HESLB’s Executive Director Abdul-Razaq Badru told the ‘Daily News’ yesterday that the board’s trend of collection has significantly improved following the fresh move in pinning down the loan beneficiaries.
Mr Badru, speaking in a telephone interview, said that when the campaign started last July, the monthly collection was 3.8bn/- but the amount has since soared to 12bn/-. He said by last December, the collection more than doubled to 8bn/- monthly and it has further increased to 12bn/- this month, bringing to 49bn/- the amount collected in the past eight months.
And, with the newly introduced deduction rate of 15 per cent from the loan beneficiaries’ salaries, the board is optimistic to further increase the collections.
HESLB has recently announced that the employees who benefited from the higher students loans will, starting this month, have their salaries deducted by 15 per cent to repay their loans.
“If we proceed with this trend, we are certain that by June we will have collected 100bn/- for a period of one year since the campaign started. Previously, the board used to collect that amount in ten years,” he said.
At the annual rate of 100bn/- collections, the board will be able to finance the loan issuance budget by between 20 and 25 per cent. Currently, the government coughs up almost the entire amount required to lend to students from its budget.
The 15 per cent repayment rate was endorsed in the Parliament last November following amendments of the HESLB Act, 2004.
The loan board has been writing to employers to remind them of their obligation to deduct the new rate and channel it for repayment.
Tabling the amendments to the Act in the National Assembly, the Attorney General (AG), Mr George Masaju, said the revision of the legislation was aimed at intensifying loan recovery and improving operations of the board.
The AG informed the august House that the higher education loan beneficiaries will have a grace-period of one year after completing studies before starting the loan repayment.
Those in self-employment, according to the AG, will have to commit 10 per cent of their monthly taxable income or monthly repayment of not less than 120,000/-.
Under the new amendment, employers will have 28 days to submit the names of their new employees to HESLB for verification, with failure considered as a criminal offence.
Under the amended legislation, HESLB officials or agents are mandated to examine records of all employees to verify loan repayment status.