Financing higher education in Tanzania through students' loans scheme and its impact on equitable access

Abstract

For the past three decades, African higher education (HE) has experienced several challenges spanning from financial austerity, affordability, accessibility, and academics brain drain, to dilapidated educational infrastructures. These challenges have not only limited access to HE on the continent but also has created social inequality in accessing HE. Although Tanzania has witnessed notable development in terms of HE access due to recent massification policies, inequality in accessing its HE as a result of financing it through student loans scheme still a challenge. Using Tanzania as a case, this paper examines how the financing of HE through the Students' Loans Scheme has been narrowing or widening the social inequality among students. The study on which the paper is based subjected secondary and primary data to discourse analysis to provide evidence on how HE financing through students’ loans scheme has increased access to HE and how inadequate financing of HE through the same creates social inequality in Tanzania, hence undermining the global efforts toward achieving the Sustainable Development Goals (SDGs). Findings show that the current financing modalities of HE in the country have, to some extent, widened access, on one hand, but have created social inequality among those with the ability to pay and those financed by the state against those without the ability to pay and not financed by the state on the other hand due to lopsided financing modalities. We recommend to the government to re-examine its HE financing mechanisms to have robust funding for all needy applicants regardless of their degree programmes and social-economic status (SES).

1. Introduction

On September 25th, 2015, all member states of the United Nations, adopted a set of goals that target eradicating poverty, protecting the planet, and ensuring universal prosperity come the year 2030 [1,2]. These goals were set as the world's new sustainable development agenda (SDGs). Goal number ten of the SDGs aims to reduce social inequalities in all forms including in education. Furthermore, the World declaration on higher education (HE) for the 21st Century among other things affirmed that participation in HE is a right [3]. To ensure this world goal is achieved, article 3 of the World declaration on HE urged nations with low enrolment to augment HE enrolment as an effort to expand HE access especially those from the low social economic background [3,4]. As such, the Tanzania government for the past decade has been striving to address issues about inequalities as part of its commitment to MDGs, SDGs, and the World declaration on HE [5]. These efforts include reforming the financing of higher education (HE) through a students' loans scheme in a bid to ensure students' equal access to HE especially those from low social economic status (SES). However, the government already acknowledges the challenge of financial resources and technology in achieving SDGs (ibid.). Certainly, the government's ability to finance all the students admitted to HE is constrained by limited financial resources set as a budget for HE. As a result, a large number of needy students who apply for loans remain unfinanced for their HE.

Generally, scholars largely agree on the criticality of access to HE as a means of establishing an equitable society. Undeniably, investment in HE has been as important as other levels of education due to both public and private rates of returns proven to benefit both individuals and society [6]. More importantly, HE is key in enabling access to a wide range of opportunities essentially in having a productive and better life [7]. Due to this reality, many African countries before the 1980s did not charge fees for HE with a view to provide students from socio-economically disadvantaged backgrounds with equal access to HE [8]. However, the introduction of Structural Adjustment Programmes (SAPs) by the IMF and World Bank in the mid of 1980s changed the landscape and role of the state in financing public services including HE. Following these changes, different countries assumed different modalities for financing the public services such as education and health. The most common approach to financing these services was cost sharing between the state and service recipients. In the case of HE, many African countries adopted the cost-sharing strategy using student's loan schemes. Studies show that student loan schemes have been established in about 70 countries around the world [9,10].

In recent decades, the loan scheme has become a popular state modality in financing HE, especially in developing countries dogged by meagre and inadequate financial resources for all students admitted to HE institutions. In Tanzania, for example, the Higher Education Students' Loans Board (HESLB) was established early in 2004 [11]. The reasons for introducing the students' loan scheme in the country were threefold—reduce public expenditure on HE and shift its costs to the major beneficiaries; improve the quality of HE to make it more competitive in the global labour market; and make HE more equitable and accessible. Overall, the HE students’ loan scheme in many countries serves as a strategy to increase HE access in a bid to achieve equity and equality.

The concept of equality in education is not only contested concept, but also attracts interest and debate among scholars [[12], [13], [14], [15]]. The concept of equality is well understood via compulsory education laws in which students are required to attend a certain level of education without bias and irrespective of their family background, race, and socio-economic status. However, HE has represented a discriminatory aspect to equality in HE from different social backgrounds [16,17]. Although research literature is replete with material on the subject of equality, equity and social justice, much of the existing literature is confined to—age, rurality, ethnicity, class, gender, region, disability, and religion [7,18,19]. Very little exist on the impact of financing HE through the students' loans scheme on social equality and access to HE. It is in this context that this paper examines the extent to which HESLB contribute to the country's drive towards equitable access to HE. It seeks to show that equitable access to HE cannot be achieved using the current flawed and lopsided means of financing HE through students' loans scheme.

Following this introduction, Section 2 of this paper highlights the basic facts about Tanzania's HE, its history, achievements, and challenges before providing a global overview of financing HE through the students' loan scheme in Section 3 whereas Section 4 delineates a theoretical setting that underpins this study. Section 5.1 and 5.2 present methods and procedures, respectively, whereas Section 6 focuses on financing higher education through students' loan schemes and inequality in Tanzania's HE. Section 6.1 examines how household income creates HE inequality whereas Section 6.2 discusses how financing HE through HESLB affects access to HE. Section 7 offers conclusions and handy recommendations based on the ongoing debate within the broader theoretical shifts of higher education financing systems, access and equity concerns.

