University students may, effective next academic year, begin to get an education loan straight from a bank.That is contrary to the current arrangement under which government pays bursary for eligible students to institutions of higher learning and a monthly stipend to disadvantaged students.The current system has had its own challenges including reluctance by former beneficiaries to pay back after school, according to government officials.To avoid these difficulties and instill a sense of ownership among beneficiaries, they say, government has for sometime mulled the idea of having a bank extend these loans to students with minimal involvement of government.A policy on the issue is under formulation, according to officials at the Rwanda Education Board (Reb).According to Reb officials, only Rwf6 billion has so far been recovered from bursary beneficiaries but the agency is yet to determine the exact number of people who are supposed to repay.Under the previous bursary framework students were expected to pay back only the monthly living allowance and not the tuition.But under both the recently reformed scheme and the envisioned bank loan arrangement students will be required to repay the entire bursary package.At the moment, public universities charge Rwf600,000 in tuition each academic year with students who are eligible for the monthly stipend receiving an extra Rwf25,000 a month.Louise Karamaga, the official in charge of higher education student loan department at Reb, said that government had zeroed in on two financial institutions, namely Rwanda Development Bank (BRD) and Umwalimu Sacco (the teachers savings and credit cooperative), as the leading candidates to take over the scheme.Karamaga said the choice of the two financial institutions was informed by their leaning towards development financing as opposed to typical commercial banks.A source privy to this arrangement told The New Times that BRD had an upper hand considering its long experience in target financing, and its more tested financial stability.When contacted, Alex Kanyankore, the chief executive of BRD, confirmed that "indeed there are ongoing discussions about this issue.” He said a study about the scheme had been finalised but declined to delve into details saying no deal had been reached yet.None of the parties could also divulge details of this arrangement, such as possible guarantee fund, interest rate and repayment mode. It is also not clear whether this arrangement will be open to a bigger number of students as opposed to the government bursary scheme which only caters for those who have excelled in Senior Six examinations. Should it come into effect effective next academic year (September 2014), the scheme will replace a controversial government bursary arrangement which just came into force last month.Based on the Ubudehe prosperity barometer, which classifies Rwandan families in six categories in accordance with their level of income, the new bursary arrangement kicked a storm after 13,000 students were told that they did not qualify for the bursary because their families were deemed to be outside the most vulnerable families (categories 1 and 2). Those whose families were found to fall in categories 3 and 4 had been asked to cover half the tuition with the other half coming from government, while those in categories 5 and 6 were asked to cater for their university education.In addition, only those in categories 1 and 2 were eligible to receive the monthly upkeep allowance of Rwf25, 000.However, 10,000 students were later reinstated to full government bursary after they successfully appealed against the Ubudehe category that they had been placed in.Officials hope that using a bank to extend these loans will prove more efficient because the bank will aggressively go after the beneficiaries, resulting in fewer defaulters as opposed to the current arrangement.That will have a greater multiplier effect since the more money recovered the greater the chances of financing more students, according to officials.They say the proposed scheme is more sustainable than the current one.Karamaga said the proposed arrangement would be less bureaucratic and more clear-cut than the current one.Under the government loan scheme, she said, a least three government ministries are involved in the process to release the funds, besides the other organs involved in the process to determine who qualifies for the facility."Once we have agreed on the list of beneficiaries we send the list to the Ministry of Finance and Economic Planning, which in turn forwards it to the central bank which later returns it to us before we could release the money,” she said of the current scheme. But under the proposed scheme, she said, the bank will transfer the money straight onto the students’ accounts. Government has previously said it intended to gradually withdraw from providing direct financial support to students in higher education, saying parents and guardians should increasingly take the lead in this regard.Government said that would allow it to direct more resources towards basic education, Technical and Vocational Education and Training (TVET) as well as infrastructural and training needs at all levels of education.Beneficiaries speak out Until the last academic year, everyone who benefited from the government since early 1980s was expected to pay back only the living allowances they received in 22 months with no interest. Under the 2008 Rwandan student bursary/loan policy, beneficiaries are supposed to start paying back upon finding a job.Jean Pierre Sangwa, who graduated from the National University of Rwanda in 2011, urges everyone who benefited from the scheme to endeavor to refund the money so that it can be reinvested in critical sectors.Sangwa, who works with Transparency Rwanda, says he has already cleared half of his loan and will settle the outstanding balance any time soon."Studying is the best investment for anyone and, therefore, everyone should really try and honour their obligation.”In recent years beneficiaries signed forms committing themselves to repay.He also urged government to make sure that whatever financial institution inherits this scheme extends the facility to all students."It should be inclusive and the interest rate should be moderate, especially since the banks being considered are not principally driven by profit like is the case with commercial banks,” he said.Maurice Nsabibaruta, a high school teacher, said whoever will take over the scheme from government should allow fresh graduates time to settle in the world of work before repaying since finding a job these days is a challenge.Samson Bayiringire, an employee with the Rwanda Environment Management Authority, says he finished servicing the education loan early this year.For him, government should not completely pullout from the bursary arrangement, or at least it should continue to closely monitor the scheme with a view to ensuring that no student fails to complete school due to lack of tuition.In case you want to repay your loan, you can find details about mode of payment on www.reb.rw, where you can access and fill in the ‘Individual Staff Declaration Form’.