Making Student Loans Work in Africa

Journal of Higher Education in Africa

"Revenue supplementation" in higher education refers to shifting higher education costs away from relying mainly (sometimes virtually exclusively) on government, or the taxpayer, and toward parents, students, philanthropists, businesses, and other sources. "Cost-sharing" refers more specifically to requiring that parents and students pay all or most of tuition, lodging, and food costs, and other fees, as well as lessening the value of grants or raising the effective interest rate on student loans. This article identifies some of the historic resistance to cost sharing as well as its rationales-the most compelling of which is the sheer need for revenue, coupled with the increasing unlikelihood that African governments can raise enough revenue by taxation to meet currently underfunded social needs and simultaneously provide substantially more to meet the rising costs of higher education. The article identifies some limitations to the "dual-track" tuition policies in East Africa and some reasons for the many failures African countries have experienced with student loan programs. It cautions against the prevailing fascination with incomecontingent loans and makes recommendations, drawn both from theory and from the few empirical examples of "things that work." Résumé Dans le domaine de l'enseignement supérieur, le concept d'« augmentation de revenu » consiste à ne plus dépendre principalement (parfois exclusivement) du gouvernement ou du contribuable pour ce qui est des dépenses d'éducation, et à * An earlier version of this paper was presented to a conference, "

International Journal of African Higher Education

This article investigates the challenges confronting student financing systems in Africa, with specific reference to Tanzania’s Higher Education Students’ Loans Board (HESLB). It shows that the major challenges include limited resources, unemployment among loan beneficiaries, increased loans applications, the lack of a national identification system, emigration of loan beneficiaries, poor policy and legal frameworks, and corruption among HESLB staff and loan beneficiaries. The article recommends that the HESLB should diversify its sources of funding to reduce dependence on government; enforce loan repayment through legislation that enables direct reimbursement from beneficiaries’ salaries; charge interest higher than the inflation rate; and embark on aggressive public education campaigns on the importance and benefits of the loan scheme and loan repayments.

Journal of African Economies, 2011

This paper identifies the twin problems of higher education financing in Africa-inadequate resources and poor use of existing resources-and traces them to the preponderance of free, public tertiary education in most countries, despite a weak economic rationale for such an approach and unintended consequences of inequitable access and politicization of higher education. It proposes a reform of higher education finance based on principles of rationalizing government's role, taking into account the politics of such reforms and the institutional changes needed for a wellfunctioning system of tertiary education in Africa.

2004

Student loan programs are among the most complex, controversial, frequently misunderstood, and yet potentially important elements in the financing of higher education. Their importance stems from the increasing prominence of cost sharing-meaning the shift of at least some higher education costs from governments and taxpayers to parents and students-on the public policy agendas for higher education in most countries. 1 And yet the international higher education policy landscape is littered with loan programs that have either failed outright, or failed to accommodate the devilishly difficult policy balance between expanding higher educational participation and accessibility, while simultaneously expanding real cost recovery from students. This paper will look at student loans for higher education from an international comparative perspective, looking especially for the essential elements of lending and borrowing for higher education that lie beneath some of the more visible features of certain student loan programs, both in theory and in practice. We will examine especially the challenges of student lending in low-income, or "less industrialized," countries, as well as countries "in transition" from predominantly state-owned means of production and governmentally-controlled economies to market-oriented economies with substantial private ownership. We will search for possible explanations for the difficulties that many student loan programs in such countries have had, and suggest some principles for better accommodating the twin goals mentioned above. (In addressing much of this analysis to so-called developing and transitional countries, we do not equate the economies cultures, or especially the higher education systems of a typical "less industrialized" or "developing" country with those of the former Socialist countries of East and

2003

2000

This chapter examines the following key issues: What does the reform agenda for higher education look like? What are the main factors driving the reform? What strategies are available for achieving a sustainable funding base for Sub-Saharan Africa higher education? What is the policy of the World Bank towards Sub-Saharan Africa? The author discusses these topics separately. The chapter contains tables and graphs as well as an appendix indicating the most recent World Bank projects in Sub-Saharan Africa.