2. Background of the study

2.1. Tanzania higher education system

Higher education in Tanzania as in many countries marks the final level of formal schooling. Higher education is constituted by universities, university colleges, and university centres. Besides, the provision of this level of education involves both public and private providers. The completion of HE programmes takes 3–5 years depending on the specific degree programme requirements. While in terms of governance, HE institutions in Tanzania are presented as semi-autonomous, but in fact, they have very limited both institutional autonomy and academic freedom due to state influence in its governance [20,21]. The Tanzania Commission for Universities (TCU) is in charge of co-coordinating and overseeing both public and private universities to ensure that no university becomes a degree mill.

The history of Tanzania's HE can be traced back to the early 1960s soon after the country's political independence from Britain in 1961. The history of higher education and the then Tanganyika's political independence are intertwined. Upon gaining its independence, Tanzania then Tanganyika (before forging a Union with Zanzibar to become Tanzania in 1964) as a country had only one higher education institution, which today is known as the University of Dar Salaam. It started as an affiliated college with the University of London. Later it became an affiliated college of the East African University together with Nairobi University College of Kenya and Makerere University College of Uganda [[22], [23], [24]]. Since then, the HE sub-sector has grown significantly from enrolling 13 students with only one faculty in 1961 to about 50 universities by 2017. From the 1960s to the early 1990s, higher education in Tanzania was entirely provided and largely financed by the state.

However, following the ushering of Neo-liberal policies under pressure from Bretton Woods institutions coupled with the need to expand higher education access, in the mid-1990s, the landscape of HE provisions also embraced private providers [22,23]. Since then, private providers have been legitimately allowed to establish and operate HE institutions and award academic degrees as per the Tanzania Universities Act of 2005 [22,25]. Currently, Tanzania has 50 universities and university colleges that enrolled 189,852 by 2016 [26]. This number is comparatively far behind that of the neighbouring country, Kenya, whose enrolment stood at 510,685 in the 2015/16 academic year [27]. Of the 50 universities and university colleges in Tanzania, 14 are public whereas 36 are private universities (PRUs) and university colleges [28].

Despite the fact that private universities in Tanzania has been in existence for the past two decades and a half, their contribution to HE access is relatively minimal compared to their numerical advantage over public ones. Indeed, their number has surged relative to public universities. For example, by 2017, private universities enrolled 73,128 students or 38.5% of the total student enrollments in the country. On the contrary, public universities enrolled 116,729 students or 61.5% of the student's enrollments in HE. This suggests that despite their number being more than twice that of public universities (PUs), PRUs have played a minimal role in the expansion of access to HE compared to PUs.

Normally, the degree to which the government manages to provide its people with access to a certain level of education is measured by Growth Enrolment Rate (GER) [29]. By 2009, the global GER stood at 26% [30]. Yet, for most Sub-Saharan African countries the GER has remained relatively low. For example, the GER for Tanzania's higher education has remained relatively low in the past decade when compared not only with those of developed countries but also with some rates within the sub-Saharan region. For the 2014/2015 year, the GER stood at 5.2% [31]. Although this rate is better than that of 2008/09 which stood at 2.5%, it is relatively low when compared to some other countries in the East African region such as Rwanda and Uganda which was 7.9 and 5.2 respectively in 2011 [32].

As such, this rate still casts a doubt on the role of the state in augmenting access to HE. At the same time, female student enrolment in Tanzania's higher education stands at 35%, having increased from 12.7% in 1987 [33]. This suggests that, although there have been some improvements in HE access, female student enrolment shows social inequality in access to HE. With the critical role of HE in today's era of the knowledge economy, these data raise questions about the role of HE in Tanzania in spearheading economic development.

3. Literature review

3.1. Financing higher education through student loans scheme: global overview

Financing of higher education through the students’ loan scheme is a global phenomenon as both developing and developed countries have to contend with financial austerity, which curtails equal access to HE. Due to financial austerity affecting most countries, the studentloan scheme has become a popular government approach to financing HE for both developed and developing countries [4,8,9,34]. By 2010 according to a World Bank report, the student loan scheme was already a financing approach to HE for around 70 countries across the world [9,10]. For example, in Asia generally and China, in particular, where there has been notable economic growth in recent years, the country has still been experiencing a substantial challenge in funding its speedily growing higher education systems [8]. Due to the funding challenge, as other post-communist countries, China has had a loan scheme in place as a strategy for funding its burgeoning student population which is estimated to be 20 million students—the largest student population in the world [35].

Other Asian countries such as South Korea, Japan, Malaysia, India, and the Philippines also have similar financing mechanisms to their HE. For example, Japan—where HE funding, to some extent, depends on student fees—largely relies on state-sponsored students through loan schemes although this substantially depends on the parents’ willingness to render support [35]. Generally, in Asia financial austerity has been one of the reasons limiting equal access to college opportunities among young men and women. In Africa, big as the continent is, access and equity to HE has long been one of the issues facing its higher education sector. Issues of age, rurality, ethnicity, class, gender, region, disability, and religion have been sources of exclusion and reciprocally underpin each other to create seemingly obstinate arrays of systemic social inequality [36].

