EDPRS and financing of higher education subsector

BY GODFREY NTAGUNGIRA In an effort to boost Rwanda’s transformational efforts, the five year education sector strategic plan (2008-2012) has recently been integrated and aligned with the Economic Development and Poverty Reduction Strategy (EDPRS). This has involved producing a logical framework which clearly sets out the purpose of the education sector in relation to the overall goal of Government which is to reduce poverty, increase economic growth and in turn to improve the well-being of its population. EDPRS’ overall goal is to achieve sustainable economic growth and social development, while the purpose of the education sector is to facilitate the quest by citizens to access quality, equitable and effective education. To demonstrate equity between 1995 and 2006, the National University of Rwanda (NUR) graduated 4,899 students compared to only 1,962 students that graduated in a period spanning 30 years before Genocide (1963-1993). This is just one of the examples that illustrate the tremendous progress the Ministry of Education (MINEDUC) has registered in recent years. The student’s Financing Agency of Rwanda (SFAR) The policy of a loan scheme for students was introduced in Rwanda early 1980s but its implementation was not efficiently carried out. Although loans were disbursed to students to study at higher education as early as 1980, there was no mechanism at that time to recover these loans. As part of the Government’s developmental efforts to support the growth, the expansion and modernization of the Rwandan Higher Education system and at the same time maintaining long term financial sustainability of the national higher education system, the Government introduced a Student Loan Scheme for Higher Education. The system among other things required the participation of individual students or parents in meeting part of the cost of their education. Following this, a proposal to create the Student Financing Agency for Rwanda (SFAR) was tabled before the Cabinet and was subsequently approved in July, 2003. This paved way for the eventual legal establishment of SFAR in 2006 (law No 50/2006 dated 05/10/2006). SFAR is mandated to manage and administer bursaries/loans and for purposes of sustainability, to introduce and implement a student loan system in Higher Education. Following the legal establishment of SFAR, two orders were approved by the Cabinet on the 02/11/2008. These are: ‘The Presidential Order determining the criteria for obtaining a bursary and obligations of the beneficiary of the bursary’ and ‘The Ministerial Order determining the criteria for providing loans for higher education, repayment and cost sharing mechanism between the Government on one hand and the beneficiary of the loan on another’. SFAR to-date operates as a Government autonomous agency under the Ministry of Education. It is governed by a Board of Directors. Vision: SFAR’s vision is to become the apex body of financing of Rwandan students pursuing higher education in recognized institutions of higher learning in Rwanda and abroad. Mission: i) To provide affordable loans and bursaries to deserving students pursuing higher education in recognized institutions of higher learning in Rwanda and abroadii) To promote the critical skills required for National development through the student loan scheme. Core values: We strive to be transparent, open, fair, innovative, client oriented and to use the state of the art technology in all our service delivery sites. SFAR’s mandate: According to article 8 of the SFAR law, the major mandate of the agency is i) To provide loans to Rwandan students to enable them to pay for studies in higher education;ii) ii) To recover funds disbursed to Rwandan students in higher education by the Ministry in charge of higher education as student loans;iii) iii) To coordinate the activities relating to gathering aid from various public or private organs, foreign countries and international organizations involved in financing higher education. Expected outcomes 1. Increasing Access to and or participation in Higher Education to over 100,000 students by 2015.2. Enhancing Equity in accessing funding for Higher Education.3. Moderating Government expenditure in Higher Education.4. Promoting the critical skills set for National development. 5. Making the higher education system more responsive to the country’s labour market needs by offering demand-driven academic programs. Major achievementsStreamlining the Disbursement Framework Financial Means Testing (FMT): A Government loan is granted to only academically able but financially deserving students. Not all academically eligible students will automatically be granted the loan; they have to be financially needy as well in order to merit the loan. The Financial Means Testing Mechanism is used to determine the students who are unable or able to meet part or all the cost of their studies. The FMT is based on a number of factors including the students and/or parents level of income. The outcome of the FMT generally depends on the information provided on the Loan Application Form (LAF) which is filled by the loan applicant and the parent/guardian and approved by the local administration authorities. SFAR has developed unique electronic Means Testing software to ensure efficiency and equity in the loan processing activity; this