PNG Higher Education Loan Program: Need Help
As I pointed out in my first blog In this regard, in February, Papua New Guinea launched its first higher education loan program in 1999, the Higher Education Student Assistance Program (or TESAS). It was suspended from 2007 to 2009 due to a complete lack of repayment by the loan recipients. In 2010, TESAS was re-established as a merit-based scholarship covering 75% of total tuition fees with benefits that included airfare (both ways) and pocket and book allowances, in especially for students who have performed well academically.
The Marape government introduced the Higher Education Loan Program or HELP at the end of 2019. It was one of the priorities of the Marape-Steven government detailed in the Marape Manifesto launched on September 16, 2019. On December 17, 2019, HELP a was approved by the National Executive Board with initial funding of KK 230 million (US $ 67 million). Implementation started in January 2020. Since then some progress has been made, but there is also a lot of confusion building up, which could cause problems for HELP, and possibly do it the same. as the first loan program.
On the positive side, students were helped to obtain a National Identity Card (NID), which is one of the prerequisites for obtaining HELP. Following a partnership protocol between the Civil Registration and Identity Office of PNG and the Department of Higher Education, Research, Science and Technology (DHERST), special offices have been established. was set up in each of the 17 branches of the PNG Civil Registration and Identity Office nationwide to serve college students. In addition, NID offices were also established at the start of the academic year at the three main universities in PNG: the University of Papua New Guinea in Port Moresby, the Lae University of Technology and the University. Divine Word to Madang.
It was reported in February, that more than 10,000 higher education students from leading public and private universities and other small recognized public and private institutions across the country had already enrolled in a NID for the HELP loan between January and February 2020. Some of these students were TESAS students who requested HELP to pay the remaining 25% of the tuition fee, while others are non-TESAS students who requested the full tuition fee. As HELP is a non-compulsory institution, the decision to obtain a loan rests with the students and their parents or guardians.
To apply for a HELP loan, interested students received ‘declaration forms’ from their respective higher education institutions (HEIs). Applicants for the HELP loan must be approved by their higher education institution, after which DHERST will approve the transfer of funds to the relevant higher education institution.
At the University of Papua New Guinea, for example, students were asked to complete the declaration form and attach copies of their JNV, letters of admission (if they are in first year) and transcripts (if they are continuing their studies). Applications must be submitted to the Registrar for review and approval. Applicants must also provide original copies of their 10th and 12th grade certificates, FODE certificates (if upgraded through flexible and open distance learning), NID and 2020 student card. Confirmation of their original documents, applicants received their login credentials to apply online and fill in all their details as required by DHERST.
All of this appears to be good progress, but what is not yet clear is whether funds have actually been transferred under HELP from DHERST to HEIs. The budgeted funding of KK 230 million is generous, but PNG faces major budget constraints due to COVID-19. Recent protests by students at Port Moresby Technical College suggest that not all students will be fully funded.
Another problem is that there has been no indication of the terms and conditions under which these loans were granted. The Prime Minister earlier mentionned this interest will not be charged, but when are the loans due? Is it only if the graduate’s income reaches a certain level? If so, at what level and at what pace? No details about this can be found on the DHERST website, or elsewhere, as far as I know. There is also no information on how the loans will be repaid. Will it be through the tax system or through financial institutions?
While it is good to see the interest in the HELP program, it is unfortunate that the program started before the details were announced. Beneficiaries of the HELP program are likely to argue that since no one has informed them of the repayment terms, they are not obligated to repay their loans. The first loans may well be due next year, once students start to graduate. If the refunds are made through the tax system, has the Internal Revenue Commission started to plan for it?
Under the TESAS loan program, more than 7,000 beneficiaries borrowed 6.6 million kina between 2000 and 2007, but only one refunded the money. HELP risks the same fate unless loan applicants are made clear when and how they are expected to repay the money before taking out the loan.
I concluded my first blog arguing that “clarity, preparation and coordination among government executing agencies will be essential” for this second loan program to work better than PNG’s first. So far, the signs don’t look good.