The debate on financing HE in other African countries is equally hot and mainly assumes two opposing views. In Morocco, for example, this debate has taken two dogmatic positions. On the one hand, there is a group of stakeholders treating education as a human right and, therefore, arguing for the state to provide free HE to all admitted students irrespective of their economic status [18]. On the other hand, there is another opposing group that contends that education, including HE, is a private investment and, therefore, its beneficiaries should pay for it (ibid.). Based on these two dogmatic inconclusive stances held by stakeholders, states have been either taking the first stance with the view to democratizing HE or the second stance in a bid to foster economic efficiency. Since the latter view education as a private investment, it is directly linked to the labour market and a liberal perspective. Therefore, one may aptly argue that HE financing philosophy and mechanism impact on social equality, and so does the country's economic competitiveness, especially in the era of the knowledge-based economy. Based on both social and economic impacts, Bougroum and Ibourk [18] argue that reconciling the aims of education democratization and economic efficiency is the best strategy for addressing the issue of education financing for both developing and developed countries.

In the Organisation for Economic Co-operation and Development (OECD) countries, the issue of an efficient and equitable financing system for HE has long been debated by scholars and policy-makers alike [[37], [38], [39]]. In universities in OECD countries, HE financing largely come from the payment of tuition fees, with the self-funding approach being the strategy that allows each student to be at liberty to invest financially in his/her human capital by seeking a loan so that he/she can produce a return on this investment in the labour market [40]. On the whole, students' loan scheme is also common among OECD countries. Notably, in OECD countries, almost all the students in need of loans to finance their education get them to invest in their education. Although the students’ loan scheme is a global phenomenon, in some regions it is a recent approach to financing higher education. For sub-Saharan Africa, for instance, in the early 1990s, only about six countries had established student loan schemes—Kenya, Ghana, Zimbabwe, Lesotho, Nigeria, and Malawi [41]. Today, the loan scheme has become the mainstay in most African countries.

For Tanzania, the scheme was established with a view to creating a revolving fund to make the scheme a sustainable financing mechanism. The loan scheme covers the composition fee, stipends, fieldwork and research, stationary, and other faculty expenses. The official criteria for awarding loans to beneficiaries are stipulated in the HE policy 1999 and the Loans Act 2004 [11] which define illegibility to access a loan are students from poor families and have no other financial aid.

Upon their graduation, beneficiaries of the students' loans are to be charged with interest rates that are to be decided by the governing board of HESLB. However, before presidential decree of 2021, the beneficiaries who did not start repayment as scheduled (i.e., one year after their graduation) were also charged a retention fee on yearly basis. Furthermore, beneficiaries were also charged with a loan administration fee of 1%. As such, the repayment of the loan is set to be at least 15% to be deducted from the beneficiaries’ salary and is to be paid within 10 years.

3.2. Student's loans scheme and higher education access

As indicated elsewhere in this paper, the student loan scheme is a global HE education financing phenomenon evident in both developing and developed countries. In many parts of the world, student loans scheme come as a solution to financial austerity facing many education systems. The recent massification policies in HE have pressed much pressure on student financing making states unable to finance their growing student population. Research has shown that in many parts of the world, the student loans scheme has been effective in increasing student access to HE, although under certain conditions. In Thailand for example, scholars [42] show that HE massification was one of the reasons for the introduction of the Student Loan Fund (SLF) in 1996 following the Asian financial crisis. Further evidence indicates after 10 years, the Thai government introduced Thailand Income Contingent and Allowance Loan (TICAL) to replace SLF. TICAL was believed to increase HE access and make it more equitable.

While in Egypt, some scholars [43] argue that HE financing is biased against students from economically disadvantaged families, the enrolment rates by income level suggest that the poor have less access to HE than those from well-to-do families because of students’ loan system which is tied with entrance and very restrictive grade requirements which students from non-poor families have a better chance to attain because they are able to afford better quality secondary education as well as private tutoring. Examining whether the criteria expansion for student loan eligibility promotes college enrollment in Japan [44], revealed that the expansion of eligibility for HE student loans increased college student enrollment particularly male students from 0.5% to 0.7%. While in many parts of the world, student loans have been credited for augmenting access to HE, some scholars [45,46] argue that student loans, particularly in form of cost-sharing cause considerably higher tuition fees that consequently cause hardship for enrolled students. This is because the higher tuition fees as a consequence of student loans are deemed to hinder access to higher education.

Answering the question of whether or not access to student loans would explain the gap in university education attainment between students from Chilean wealthy and poorer households [47], examined the causal effects of two college student loan programs. Findings revealed that loan access leads to a 100% increase in quick college enrollment and a 50% increase in the probability of ever enrolling. More importantly, results revealed that access to student loans efficaciously eradicates the income gap in enrollment. In their systematic review of 71 studies [45], compared more than 200 causal effects of outreach and student financial aid interventions on college access and completion rates of disadvantaged students in HE. The findings indicated that need-based grants did not systematically increase college enrolment rates, but rather lead to amelioration when adequate finances are provided to cater for unmet student needs.

