Ex-university students owe Malawi govt K1.7bn in upaid loans

Former  students of the University of Malawi (Unima) and Mzuzu University (Mzuni) owe government are still owing  government at least about K1.7 billion ($2.5 million) which they obtained  for tuition loans between 1985 and 2012 which the State, through the Higher Education Students’ Loans and Grants Board (HESL&GB) has embarked on the recovery of the from the borrowers .

The board’s director of loans, Emma Tambala, confirmed that former public university students owe government over K1.7 billion in loans.

Some public universities alumni have faulted the government for its complacency in dealing with the loan recovery process, arguing that they have been willing to repay the loans but the government has not shown interest.

In 2010, government decided to start channeling funds for the students’ loans through the Malawi Savings Bank (MSB) with the aim of strengthening the recovery process but the system flopped and the bank stopped processing the loans.

Meanwhile, Higher Education Students’ Loans and Grants Board urges all loan beneficiaries within the said period to verify with its Secretariat on the status of their loans and agree on the modalities of repayment.

The Board  said in a statement issued last week, that it has set 12 months from April 2016 as a period for the matured loans to be repaid in full so as to meet the  evergrowing demand for loans to finance higher education for needy and deserving students.

“The Board will do all it can to recover all the overdue students’ loans which are public funds expected to develop into a revolving fund that will benefit all the upcoming generations of our nation,” reads the statement  in part issued by its chairman Chris Chisoni.

The board further says the Secretariat of the Board will contact and interface with all the employers specifically their Human Resources departments and the professional bodies as they trace the former beneficiaries towards the recovery of the loans.

According to the statement, failure by an employer to disclose the existence of the former students’ loans beneficiaries under their employment will attract a penalty fee of MWK1 million for each employee in line with the HESL&GB Act Section 30, subsection 1.

The board plans to estbalish strategic partnerships with government, particularly the Department of Human Resource Management and Development, private sector employers and professional bodies to assist in tracing the loan beneficiaries and recovery of the loans at source.

The professional bodies include the Institute of Chartered Accountants in Malawi (Icam), Institute of Internal Auditors (IIA), Malawi Institution of Engineers (MIE), Institute of People Management Malawi (IPMM) and the Bankers Association of Malawi (BAM).