Government to review student loan repayment rules – Kipanga
Deputy Education, Science and Technology Minister Kipanga Juma Omary told the National Assembly on Wednesday that the move aims to reduce the burden of paying for loans that recipients carry after completing their studies.
The Deputy Minister said this while responding to a further question from Special Seats MP Halima Mdee (Chadema), who claimed that the majority of HESLB loan recipients find it difficult to pay the loans even if they don’t. had no income-generating activity after completing their studies.
“The HESLB beneficiaries spent years on the streets without finding a job, this also prevented them from repaying their loans on time, but in the end the government punishes them by increasing the amount of their payment by the bias in penalties and unfavorable interest rates ”Mdee asserted.
The Deputy Minister responded that: “We have received a number of complaints about interest rates and penalties on loans from HESLB recipients, so we will be working on that to see how we can reduce them or even removing them to provide relief. to Tanzanian students.
In his follow-up question, George Mwenisongole (Mbozi-CCM) inquired about the government’s plans to reduce interest rates and levies on loan recipients to reduce the burden on poor students.
The deputy minister clarified that the 15 percent deduction from gross salary is not interest but a loan repayment deduction itself.
Clarifying deductions on loans and interest rates, Minister Joyce Ndalichako said the government is not charging a 10 percent interest rate as many people think, but is charging retention fees of six percent value.
“The 15% deductions do not apply to interest, as some stakeholders have stated. These are the total deductions that a beneficiary deducts from their monthly salary that are submitted to HESLB by the employer, ”said Professor Ndalichako.
In a grassroots question, Busokelo MP Atupele Mwakibete sought out the government’s plans to expand services and ensure that more poor students get the loans to enable them to fulfill their higher education dreams.
Deputy Minister Omary responded that the government will continue to increase the budget to ensure that more students benefit from the loans.
“In 2021/22 we proposed a budget of 500 billion / – for HESLB loans. I am sure that more eligible students will benefit from these loans, ”he said.
In early November 2017, Parliament passed amendments to the HESLB Act of 2004 that initially required employers to deduct the 15 percent of gross salaries of loan recipients from the previous eight percent, changes that were subsequently made to from January 2018.
The law also gives the loan commission the power to effectively reprimand beneficiaries and employers. In the new changes, an employer who fails to provide details to the board risks fines and jail time of at least 36 months.