Although there are numerous studies on the effect of student loans on HE access, the existing studies do not offer an adequate conclusion on HE access and inequalities. While the literature on the topic of student loans is replete with literature from all parts of the globe, the question of whether or not the current student loans scheme in Tanzania expands or narrows down education access and social equality is yet to be answered.

The present study highlights key findings important for both researchers and policymakers regarding the current financing modalities. While the student loans scheme is critical for increasing access to HE, overall, the financial lens alone is inadequate to understand and tackle inequalities in HE access because funding strategies are also shaped by other factors other than financial aid.

3.3. Theoretical setting underpinning higher education students’ financing

This paper is designed within the theoretical shifts of education financing and access working on the major assumption that the education financing modality expands or narrows down education access and social equality. In light of this assumption, there are two modalities of financing higher education that are assumed to influence access to education and social equality. These are public financing and private financing. The financing of higher education is challenging not only for developing countries but also for developed ones. Although there is a need to increase access to HE, governments claim to have inadequate resources including financial resources for education. This raises the question of a hot ongoing debate on who is responsible for higher education costs [35]. As described in the previous sections of this paper, three theories provide adequate explanations on who should pay for education. Tackling the question of who is responsible for higher education financing takes the debate back to issues of access and social equality. There is a group of scholars who argue that access is expanded when financing is diversified and made sustainable for private individuals. It is simply because there would be numerous providers to widen the choices while improving quality. For example, Johnstone [48] contends that the basis for cost-sharing emphases a belief in greater efficiency (when there is a charge or a price that suggests at least some of the real costs and trade-offs involved) and quality (because tuition induces both a hardworking student and one who is more perceptive and demanding of the institution; and institutions provide what the student, as well as potential employers want). In fact, this is the stance taken in this paper although this would only be effective if there would be possible if the state would provide loans to all needy students so that to give equal chance to all students admitted to accessing HE.

4. Methods and procedures

4.1. Methods

This study adopted a case study design which was coupled with the qualitative research approach for in-depth scrutiny of how financing mechanisms through students' loan scheme affected equitable access to HE among student applicants. This approach was considered best in this research because it represented a unique case of a country that has different priorities, plans, cultures, and policies for financing its education system. This paper draws on both primary and secondary data sources to examine how the financing of HE through the students’ loan scheme affects social equality inTanzania society. Given the nature of data sources, this paper employed both content and thematic analyses of purposively selected HE financing and HESLB documents in generating data for this study, particularly on how HE financing curtail access to HE and the way it may create social inequality in society.

Content analysis is one of the research techniques in social science research used to build replicable and valid implications by inferring and coding textual material [49,50]. In the present research, different documents including journal articles, loan issuance guidelines, the Higher Education Students Loans Act, 2004, The Tanzania Higher Education Policy of 1999, and government reports were used to generate data on how the financing system of HE through HESLB impacts on access to HE and social equality. The document review was regarded as sufficient for generating data for the present study since it generated information obtained from credible and reliable sources, widely shared, and owned by credible and reliable university and government organs. The documentary review was complemented by some interviews with students for reliability and triangulation of data. A total of twelve continuing students from three HE institutions—Ardhi University, Mkwawa University College of Education, and the University of Dar es Salaam participated in interviews.

4.2. Procedures

After settling all the ethical issues with universities under review in this research, all the documents for review were accessed and reviewed for their suitability and inclusion as data sources. As such, three criteria were used to select these documents: i) Journal articles from refereed journals; ii) financing policy documents and those prepared to communicate to the student loan applicants and the general public on the procedures, eligibility and other financing related matters; iii) documents prepared as a reaction to the public about the state of the art on HE student loans in Tanzania; and iv) the documents under scrutiny were all official [51]. For these data to make sense, all the documents were systematically analyzed to determine how financing mechanisms affect access and social equality. Based on the analyses, researchers developed the themes deductively and inductively for sub-themes [52]. For the case of interviews, three from each university surveyed making a total of nine interviews. Upon invitation to participate in this research, Interviewees who were willing to participate signed consent forms upon an assurance of anonymity and confidentiality of data they would provide. Each interview lasted for 30–40 min. Interviews were conducted after the analysis of documents to make the triangulation more effective.

5. Results and discussion

The present study aimed to examine the financing of higher education in Tanzania through the students' loan scheme and its impact on equitable access. Therefore, sub-sections 4.1, 4.2, and 4.3 presents the findings and discussion of this study.

5.1. Financing HE through students’ loan scheme and equitable access to HE in Tanzania

For Tanzania, as a point of reference, the inception of the student's loan scheme followed the establishment of the HE Students' Loans Board (HESLB) by Act No. 9 of 2004 and its amendment of 2007 to manage government student loans. The aims of its establishment were twofold—to assist financially needy students who secure admission to accredited higher education institutions in and outside the country, and to recover all the loans disbursed to beneficiaries since 1994. HESLB was also established as an effort to implement the 1999 Tanzania higher education policy, which acknowledges the importance of helping needy students for an effective and efficient agency for higher education financing to evolve. Ideally, these noble goals had to be achieved by establishing a revolving fund to create a sustainable funding mechanism aimed to assist students from poor and low-income families [53].

