland National Union of Students (SNUS) Secretary General (SNUS), Almighty Sukati, said if the Eswatini Student Loan Revolving Fund would accommodate every student who had been admitted to any tertiary institution, then it was welcome. Sukati said the issue of repaying 100 per cent would not be a case if the students would be employed just after completing their studies. He said in order to enable the operation of the fund, government should provide the job opportunities for the graduates.   

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