has been developed with lessons from the South African and Kenyan models. This will be tested and applied starting with the coming academic year. Unit cost funding mechanism: Unit cost funding mechanism was introduced in higher education in 2008. A simple non-differential unit cost was introduced at two (2) levels: Rwf 1.5 million per year for science and technology related courses and Rwf1.2million per year for other courses. There is need to work out a more realistic and differentiated unit cost for the various courses. Disbursement of bursary/loan to students (2008): Local Higher learning Institutions: SFAR implemented the FMT for the first time in academic year 2008. During 2008 academic year 15,710 students received Government bursary/loans. This represents an improvement in terms of support which stood at 14,743 in academic year 2007. These students were studying in NUR, KIST, KIE, KHI, SFB, ISAE, UAAC, Tumba College of Technology, Kicukiro college of Technology, Kavumu College of Education, Rukara College of Education. They also include former Government civil servants who were supported to attend higher education through the MIFOTRA-Reconversion programme. Higher Learning Institutions abroad: Progress has been made in awarding Rwandan students bursary/loans to study abroad. Conforming to Vision 2020 of becoming knowledge based economy; emphasis was given to science and technology courses especially at Masters Degree level. Negotiations were also made with development partners to ensure that the scholarship offers are directed towards the National priorities. Cooperation Scholarships: In the framework of bilateral and multilateral cooperation, SFAR also manages scholarships offered by various countries and organizations all over the world to Rwanda. The beneficiaries of these scholarships must possess a combination of requirements including the donor’s eligibility criteria and Rwandan Government’s criteria. Highest priority is given to brilliant students who intend to pursue science and technology courses. During 2008 cooperation scholarships received from development partners was 187, out of these, 158 were confirmed and commenced studies then. Loan development The official launching of the student loan scheme took place on the 13th November 2007. Since then loan beneficiaries have started paying back their loans. The repayment of loans is done mainly through employers of loan beneficiaries who deduct the loan on a monthly basis and deposit it on the SFAR loan recovery account. Few individuals have also voluntarily approached SFAR and have started repaying their loan. The loan recovery started in May 2008 before the Ministerial Order was published in the official gazette and the process progressed well. It is expected that in 2009 the loan repayment will improve much better since the legal framework is in place. The projected recovery for the first half of 2009 indicate a steady increase in the number of employers, loan beneficiaries and amount of loan recoverable, targeted at an accumulated Rwf. 1 Billion. Collaboration In order to ensure a smooth loan repayment process, SFAR collaborates closely with employers of the loan beneficiaries. Employers, whether in the public sector, private sector are called upon to collaborate with SFAR in the loan repayment by encouraging their employees who obtained a Government loan to start repaying amounts due. Since the loan recovery process started, SFAR has had good collaboration with employers and this has rendered the loan repayment process successful. Adaption of New Communication Technology SFAR-Management Information System (MIS) is a key tool in bursary/loan disbursement and recovery processes as well as in other support units at SFAR. The SFAR-MIS and the student data base were further developed during 2008. With the support from RITA, the SFAR-MIS is currently being transformed from the existing file make-pro to a more reliable database system. In addition, stand-alone software to be used in the loan application and Financial Means Testing is being developed and will be tested and applied in the coming academic year. Regular communication with students abroad using internet was also achieved during 2008. The SFAR website is being linked to the SFAR-data base so that students and loan beneficiaries (already paying the loan) can log on and access their individual accounts. Collaboration with regional student financing agencies Under the arrangements of the East African Community, SFAR has joined the student financing agencies in East Africa including: the Higher Education Loans Board (HELB) of Kenya and the Higher Education Student Loans Board (HESLB) of Tanzania to form the Association of African Higher Education Financing Agencies (AAHEFA), the headquarters are in Dar es salaam, Tanzania. Public Information and Education This has been done to aggressively change the mentality of the public with regard to the funding of higher education. The initial funding of higher education has been erroneously been taken by the general public to be the role of Government. With the introduction of cost sharing through the student loan scheme, there is great need to educate the public that they too have the role to meet part of the cost of higher education. Ends

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EDPRS and financing of higher education subsector