According to the existing legal framework that established the students' loans scheme in Tanzania, the issuance of loans to “eligible students” entail any Tanzanian admitted in HE and meets the stated criteria under section 17(1) of the Loans Act. As such, the eligible student or applicant is an individual who has no financial aid from any source or sources to cater for HE [54]. Although this definition may seem to be clear, and that many of the needy students attended government-owned schools which charge lower fees compared to private schools, and thus mainly enrol children from poor social and economic backgrounds, some of these students have been denied loans by HESLB [55,56]. Along with the definition of a needy student, the HESLB has also established guidelines which are revised each year, which understandably seem not to fall within the scope of the Loans Act 2004 definition. For example, in addition to the inability to pay, the HESLB assesses the neediness by considering issues such as priority programmes, students' orphanages, and parents' disabilitie, some of the most considerable criteria for loan issuance. Therefore, for applicants from poor families to access loans, they are necessitated to be admitted to the priority programmes which is not necessarily their choice. As a result, those admitted to social sciences and humanities which are not priority programmes for loan issuance criteria, have little chance to access student's loans.

While the Tanzania higher education policy proclaims that student loans should be issued to needy student applicants [11,53], loan issuance based on priority of the study programmes is against the existing HE financing policy. Therefore, it is questionable whether or not the existing HE financing policy imperatives widen access and sense of equality in accessing students’ loans for HE. Based on the set criteria and particularly the priority of science programmes, those in humanities for example, they have little chance to access loans. Additionally, not all orphanage cases imply the inability to pay for HE; in fact, some orphan applicants are economically better-off than those with both parents. However, not financing some students admitted in non-science and education programmes just because they are not important to the government policies as well as other groups of student applicants denies equal access to HE, especially for those pursuing humanities, social sciences and other non-priority programmes. Consequently, this lopsided financing creates inequitable access to HE.

Although the establishment of the student's loan scheme has significantly expanded higher education access, it has failed to provide adequate and equal access to loans to all needy students who apply for financial assistance every year. For instance, as Table 3 illustrates, although the number of loan applicants and the attendant budget for student loans has been increasing, the trend of students who had access to loans and those who could not do so for various reasons including government budgetary constraints have also significantly increased. This suggests that the mechanism used to offer loans to some and not to others creates social inequalities among students that spill over to the wider society at a later stage.

Table 3.

Composition of beneficiaries by parents’ occupation and income level in % terms (N = 390).

Occupation	Professional	Administrative/Technical	Skilled/Semi-Skilled	Self-employed	Unskilled	All
Mother	19.8	6.3	7.7	8.1	58.5	100
Income Level	High	Medium High	Medium	Medium Low	Low

Source: Adopted from Dachi, (2021).

As this type of funding scheme is a loan from the state offered to the needy students that has to be repaid, it is imperative to offer loans to all the needy applicants regardless of their degree programmes, or other criteria the HESLB uses, which largely has failed to be fair and just to all the loans applicants. For example, applicants who fail to secure a loan for the first round are given a chance to appeal against the HESLB decision. A good number of them manage to get a loan from the board following the appeal. This may suggest that the mechanisms used to screen needy students are not effective and may lead to some loan applicants with no idea or interest to appeal to losing their right to education and, hence, creating inequality in access to HE. In light of fairness, the government would be expected to offer loans to all who apply but make sure that it has a strict mechanism of repayment. The repaid funds would create a sustainable funding which would facilitate loan offerings to other needy students in future. One would argue that the soft repayment mechanisms in place had made the government reluctant to offer more loans to students that may fail to repay them.

Generally, the government's effort to increase the amount of student loans has been notable. For example, by 2012, the loans issued to needy students by the HESLB since its inception amounted to TZS 1.1 trillion (USD 1.7 billion) disbursed to 168,353 students [57]. Despite this huge amount being issued to the HE loan applicants over the past two decades, the government has been unable to issue loans to all the needy applicants. Table 3 indicates the description of the trend in terms of those who apply for loans from the HESLB, those who are issued with loans and those who are not. The current loan dilemma in Tanzania can be eased by the HESLB offering loans to all the needy students regardless of whether their families can pay or not and regardless of the degree programmes they are admitted to because a loan for education is an investment that has a strong association with country's GDP [58] and that it is a loan and therefore, beneficiaries will have to pay back.

Table 1 presents a snapshot of the trend in higher education loans issued to applicants against non-loaned. The data in Table 1 suggest that from the 2012/2013 to 2017/2018 academic years, about 39%–51% of those who applied for loans to the HESLB were not successful. While applying for a loan may suggest the first sign of loan neediness, therefore, these data may further suggest that the non-loaned applicants (i.e., 39%–51%) were suggestively denied access to university education, hence causing social inequality in HE. Even though there has been a growth of students receiving loans, a good number of them did not because they were not needy, but because the budget for that fiscal year did not suffice to cater for all eligible.

Table 1.

