Africa-Press – Tanzania. HIGHER Education Students Loans Board (HESLB) has recorded enormous increase in loan repayments after the government scraped the 6 per cent Value Retention Fee (VRF) and other related charges on loan beneficiaries.
HESLB Executive Director, Abdul-Razaq Badru said there has been a powerful response from beneficiaries to voluntary repay their loans following a move by the government to repeal levies and penalties, although he did not reveal the amount which has so far been collected.
“Since July this year, there has been an enormous increase in loan repayment, and here at the 16th Exhibitions on Higher Education, Science, Technology and Innovation we have seen many beneficiaries coming to our pavilion to access information on their loan status,” he said .
The board also commended the sixth phase government for increasing loans budget for 2021/2022 academic year to 570bn/- which will see more students benefiting from the scheme.
They estimated that the number of students who will benefit in the 2021/2022 academic year will increase by 62,000, bringing the number to160,000 beneficiaries.
HESLB will spend 570bn/- on loans, representing an increase from 464bn/- in the previous year.
He added, “As of May this year, HESLB had collected 168bn/-, which is equivalent to 88.4 per cent of the target of collecting 190bn/- in the 2020/2021 financial year” Mr Badru further said HESLB will continue to work with various stakeholders, including employers to make sure that they collect loan debt from beneficiaries to enable the government have a sustainable Fund.
On 1 May 2021, President Samia Suluhu Hassan in commemorating Workers’ Day said the government has scrapped the 6 per cent VRF after considering workers’ concerns.
“The VRF was among the things I was planning to look into, but after complaints, I have removed it today, so I am ordering HESLB to remove the fee from today, we will simply deduct 15 per cent of beneficiaries’ pay,” she said.
But, the Head of State urged loan beneficiaries to continue repaying loans and commended HESLB for recording outstanding performance in collecting debts, saying it has increased from 28bn/- in 2015/2016 to 192bn/ – in 2019/2020.
She said proper and prompt collection of loans has led to the increase of loan budget from 373bn/ – in 2014/15 to 464bn/ – in 2020/2021,and that the number of beneficiaries has increased from 98,300 to 149,389.
Establishing Act tasked HESLB, under Section 7 (i), to recover all the due loans extended to former students since July 1994 so that the same money could be lent to other students, rendering the loans scheme sustainable and ensuring a revolving fund.
The Board had introduced three charges in 2012/2013, including a six per cent VRF charged on the outstanding loan balance, and not the principal loan.
They introduced it to increase the value of loan financing offered to beneficiaries. If a beneficiary cannot repay his/her loan after the expiration of a grace period of 24 months after completion of studies, he/ she shall be charged a 10 per cent penalty.
Mr Badru expressed gratitude to President Samia for the government’s move to increase the budget for Higher Education Loans for the 2021/2022 academic year amounting to 570bn/-, which set a precedent in the institution.
