The Influence of Students’ Loans Borrowers’ Characteristics on Default Rate in Tanzania

Abstract

<p>The cost of students’ loans defaulting has lead to a serious discussion among participants. Substantial attention has been made on the students’ loans and its impact on higher education finances while researches on students’ loans defaults have not been taken for more than a decade. Therefore this study examines the influence of students’ loans borrowers’ characteristics on default rate in Tanzania by taking into consideration the background characteristics termed as pre-college measures, these factors includes age, gender and attitude.</p> <p>This study was conducted in Dar es salaam region, were by five universities from the region formed the basis of the population and respondents encompasses only students who were loans beneficiaries from these universities/colleges. Data were collected from 150 respondents. Data collected were analyzed using Software Package for Statistical Science (SPSS) and the techniques used for data analysis were regression and correlation.</p> <p>The study concluded that age, gender and attitude has an influence on the students’ loans default rate. The study also recommends that higher education students’ loans board (HESLB) should conduct an attitude tests among loans applicants before loans provision by using personal interview and observation by competent psychologists on behavioural science by conducting psychomotor test to understand the attitude among the loans applicants, those with negative attitude should be declared ineligible for students’ loans. Age should be given priority by HESLB before loans provision only applicants with the age of 18-24 years should be considered as eligible for students’ loans. Strict rules and regulation against males applicants should be instituted by HESLB to ensure their ability and willingness to repay back the loans for instance presence of genuine grantor and adequate collateral security. Students’ loans beneficiaries should be educated by HESLB to reduce confusion on repayment process.</p

Managing Factors That Correlate to High Cohort Default Rate at Public 2-Year Community Colleges in Michigan

“…The problem at the center of the study was the student loan default rate and how it impacted the public 2-year community colleges in Michigan. A conceptual model (Nyahende, 2013) was used to present the impact of student loan default at the institutions. Nyahende's framework diagram-matically illustrated how various variables could impact student loan default rates.…”

“…Nyahende's framework diagram-matically illustrated how various variables could impact student loan default rates. The categorical diagram demonstrated how the student loan borrowers' age groups, gender, and attitude influenced the student loan default rates in institutions in Tanzania (Nyahende, 2013).…”

“…Researchers have examined how various student characteristics and institution-level variables, i.e., location; campus size; composition of the student body; faculty FTE; full-time retention and graduation rates; macroeconomic; and spending patterns had influenced the student loan default rate (Cabrera et al, 1992;Flint, 1997;Nyahende, 2013). The findings from (Cabrera et al, 1992) had suggested a limited impact on the student loan default rate.…”

“…The data extracted from the IPEDS suggests individual-level factors, i.e., age, gender, ethnicity and, not institution-level variables, significantly affected the student loan default rates. The conceptual framework of student-institution fit provided opportunities to examine the variables of borrowers to the institutions they attended, as reflected in (Nyahende 2013).…”

Determinants of the Penalty Waive by the Defaulters: The Case of Higher Education Loan Board (HESLB) in Tanzania

“…Higher education loan repayment has been one of the major challenges facing HESLB. Numerous studies [11,7,12,10,[13][14][15] Ndomba, 2009; Chawe [16], Komba [9], Kossey & Ishengoma [17], Madeba [18], (Nyahende, 2020) have addressed the HESLB financing to higher education in Tanzania identifying loan repayment to be the major challenges facing HESLB. In past years, HESLB used to impose a 10% penalty as a loan repayment strategy for the beneficiaries who failed to repay the loan after the grace period of 24 months following the completion studies.…”