Minister for Education, Science and Technology, Professor Joyce Ndalichako told the National Assembly yesterday that the decision to raise the percentage from the previously eight per cent was aimed at collecting more money from loans beneficiaries so that more higher learning students can be given loans to help them pursue their studies.
Prof Ndalichako issued the stance when responding to a question posed by Mbozi MP, Paschal Haonga, who claimed that after doubling the deductions, some workers ended up in tough situations as they sometimes walk long distances to work due to lack money.
Early November last year, the Parliament passed amendments on the HESLB Act of 2004 that initially required employers to deduct the 15 per cent from loan beneficiaries’ gross salaries up from the previous eight per cent, the amendments that were later effected from January 2018.
The Act also gives power the loan board to effectively take beneficiaries and employers to task. In the new changes, an employer who fails to furnish the board with the particulars risks fines and a jail term of not less than 36 months.
The same legislation requires the loan board to conduct an assessment of the provided list after which it will notify respective employers of the loan beneficiaries under their employment and ask them to deduct their salaries and remit the funds to the HESLB.
The executive director, Abdul-razaq Badru has regularly been quoted saying that the 15 per cent deductions that had helped a lot in collecting loan repayments from the beneficiaries adding that the board had also been making regular check-ups to ensure every employed beneficiary was deducted so that the cash repaid could help others wishing to acquire higher learning.
The board also stated that the beneficiaries are required through Section 19 of the HESLB Act to notify the board in writing of their location and make arrangements for settling the debts.
The loan board was established in 2004 and started operations in 2005 to disburse loans to students admitted in higher learning institutions.