2003

Higher Education, 2016

The purpose of this article is to discuss how best to finance higher education in low-income countries of sub-Saharan Africa, drawing on benefits and drawbacks of the prevalent models of higher education finance, and lessons to be learned from countries which have seen greater expansion of their higher education systems in recent decades. Two main aspects are distinguished: first, a recognition of the powerful evidence that the general level of education in a country, its human capital, matters in determining a path to economic development; second, understanding that it does not help to produce large number of unemployed graduates whose only option due to absence of jobs is to engage in rent-seeking activities which in the end undermine both the essence of the human capital investment made, and job creation to be associated with human capital skills. Three areas are discussed, fully publicly financed ''free'' university education model; feasibility and lessons about fees; feasibility and lessons about loans. In addition, the paper makes suggestions on the measures to widen participation and promote equity and quality.

2013

Cost-sharing is neither a new subject nor a recent practice in the financing of students' higher education in Zimbabwe. The practice of cost-sharing in Zimbabwe's higher education dates back to the colonial period. Unlike those African countries that have historically had free higher education, in Zimbabwe cost-sharing has always been part of its higher education financing formulae. As a result, whereas the challenge in other African countries has been to shift from free higher education to cost-sharing, the challenge in Zimbabwe has been that of moving from one cost-sharing model to another. While Zimbabwe has experimented with various cost-sharing strategies, literature on the country's experiences with the practice is limited. This study fills the knowledge gap by identifying and accounting for the shifts in the conception and practice of cost-sharing in the financing of students' higher education in Zimbabwe. Consistent with the study's focus on describing and understanding historical processes (shifts in cost-sharing policy over time) in higher education financing in Zimbabwe, a qualitative approach was adopted to gather and analyze data. In particular, the study used an historical research design to identify and account for the policy shifts in higher education financing in Zimbabwe from 1957 to 2009. The scope of the study was limited to student funding in the public university sector. The study used documents as the major sources of data, while interviews and focus group discussions with key actors in higher education financing in Zimbabwe provided additional data to validate data generated from document sources. The study demonstrates that Zimbabwe adopted cost-sharing in higher education financing at the very point of inception of the first university in the country, the University College of Rhodesia and Nyasaland, which is now the University of Zimbabwe in 1957. Starting (in 1957) with a deferred tuition fee policy that was complemented by a mortgage type loan system and government grants, a confluence of global, national and local forces combined in specific fashion in specific historical epochs over time to 'negotiate' and 'renegotiate' the student funding models. It is further shown that during the colonial era, while the cost-sharing model rode on the back of a favourable Government loan and grant system aimed at promoting access to higher education, the racist basis of colonial education policies created bottlenecks that severely curtailed access to higher education by the majority black population. Colonial education policy iii regimes deliberately limited the feeding streams into university enrolments by black students, resulting in a proportional mismatch between the number of white students entering university and that of black students. Thus, during the colonial era, access to higher education was largely a function of the 'barrier' system in African education that defined inequality between whites and Africans. Independence in 1980 saw the new socialist government embracing the loan and grant based cost-sharing model and further implementing radical measures to democratize access to education. However, the increase in student numbers and in higher education institutions, coupled with poor loan recovery, and the ascendancy of neoliberalism at about the turn of the twenty-first century presented serious challenges to the state's capacity to adequately fund higher education. In the process, the loan and grant system declined gradually and was eventually replaced by an upfront tuition fee policy that took a toll on access to higher education. Noting the inadequacies of policy interventions through the introduction of the Cadetship Scheme, the 'successor' to the loan and grant system, the study recommends the resuscitation of the loan system. It is however, important that such reintroduction of the loan system be predicated on the development of a robust framework that ensures that loans are allocated to students who are in real financial need and that there is in existence, effective and efficient loan recovery machinery. iv