Trend of Loan Applicants and Allocations by the Government through HESLB for Five years from 2012/2013 to 2016/2017 FY.

Year	No. Of Applicants	No. Of Allocated	Percent of Allocated App.	No. Students not allocated
2012/2013	49,914	29,097	58%	20,817
2013/2014	55,033	33,494	61%	21,539
2014/2015	62,359	29,473	47%	32,886
2015/2016	NA	NA
2016/2017	NA	NA
2017/2018	61,000	30,000	49.2%	31,000
Total	228,306	122,064		106,242

Source: Researcher's compilation from Nyahende (2017), TCU, and other reliable sources from the government. *Note: NA: Data were not available.

Overall, the HESLB has been able to issue only 47%–61% of student's loan applicants each year. However, the trend of applicants allocated loans has been declining for the period under review. Kossey and Ishengoma [9], for example, noted that the government severally has been unable to allocate sufficient financial resources to enable loan schemes to meet their statutory obligation of issuing loans to needy students. Similarly, other pieces of evidence indicate that for three fiscal years from 2012 to 2015, the government set more or less the same amount of budget for student loans despite the increasing number of students enrolled in HE institutions and those who apply for loans each year [4,59,60]. Implicitly, many of those loan applicants failing to secure HELSB loans also fail to access HE which, consequently and inevitably, creates a social inequality between those with access to HE through government funding via HESLB and those whose access was constrained by the state's problematic funding mechanism. Such a challenge mirrors a similar trend to students' schemes in other African countries as these schemes operate on shoestring budgets that cannot cover their operational costs and absorb the rising cost of higher education and expanded enrolments in many universities [4,9,59,61]. Arguably, because Tanzania is a developing country with 28% of its population living under 1 US dollar a day, not all its citizens can afford to pay for their children's HE as its cost is higher than the average per capita income of an individual citizen. On the whole, the mechanism used in loan issuance in Tanzania may be curtailing equal access to higher education and, consequently, creating social inequality.

5.2. Household income and higher education inequality

Sub-Saharan African countries, Tanzania inclusive have long been the world's poorest region. Evidence indicates that 75% of the world's poorest population lives in Sub-Saharan Africa [62]. This poverty rate indicates the highest levels of absolute poverty prevailing in Sub-Saharan Africa than in any other area of the world. For example, between 1990 and 2005, the number of people living under the new poverty line of 1US $ a day amounted to 100 million people in the area [62], which is the largest in the world's history. The poverty indicators in the region have implications for Tanzania, one of the Sub-Saharan African countries, as well. They suggest that only a few of its people (i.e., parents and guardians) have the ability to pay for their children's education including meeting the higher education cost. More importantly, the per capita incomes for Tanzania for the past decade ranged from 771US$ in 2010 to only 1097US$ in 2018 [63].

This individual income per year suggests being among the lowest per capita income in the Sub-Saharan region. On top of that, the population below the basic needs poverty line reported in 2017 was 28.2% whereas the population below the food poverty line was 9.7% [26,63]. The parents' and guardians' inability to pay has also been acknowledged by the Tanzania government's policy measures to abolish school fees for primary and lower secondary education as a means of ensuring universal access to primary and secondary education. In light of the household social-economic status, an aggregate per cent of the population that lives below the basic needs poverty line, it is clear that it would be difficult for many families to afford education expenses for their children including that of HE. Supporting this argument, Lee (2015) as cited in Ref. [64] noted that “… the majority of higher education students are from, and stay within, the top 20% of Tanzania's income spectrum …” (2015, p. 120). As such, the findings from the education sector analysis revealed that higher education students from high-income groups appropriate a glaringly large share of student loans than their representation in the total student population (URT, 2011; Dachi, 2021). Therefore, household income differentials, arguably, may create social inequality between those fewer with better income against those many with poor household income.

Table 2 shows that loan beneficiaries whose parents/guardians have less than secondary education were much represented in the study institution than other groups. Data from Table 2 further shows that, overall, the number of loan beneficiaries whose parents'/guardians have tertiary or higher education is greater. Using the data in Table 2, one can argue that in per capita terms, students whose parents are in the high-income group spend a relatively larger portion of loans from HESLB compared to their number in this sample. This suggests inequities in HE student loan disbursement still exist regardless of the HESLB's tireless efforts to issue loans to all qualified and needy applicants.

Table 2.

Composition of beneficiaries by parents’ education levels in % terms (N = 390).

Level of Education	No Schooling	Primary	Secondary lower level	Secondary Upper level	Tertiary/Higher Education	All
Mother	10.3	57.4	12.8	2.6	16.9	100
Income level	Low	Medium-low	Medium	Medium-High	High

Source: Adopted from Dachi (2021).

