The Education ministry takes over students loan scheme.

The Higher Education Students’ Financing Board (HESFB) disbursed study loans for science and humanity courses for 11 years before closing at the end of 2024. The Ministry of Education and Sports has taken over its functions to reduce costs by merging entities.

In 2014, the government introduced a student loan scheme to improve access to higher education, resulting in the creation of the Higher Education Students’ Financing Board (HESFB). This initiative was launched following a commitment made by President Museveni during the 2011 presidential elections.

The Higher Education Students' Financing Board (HESFB) was created in 2014 to help students facing financial barriers access higher education through study loans. These loans covered various expenses such as tuition fees, functional fees, and aids for disabled students. However, the operation of HESFB was terminated on December 30, 2024, as part of the government's Rationalization of Government Agencies and Public Expenditure (RAPEX) initiative. 

The journey of HESFB was led by former executive director Michael Wanyama, who described it as bitter-sweet. Starting with a small team in 2013, the organization had grown to 28 staff by 2024. The concept of government-funded study loans for higher education was initially unfamiliar to many, despite neighboring countries like Kenya, Tanzania, and Rwanda successfully running similar schemes.

“Many students thought it was a hoax. Some politicians initially viewed the scheme with skepticism, mistaking it for another failed government initiative,” he said.

The first board, led by Fr. Prof Callisto Loceng, started with the idea of a scheme in Uganda with no previous precedent. Wanyama and his team had to start from scratch because the scheme was only an idea on paper.

Under the leadership of Wanyama, who had no prior experience in managing a loan scheme, the HESFB board embarked on a journey to benchmark and learn from other countries such as Ghana, Kenya, Tanzania, and South Africa. With a budget of Shs 6bn, they began operations in the academic year 2014/15, supporting 1,201 out of 2,125 student applications. Through rigorous awareness campaigns, initial skepticism about the scheme gradually decreased, leading to the board supporting 16,439 students in over 150 programs across 25 public and private chartered universities and 33 Other Tertiary Institutions by the end of 2024.

Wanyama, the head of a board that awarded study loans, boasted about the board's success in recruiting highly skilled personnel and maintaining high staff retention from 2014 to 2021. He emphasized the close-knit and dedicated nature of the team, with informal titles and a transparent communication style. Wanyama even made changes to his office, such as a half-glass door, to foster openness and accessibility for staff. He noted that staff worked diligently without the need for strict supervision during loan-award sessions. However, discussions of rationalization began to affect the board's operations.

The board received consistent funding from the Education ministry to run a scheme initially focused on funding students in science-related courses. Over time, the scope expanded to include students with disabilities, regardless of their field of study. By the time of closure, 129 students with disabilities had been funded, and there was a significant increase in female participation in science programmes. In 2014, only 22% of females received loans compared to 78% of males, but by 2024/25, the gender disparity had narrowed to 42% females and 58% males. The improvement in female performance was attributed to more girls taking science combinations at A-level, which made it easier for them to apply for study loans. The board's adoption of an online application system also streamlined the process, reduced errors, and increased accessibility.

Repaying the Loan

The board received Shs 154bn from the government to run the loan scheme since 2014, but the repayment process was slow. Beneficiaries are given a grace period of one year, with their study period doubled to repay their loans. By 2024, the board had recovered Shs 3bn of the Shs 96bn in outstanding loans recoverable over the next 15 years. Some 96 students paid off their loans early, but challenges such as understaffing, unemployment, unresponsive employers, and difficulty in tracing students with changed contact details hindered the recovery process.

End of an Era

The closure of HESFB was not easy under Dr Charles Wana-Etyem's leadership as the second board chairperson. Initially, there was a plan to keep the scheme as a semi-autonomous entity, but MPs eventually agreed to transfer its roles to the education ministry. With the presidential approval of the RAPEX bill, HESFB was dissolved, and its operations were brought under the ministry. The board's functions, including administering study loans, were taken over by the ministry. Starting in January 2025, Wanyama was appointed to lead the new Higher Education Students Financing Secretariat within the ministry on a six-month interim contract to facilitate the recruitment of new staff.

The HESFB staff received termination letters before the board closed on December 30, 2024. The board is currently working with a skeleton staff to finalize their financial statements. The HESFB website will close, and loan information will be available on the ministry's website. Some social sites will be retained under the Education ministry's logo. Wanyama reflected on his 11 years of service, stating that he managed the loan scheme transparently and ethically, without taking bribes. He urged beneficiaries to repay their loans or reschedule them to help other needy students access higher education.