EFFECTIVE July 1, this year, the six per cent Value Retention Fee and the ten per cent penalty imposed for delay in high education loans’ remittance will be scrapped off, Minister for Education, Science and Technology, Prof Joyce Ndalichako.
The move comes hardly three days since President Samia Suluhu Hassan ordered abolishment of the value retention fee charged annually by the Higher Education Students Loans Board (HELSB) to the recipients of the loan facility.
Unveiling a 1.38tri/- budget for 2021/2022 fiscal year, for both recurrent and development expenditure, Prof Ndalichako outlined key areas with special focus on vocational and skills oriented.
Tabling the budget estimated, Prof Ndalichako said the value retention fee on the loan outstanding balance and ten per cent penalty for loan delay payment will be scraped off as they are avenues which have raised a lot of complaints from the beneficiaries.
In 2012/2013, HESLB introduced three penalties including the six per cent loan charge on the outstanding loan balance and not on principal loan.
It was introduced to increase value of loans financing offered to the beneficiaries.
The board also came up with a penalty, in which whenever a beneficiary fails to repay his/her loan within the grace period of 24-months after completion of studies, he/ she is subjected to a ten per cent penalty.
“I direct HESLB Board of directors to ensure that come July 1, this year the value retention fee and the ten per cent penalty charged to recipients of the loan facility are scrapped off and the system must be set to that effect, so that the beneficiaries enjoy the relief,” insisted Prof Ndalichako.
Prof Ndalichako told the National Assembly that the government has increased the budget of loans issued through HESLB from 464bn/- in 2020/2021 fiscal year to 500bn/- in 2021/22 financial year.
The Minister said in the 2021/2022 financial year, HELSB will implement a number of programmes including a friendly and smooth loan repayment online system in which, they intend to collect 200bn/-.
She said they will also launch a Dedicated Customer Relations Centre in Dar es Salaam which, among others, will keep a special focus on challenges that applicants face as well as improving loans repayment.
In this coming year, Prof Ndalichako said HESLB will disburse 500bn/- loan to 148,581 beneficiaries of whom 50,250 are new entrants and 98,331 continuing students.
HESLB will as well complete evaluation on the best practice to facilitate loans to higher learning students with outstanding performance as well those undertaking studies in scholarship Prestigious Overseas’ Universities in careers of High – Impact – Degree that has direct impact on economic growth.
However, most of the members of parliament who debated the budget wanted the loans’ board to start issuing loans to students in intermediary and vocational training institutes, since it is where majority of skills holders serve who the industrial economic drive are found.
She said they are working of stakeholders’ recommendations on the formation of an Act that set Teachers Professional Board so that its efficiency and productivity meet the intended desired.
They will also put into consideration recommendations of Parliamentarians on the Teachers Professional Board and see how best they can handle issues which have raised concern among teachers and some education stakeholders