As argued elsewhere in this paper, so long as what the HESLB offers is a loan and not a grant, the strategy should be to offer it to all the needy students instead of not offering anything to some applicants when the HESLB still lacks a viable and fair mechanism for identifying neediness without bias. Therefore, whatever measure the HESLB uses to assess the applicants' neediness (i.e. the now famous means-testing), a good number of loan applicants fail to secure such HE loans despite showing evidence attesting to their being needy in their applications to affirm their eligibility. As such, it has long been difficult for the HESLB to ascertain the poor without feasible, sound, and unbiased mechanisms. Despite the growing number of students as a result of HE massification policies, which is in tandem with the number of loan applicants, the number of those who access loans has remained low as Table 1 illustrates, hence creating inequitable HE access between those offered loans and those not. Some existing evidence [4,65] indicates economic hierarchies between poor and well-off families favour students from wealthier families to access loans because they mostly attend better public and private schools with good teachers and other educational facilities, hence perform well in science subjects which is a HESLB's criteria for joining priority programmes mostly offered loans.

Some studies further indicate that at the University of Ghana, the Kwame Nkrumah University of Science and Technology in Ghana, and the University of Dar es Salaam, students from low socio-economic backgrounds were severely under-represented in all the programmes [16]. The subject area of education attracted the most students from deprived backgrounds in Tanzania and Ghana. Although this is an important pathway, it is also a profession in Africa with a low exchange rate in the labour market, thus reinforcing economic hierarchies.

5.3. Higher education financing through HESLB and HE access

As presented elsewhere in this paper, the HE financing policy in the context of the Tanzania students' loan scheme provides an avenue for the government to provide loans to needy students so that they can access HE. In fact, Tanzania has been issuing loans to HE students for almost three decades even before the inception of HESLB as an approach to increasing access to HE. However, there is still a good number of students, who do not access HE due to the current lopsided financing mechanisms that do not provide equal opportunities to all SES groups to access HE. A growing corpus of literature indicates low participation in HE among students from low social economic status [[66], [67], [68], [69]]. For instance, according to UNESCO Institute for Statistics [69], only 48% of HE students benefit from the government's loan scheme and of these less than 10% were from low social economic backgrounds. Additionally, in 2010 only 32% and 33% of students enrolled in public and private HE institutions respectively were from low-social economic status (SES) backgrounds while 68% and 67% enrolled in public and private HE institutions respectively were from high SES [67]. The lopsided financing mechanisms in this study were pointed out as a major cause for inequitable access and low participation in HE. Further empirical evidence [64] show that parents' income level determined the representation share of loans from the state. Table 3 indicate the relationship between parents' income level and student representation on the share of loans that consequently would determine access to HE.

Table 3 indicate that students whose parents are in the middle-income category are relatively well represented compared to those in the high-income category. Overall, data from Table 3 suggests that in aggregate terms, students whose parents fall in the category of low- and middle-income groups were better represented in the sampled universities compared to the high-income category. Even though students from low and middle-income groups appear to be well represented on the loan share, there is still a public outcry regarding other students being denied loans while they are from low and middle-income groups. While there are no official documented statistics on the number of unsuccessful applicants not joining universities every year due to financing difficulties, some evidence shows that there are students who join universities without proper funding who have resorted to begging their lecturers and fellow students to make their living. For example, Chibwete [70] observed that some HE students were engaged in indecent and immoral behaviour as a coping strategy due to a lack of funds to support their HE costs. A similar observation was made by Ref. [19] who pointed out that lack of financial resources has constrained equal access to HE as the state was unable to support all the HE loan applicants. Interviews conducted with some students revealed further that some of them decide to engage in indecent and immoral behaviours such as prostitution to earn some funds for their living expenses and fulfil their dream of having a university education. For example, during interviews, students had varied opinions:

I hoped to access a loan which later wasn’t successful while I was already at the university. I have decided sometimes to beg my colleagues to make out a living. I am determined and I want to achieve my dream (RP3, University Z).

Another interviewee had the following:

I decided to join university using some contributions from relatives as my parents could not have the economic ability to pay the cost of a university education. But it has been so hard for relatives to bear this cost. Sometimes I have to find alternative ways to make my leaving although not decent (RP3, University Y).

Further evidence from interviews conducted among undergraduate students in Tanzania's universities revealed that the HESLB considers students' orphanages and parents' disabilities as one of the most considerable criteria for loan issuance. Students claimed that despite these criteria being well known to the applicants, justification of orphanage and disability remained a challenge due to documentation problems prevailing in developing countries such as Tanzania. In consequence, a good number of students have failed to access loans not because they were not orphans, or their parents were not disabled but because they could not justify their orphanage and parents' disability status using official documentation. For example, in an interview at one of the universities, one of the interviewed students explained:

I am an orphan and applied for a loan, but my application was not successful just because I could not prove my orphan status using official documents. My parents died way back when I was young. Yet the deaths of my parents, as is the case in rural areas were not properly documented (RP1, University X).

In the same vein, another interviewee said:

The board is not fair, last two years my brother was offered a loan because our parents are poor and disabled, but this year my application wasn’t successful with the same family status (RP2, University Y).

Similarly, other students lamented over the type of school one attended as a criterion (i.e., public against private schools). The general assumption was that those who had attended private schools came from well-to-do families even when this was not always the case. There are cases of some students attending private schools through charity and philanthropy because some Non-governmental organisations (NGOs) sponsored their studies either due to the abject poverty of their families or their orphan status. But when they join universities and the HESLB sees in their application documents that they had attended private schools they are denied accessing loans. For example, during an interview, one of the interviews from one of the universities said the following:

[…] I was denied getting a loan because I attended a private school, but my parents are very poor, and they couldn’t afford to pay for secondary education until when I was sponsored by a religious organisation (RP2, University Z).

