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Higher Education Financing in Lesotho: Regulation to Realize Its Sustainability and Increase Inclusiveness

Published online by Cambridge University Press:  28 December 2020

Morongoe Nkisi Open the ORCID record for Morongoe Nkisi [Opens in a new window]
Morongoe Nkisi*
Affiliation:
University of Pretoria
*
morongoenkisi@yahoo.com
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Abstract

Higher education plays a central role in countries’ realization of their socio-economic development and in establishing a competitive, skilled workforce globally. The need for a skilled workforce, combined with scarcity in financial resources pertaining to higher education, has resulted in governments resolving to finance higher education. This article seeks to encourage adequate regulation to realize the sustainability of higher education financing in Lesotho, to achieve greater inclusiveness in institutions of higher learning. Through the National Manpower Power Development Council Act 8 of 1978, the Lesotho government established the National Manpower Development Council, which is aimed at facilitating the granting of loan bursaries from a fund administered by the National Manpower Development Secretariat. However, these efforts have faced challenges due to the increased cost of financing higher education. Poor management of the loan recovery function, increasing default by graduates on their repayment obligations and a lack of concerted efforts between the respective government departments threaten its sustainability.

Keywords

Higher educationgovernment higher education financingrevolving fundinclusivenesspoor managementsustainability
Type
Research Article
Information
Journal of African Law , Volume 65 , Issue 1 , February 2021 , pp. 25 - 45
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Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press on behalf of SOAS University of London

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Footnotes

*

LLB (National University of Lesotho), PGDip (University of the Witwatersrand, South Africa), LLM (University of the Witwatersrand). Doctoral candidate, Faculty of Law, Department of Mercantile Law, University of Pretoria, South Africa. The author is extremely grateful to Professor Corlia van Heerden for her invaluable and constructive comments and suggestions on an earlier draft of this article.

References

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17 Act No 8 of 1978, Supplement No 3 to Gazette No 31 of 25 August 1978.

18 Loan Bursary Fund Regulations 20 of 1978: Legal Notice No 20 of 1978, Supplement No 1 to Gazette No 29 of 11 August 1978.

19 NMDC Act, preamble.

20 LBFR, reg 3(1) and (3).

21 NMDC Act, sec 3.

22 Id, sec 10.

23 Id, sec 2.

24 Id, sec 10(2)(a).

25 Id, sec 10(2)(b).

26 Id, sec 10(2)(c).

27 Id, sec 10(2)(d).

28 Id, sec 10(2)(f).

29 LBFR, reg 5(a)–(d).

30 Loan bursary agreement, clause 3(a), (b), (c) and (d).

31 As the government of Lesotho provides higher education financing in a form of loan bursaries, these concepts must be explained. Under section 2 of the NMDC Act, a “bursary” is defined as “payment by Government of University, College, post-secondary institutions, or hostel fees or allowances to, or on behalf of a student undergoing an educational course and any other disbursements and expenditure for or on behalf of a student in connection with that course, and includes donor funded bursaries channelled through Government”. A student “loan” on the other hand consists of money that a student borrows to cover the costs associated with higher education expenses that needs to be repaid with interest upon the completion of the student's education. This type of financial assistance can be granted either by government or some financial institutions. See Cho, SH, Xu, Y and Kiss, DE “Understanding student loan decision: A literature review” (2015) 43/3 Journal of Family and Consumer Sciences 229 at 233Google Scholar.

32 Loan Bursary Agreement, clause 1.

33 LBFR, reg 7(3). The parties conclude what is called a loan bursary agreement.

34 Loan bursary agreement, clause 2 (a)–(f).

35 Id, clause 2(g).

36 Id, clause 2(h).

37 Id, clause 3(a).

38 Id, clause 3(b) and (c)(i) and (ii).

39 Id, clause 3(d)–(f).

40 LBFR, reg 11(3).

41 Id, reg 8(1).

42 Ibid.

43 Id, reg 8(2) and loan bursary agreement, clause 9(i).

44 LBFR, reg 8(4) and (5) and loan bursary agreement, clause 9(ii) and (iii).

45 LBFR, reg 8(6).

46 Long “Financing higher education”, above at note 1 at 6.

47 LBFR, reg 9(1).

48 Id, reg 9(2).

49 Id, reg 9(2)(a)–(c).

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62 Loan bursary agreement, clause 3(i).

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65 Mora interest is interest accrued on an overdue amount. As stated in Land Agricultural Development Bank of South Africa v Ryton Estates (Pty) Ltd and Others [2013] 4 All SA 385 (SCA) para 13, mora interest is a form of damages for breach of contract. The party that suffered the breach should be placed in the position that he / she should have been had the contract been performed.

66 Bhana et al Student's Guide, above at note 63 at 353.

67 Ibid.

68 TJ Zywicki “The law and economics of consumer debt collection and its regulation” (Mercatus Centre working paper, September 2015) at 2.

69 Id at 3.

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74 N Koeshe “NMDS introduces online registration” (29 March 2018) Lesotho Times, available at: <http://lestimes.com/nmds-introduces-online-registration/> (last accessed 4 November 2020). A debt collection agency called Jamali Holdings was engaged on a five-year contract to collect overdue debts, which ran into millions of Maluti as a result of defaults in higher education financing repayments. This contract was open to review after three years, at which point satisfactory performance would confirm the continuation of the contract, whereas unsatisfactory performance would result in the termination of the debt collector's services. The determining factor regarding performance was the amount collected on a monthly basis. However, upon review in 2015, it was concluded that the collector failed to meet this term of the contract but no reasons were advanced for the unsatisfactory performance. As a result, the contract was terminated for non-performance. Since 2015, no collection agency has been engaged.

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84 Financing Higher Education in Africa (2010, World Bank) at 56–57.

85 Means-tested means “a form of subsidy targeting, [which] attempts to distribute at least some higher education subsidies on the basis of need or estimated ability to pay”: Tekleselassie, AA and Johnstone, DB “Means-testing: The dilemma of targeting subsidies in African higher education” (2004) 2/2 Journal of Higher Education in Africa 135 at 135Google Scholar.

86 L Lochner and A Monge-Naranjo “Credit constraints in education” (working paper 2011-036, October 2011) at 29–30; Johnstone Financing Higher Education, above at note 77; R Shireman “Learn now, pay later: A history of income contingent student loans in the United States” (2017) The Annals of the American Academy of Political and Social Science 184 at 195.