Disbursement delays

Delaying to disburse the loan to students has been pointed out by the respondents to be a perennial problem with HESLB in Tanzania. Basing on the views of the respondents, there are multiple sources of delays. The main sources seem to be misreporting in the loan application forms, late receiving of funds from the government and inadequate communication between the HESLB and the higher education institutions. Nevertheless, the process of loan application which seems to be long may be an overall source of delays.

The delays of disbursement of students’ loans were found to sometimes extreme to the extent of threatening students’ academic welfare. Some of students were delayed to get their loans up to two semesters see (4.1.1). In such circumstances it is impossible for a student (a poor student) to pursue his higher education studies appropriately. This is due to the fact that a student who is encountered by such delays will be compelled to find the means to survive which may include begging (as one of the respondents pointed in 4.1.1) and engaging in part-time jobs which may not be easy to find. In addition, a student may decide to terminate the studies because she /he will have not paid the tuition fee and other fees which are compulsory and payable to the university. Failure to pay the tuition fee may lead not to be allowed to sit for the university exams therefore encouraging drop-out. In whatever alternative for survival, a student who is encountered by such delays is subjected to time waste for his/her studies and thus insufficient investment in his/her future through higher education. By wasting precious time for studies particularly through making follow-ups of the loan to the loan providing authorities, it is obvious that the students will fail to acquire the knowledge and skills accordingly as it was pointed out by the Mpiza (2007) that many students were performing poorly in their exams due to

wasting much of their time in making follow up of their loans instead of attending the lectures.

The consequence of this is that less skilled and less knowledgeable student will not fit for the labor market at his/her level of education and obvious the private returns from higher education will not be realized. This is contrary to the human capital theorists that higher education increases the future earnings to the bearer. Attached to this, is that, the loan money spent by this kind of student will have been partly lost because there is a great possibility of not repaying the loan. Consequently the student loan authorities will have been incapacitated in creating more loans to the prospective students. The government will have incurred all the cost for the particular student and the idea of cost sharing will have been invalid.

More or less similar findings on disbursement delays were observed by Mpiza (2007) with the slight difference of duration of time of delays. While this study found that some students were delayed of their loans up to two semesters, Mpiza (ibid.) found that some students missed their loans for some weeks at every semester. She was looking at the impact of cost sharing to students in public higher education in Tanzania. Among the impact to delays was found to be students missing classes and consequently being academically affected. Omari (1994a) documenting on students’ loan delays explains that delaying students’ loans was becoming a component of the loan scheme in Tanzania since its establishment. He further explains that delays, as result of poor management and administration of the loans, are among the major causes of students’ unrest in higher education institutions in Tanzania. Omari’s (ibid.) argument seem to be supported by Woodhall (2002) by saying that delays in disbursement of loans to students in higher education institutions in developing countries, whatever the reason, ultimately leads to students’ unrest. However, Omari (1994a) did not point out the sources of delays. The sources of delays have been found out by this study as pointed out earlier but in addition the delays seem to be a systemic problem as discussed hereunder.

The disbursement delays of students loans in Tanzania is a systemic problem which starts with the preliminary steps for loan application. A student or a prospective student, who lacks information on the loan application procedure, who struggles to overcome long bureaucratic processes of filling in the forms including certification in more than two authorities can hardly submit the application forms on time such that the loan authorities process them on time. This is the case of the first year students. It should be noted that ‘A’ level students are required to apply for the study loans after completing their studies in May each year. The first semester for higher education institutions starts in September but the first year students always come one month earlier for orientation. By implication the time from application to disbursement is two months which is considered to be short time for the HESLB to process the applications of all students in the country from a single station - Dar es Salaam.

The above scenarios indicate that the loan scheme in Tanzania under the HESLB is partly not doing fine as far as disbursement is concerned. It is not disputable that at last the money reaches the students but the number of students delaying to get their money is large see table 4.2a and 4.2b. If that is the record of one institution, what about the record of all institutions in the country? The most important thing is that the money should reach the students in time to enable them to accordingly invest in their own future through higher education. If the money does not reach students on convenient time, there is a danger for the investment to be jeopardized by students not concentrating on their studies thus acquiring insufficient skills that can not enable them to reap the fruits of the education they are investing in.