Uganda has law to jail employers over student loans advanced to employees

Kampala, Uganda (PANA) – Ugandan employers are up in arms against a law that exposes them to ten years in jail if they fail to  disclose information about an employee to help in the recovery of student loans advanced to them by the government.

The Higher Education Students Financing Act, 2014, requires employers to inform the relevant board about that person’s employment and remuneration, and then remit to the board a specified monthly amount until the loan is paid up.

“Where the employer or employee has not informed the board, an employer commits an offence and is liable on conviction to a fine not exceeding two hundred and forty currency points or imprisonment exceeding 10 years or both,” the law says.

Loans are advanced to academically good but financially needy students to attend university. The students are then required to pay off the loans when they start working.

The government of Uganda started the students’ loan scheme for universities in 2014, proving loans to about 2,000 students per year. This is in addition to another 2,000 students who the government fully sponsors at public universities based on academic merit.  

Employers expressed their displeasure about the law during a meet up with the relevant board on Friday.

Ms Husna Natukundah, head of human resources of a plastics making company, said government should not shift the obligation of the students on their employers.

“I feel there is a lot of obligation you are putting on employers yet this is another person’s business. When it comes to deductions, my obligation as an employer is to disclose the position of an employee, when they joined, salary and ours should be to encourage them to pay back but how you recover the money should be your business not ours,” Natunkundah said at the function.

The employers met with top executives of the Higher Education Students’ Financing Board to discuss the workings of the scheme.

-0- PANA EM/AR 11May2019