Similarly, another interviewee from university Y had the lowing to affirm:

I couldn’t access the loan on the ground not clear to me. To make a living at the college, I have been begging from Good Samaritans and relatives to finance my studies, sometimes I think of quitting my studies, imagine I sometimes just have one meal a day (RP4, University Y).

In many countries that have this system in place for financing HE students, they have a well-established mechanism of identifying needy students for loan issuance. As indicated elsewhere, no record could be found on the number of student applicants who failed to get into universities for lack of financial support from the HESLB. Nevertheless, it appears the number is significant because the HESLB since its inception has been able to offer loans to between 41% and 61% only of the total loan applicants each year. For example, according to UNESCO Institute for Statistics [71], only 48% of HE students in Tanzania benefit from the government's loan scheme. Although the loan scheme in financing HE has been popular in the past two or three decades in many countries, in Tanzania—the point of reference for the current study—there is an issue of access to HE as a result of a mechanism the country applied in loan issuance that in fact limited HE loan access to students aspiring to realise their dreams through this scheme. Generally, the Tanzania Higher Education Policy (1999) provides a general framework for HE access by creating a revolving fund that provides financial assistance to needy HE students [53]. However, it has been unable to provide universal access to all needy applicants from all disciplines.

One of the major challenges in financing HE in Tanzania through the students' loan scheme is the budgetary system employed by the state. Normally, the government set the education budget including students' loans for a particular fiscal year even before students applied for such loans, before the HESLB could screen and determine genuine needy students. As a result, the budget set aside for the students' loans, especially for first-time applicants, failed to cater for all loan needs not because they were ineligible but because the budget for that year could not accommodate all the needy students. This challenge has severally been raised by HESLB officials and even the government itself [19,59,67,72]. Acknowledging this challenge, the government has long been making efforts to invigorate this situation by increasing the HESLB budget on annual basis. However, since the number of student applicants also increases every year, a lot of needy students are left without loans, hence failing to access HE. For the past several years, the HESLB has not issued more than 61% of all loan applicants. For example, for the 2017/2018 academic year, only 49.1% of fresh loan applicants were issued loans [72]. This situation suggests that the rest (50.9%) of the budding students who applied for loans faced difficulties in joining universities due to their parents' and guardians’ inability to pay for their education. In so doing, only a few with the ability to pay and that 49.1% financed by the government through loans may have access to HE. Arguably, the lack of adequate state funding through loans may have constrained them to access HE and, consequently, this may create a social inequality among students with a desire to join HE. Furthermore, this situation may undermine efforts to meet the sustainable development goals in the HE sector. Given the existing Tanzania socio-economic status, one can deduce that more than 50% of the household could not meet the HE student cost and, therefore, relied on their children to secure loans to access HE without financial constraints.

On the whole, the Tanzania government has put in place both policy and guidelines for loan disbursement to HE students. The policy aims to achieve four objectives—creating a sustainable HE by adequate resource reallocation, achieving globalization and international competitiveness, social democracy and governance, the need for specialised skills, and new science and technology [53]. The private financing of HE in Tanzania is based on the assumption of the private rate of returns of HE, which is estimated at 15% higher than the social rate of returns [73]. This argument notwithstanding, education is one of the basic rights requiring the government to invest in education and support those unable to meet the HE cost. As the current financing mechanism is a loan scheme and requires beneficiaries to repay what they secure as loans, there is no need to exclude those who qualify as the present situation has revealed. Indeed, the argument of less social return of HE cannot hold water.

6. Conclusion and recommendations

This paper has explained how the current financing mechanism of HE in Tanzania through the HESLB scheme limits access to HE and how it may, actually, be creating social inequality among applicants and society at large. In light of the issues raised, it is worth noting that the current mechanisms in use for loan issuance by the Tanzania HESLB are lopsided and largely ineffective, and prone to barring some applicants to access HE even when they qualify for the HE loans, hence creating social inequality in the society. Thus, the Tanzania government should find a sustainable funding mechanism capable of offering loans to all applicants regardless of their socio-economic background. In addition, it should establish repayment strategies that will help ensure all the Tanzanian HE loan beneficiaries repay their loans to facilitate the creation of the much-needed revolving fund for HE. Furthermore, the government should establish good and viable criteria in its means-testing for evaluating the neediness of the students to avoid creating a social inequality among applicants and the society at large. This can be through expanding the scope of neediness in terms of all those who apply regardless of the priority programme since what they are offered it termed as loans and they will have to pay back. The current system subjects even needy students to exclusions primarily because the current system is not fool-proof and has loopholes.

Author contribution statement

Samson: Conceived and designed the study; Performed the experiments; Analyzed and interpreted the data; Conducted the analysis data; Wrote the paper.

Johnson: Analyzed and interpreted the data; Analyzed and interpreted the data; Wrote the paper.

Funding statement

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Data availability statement

Data will be made available on request.

Declaration of interest's statement

The author(s) declares no competing interests.

Additional information

Supplementary content related to this article has been published online at [URL].