Clarification On Deductions and Charges To Repay Higher Education Loans We would like to comment on the comments made by our various stakeholders through the media yesterday (Tuesday, February 2, 2021) and today (Wednesday, February 3, 2021) about deductions and levies in repayment of higher education loans.
Through these comments, among other things, our stakeholders have discussed the deduction rates and levies that we have found it appropriate to provide clarification of appropriate rates to increase the awareness of our customers and the general public as follows:
15% deduction from the beneficiary’s gross salary is not interest: These deductions are not interest as some stakeholders and the media have stated. These are the only total deductions deducted from a beneficiary from his or her monthly salary which are submitted to HESLB by the employer before the 15th of the following month;
Upon submission to HESLB, the money is deposited into the beneficiary’s account to reduce his or her debt, to pay two or three levies depending on the beneficiary’s debt – some are penalized for late repayment and some are not penalized.
Type of levy and its importance:
Operating Fee (1 Percent): This is deducted only once per lump sum when the beneficiary submits the first deduction. The purpose of this levy is to finance the operation of loan repayment activities such as seeking benefits; preparing invoices n.k;
Loan Cash Value (6%): This levy is levied annually on the outstanding debt (Outstanding Loan Balance) and not on the principal debt (Principal Loan).
The purpose of this levy is to enable the Government, through HESLB, to have a sustainable fund that will enable it to lend to other needy people without compromising the value of the loan funds that the beneficiary received while studying.10% penalty for late payment beneficiaries: This is a penalty aimed at reminding beneficiaries of the importance of starting repayment early. After 2016, the penalty was levied 24 months after the beneficiary graduated. Before it grew 12 months after graduation.
We would like to remind the beneficiaries of higher education loans who have not yet appeared, to come forward and start repaying to avoid punishment and end their debts so that others in need can benefit.
Dar es Salaam
Wednesday, February 3, 2021