STATEMENT BY THE MINISTER OF DEVELOPMENT PLANNING HONORABLE SELIBE MOCHOBOROANE ON SUSPENSION OF THE 50% STUDENT LOAN REPAYMENT INTO THE LOAN BURSARY FUND
Good Morning Ladies and Gentlemen from the Media,
Let me take this opportunity to welcome you to this Press Conference. Thank you for attending in large numbers. It is our firm belief that our message will reach the far end of this country.
It is with great pleasure that the Ministry of Development Planning informs the nation that the National Manpower Development Secretariat (NMDS) will suspend its policy that requires students to repay the 50% loan repayment into the Loan Bursary Fund (LBF) before they are awarded another scholarship to further their studies. Government believes that this will enable Basotho students in financial need to undertake postgraduate studies in priority skills determined by the LBF in line with the National Strategic Plan (NSDP) II priorities. The criteria for eligibility for the suspension will be determined by academic merit, NSDP (II) priority area of study and quota allocated thereof.
The objective of suspending the 50% repayment of loans is to enable access to bursaries to Basotho students in financial need to upskill their education from unemployable degrees to skills developing postgraduate studies. Many Basotho students have pursued mismatching degrees to the labour market and this has worsened unemployment, which is currently at 22.5% and has hiked poverty levels to 49.7%. These students are unable to secure employment to earn a living and subsequently repay their loan bursaries because most of them also come from impoverished families. Therefore, it is important to ease their loan repayment burden and be given the opportunity to further their studies to upskill into the labour market by studying matching postgraduate degrees as reflected by national priorities in the National Strategic Development Plan (NSDP) II. The need to suspend the 50% repayment of the loan bursary is, further, informed by the requirement to achieve the NSDP II Key Performance Area II of strengthening human capital to support the productive sectors with the aim of job creation and inclusive economic growth. The NSDP also seeks to entrench and mainstream the achievement of the SDGs particularly SDG 4 that is the education goal that aims to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
Furthermore, with the suspension of the 50% loan repayment, the LBF cannot be able to provide every loan bursary seeking Mosotho with funding given the unsustainability of the Fund. This is due to the fact that the Fund relies on Government subvention, which has been declining over the years coupled with ineffective loan recoveries. The latter is worsened by partial loan repayments by beneficiaries after completion of studies and the increasing unemployment and poverty situation in the country. Therefore, suspension of the loan bursary repayment requirement before one can be provided the next loan bursary can go a long way to ease unemployment, however, it will become unsustainable and futile if provided to every bursary seeking Mosotho student. The suspension can only be afforded under a rationalised approach. It is important to provide assistance to Basotho students with absolute financial need intending to pursue programmes identified as priorities in the National Strategic Development Plan (NSDP) II.
It is important to note that the above achievement could not have been realised without the approval of Cabinet, which has noted the high unemployment of the youth and the need to upskill their capabilities to match the labour market. Government hopes that with renewed and strengthened skills, the youth will be able to actively participate in the economy in pursuit of economic and institutional transformation for private sector-led jobs and inclusive growth. This is the message that we believe you as the Media, will eloquently relay to the nation, especially the youth, to take this once in a lifetime opportunity to develop their skills and capacities for the betterment of their country. I thank you for your attention