Repayment of student’s loan
I was enrolled at a university for a three year program leading to a bachelor’s degree but was unable to graduate as I was discontinued in the third year for failure to attain the required GPA. In order to sustain a living, I decided to start a small business as a hawker which I have been doing for two years now with an income of about TZS 200,000 per month. I would like to know if a discontinued student like me or dropout student is obliged to repay their student’s loan advanced to me by the Higher Learning Students Loan Board bearing in mind that my income as a self-employed beneficiary is only about TZS 200,000 per month. Please guide me.
Section 19 of the Higher Education Students’ Loans Board Act, 2004 as amended by Acts No 17 of 2007 and Act No 13 of 2016 imposes on all beneficiaries an obligation to repay the loan regardless of whether the beneficiary completed her/his studies for which the loan was advanced or she/he dropped from the college or was terminated from studies for whatever cause.
Every beneficiary of the student’s loan has to commence repayment of the loan after 2 years upon completion or termination of studies. Section 19(7) of the Act requires self-employed beneficiaries to engage with the Loans Board to know the amount they owe the Government and be updated on the amount of loan outstanding and payment plan.
The minimum amount of monthly installment prescribed for self-employed beneficiaries like you is TZS 100,000 or 10 percent of the taxable income, whichever amount is greater. Since your average income is TZS 200,000 you will have to pay TZS 100,000 which is the minimum amount prescribed under our law. Unfortunately, the law is inconsiderate of beneficiaries like you who are willing to repay their loans but cannot afford the minimum amount of monthly installments. Maybe the policy makers will consider this genuine concern you have raised, but remember that your repayment ensures the scheme continues and is sustainable.