Former beneficiaries of higher education loans and their employers have been warned to honour repayment obligations, with the Higher Education Students Loans and Grants Board (HESLGB) cautioning that failure to comply may attract penalties.
The Board says recovering the loans is essential to ensuring that more deserving Malawian students get an opportunity to pursue higher education and contribute to the country’s development.
In a statement, HESLGB said every repayment made by former beneficiaries helps create opportunities for other students who need financial support to access universities and colleges.
HESLGB has clarified that beneficiaries who fail to repay a student loan without reasonable cause may face civil proceedings.
It has explained that beneficiaries must commence repayment within two years after successfully completing or discontinuing their studies and those in formal employment are expected to make arrangements with their employer for monthly salary deductions and ensure that the deductions are remitted to the Board.
However, self-employed beneficiaries are required to commence monthly repayments to the Board within two years of engaging in self-employment.
The Board also outlined the responsibilities of employers, that they are required to ask newly recruited employees to declare whether they are beneficiaries of an HESLGB student loan and to notify the Board within 30 days of employing a beneficiary.
Employers must also facilitate monthly salary deductions and remit the repayments to the Board within the prescribed period.
In addition, they are expected to provide employment information relating to loan beneficiaries when requested by the Board, and to remit all deductions made from beneficiaries’ salaries within 15 days after the end of each month.
HESLGB warned that the Act provides penalties for non-compliance and an employer who knowingly fails to notify the Board of employing a loan beneficiary may, upon conviction, be liable to a fine of up to MK1,000,000.
Furthermore, an employer who fails to deduct or remit loan repayments within the prescribed period shall be liable to pay a surcharge equivalent to 10 percent of the monthly repayment for every month, or part thereof, during which the repayment remains outstanding.
