Beneficiaries' perceptions of student loan repayment: insights from the Zambian context

Alex Mugala; Harrison Daka

Alex Mugala University of Zambia, Department of Educational Administration and Policy Studies https://orcid.org/0009-0006-4301-3110
Harrison Daka University of Zambia, Department of Educational Administration and Policy Studies https://orcid.org/0000-0002-5497-6020

Keywords: Keywords: Mechanisms, Students, Beneficiary, Student Loans, Loan Recovery, Sustainable Financing and Higher Education

Abstract

This study explored the perceptions of beneficiaries towards student loan repayment in Zambia. The study was guided by the Ability to Pay Theory. The researcher employed pragmatism researcher paradigm and an embedded design. The respondents were sampled using simple random sampling (students), non-discriminative snowball sampling (graduates) and expert purposive sampling (key informants). This study encompassed a sample of 1400 students, 18 graduates, 1 Ministry of Education Official as well as 6 members of staff at Higher Education Loans and Scholarship Board (HELSB). Questionnaires and interview guides were used to collect quantitative and qualitative data respectively. The quantitative data collected was analysed using a software commonly known as SPSS and qualitative data was analysed using thematic analysis. The findings of the study indicated that the interest rate is relatively high. Despite indicating that the interest rate is too high, some beneficiaries stressed that they will pay their student loans in order for the government to continue supporting other needy students. Based on the findings and conclusions, the following recommendations were made: HELSB must consider reducing the interest rate and ensure that the loan deductions are reduced to a fair amount, preferably, the deductions should be proportional to a person’s basic salary. HELSB needs to insure the loans because loan insurance considerably reduces the educational debt's financial risk. In order to guarantee that these requirements are laid out explicitly in the agreement deed, HELSB must make sure that borrowers are well-informed about their obligations to repay their loans at the time of application. To aid in the tracing down of beneficiaries whose loans have matured, HELSB needs to establish closer relationships with higher educational institutions, student organisations/unions, and alumni networks. They should also work more closely with employing agencies and employers to ensure timely repayment and recovery of loans. In an effort to increase the employers' compliance levels, HELSB management ought to think about devoting additional resources to leading compliance visits.