On 5th January 2023, the Government of Rwanda published a new Ministerial Order, No.001/Mineduc/2023 pertaining to learners’ benefits and study loans, aimed at strengthening the governance of the Government Tertiary Student Loan and Bursary Scheme and reinforcing measures for recovery of the loans post-graduation. To this end, the following provisions regarding loan repayment are highlighted in this new legal framework.
- The Development Bank of Rwanda (BRD) now has the right to obtain information from a study loan beneficiary, public or private institutions, or any other person having information on the beneficiary. Furthermore, BRD now has the right to carry out an inspection at the place of employment to enforce recovery of the study loan after informing the employer of the beneficiary of the upcoming inspection in writing.
- After BRD does an inspection for non-compliant institutions/beneficiaries a written notification and is established and this notification has the value of an enforcement order. However, when an employer or a study loan beneficiary who is a self-employed worker or works abroad or works with diplomatic institutions operating in Rwanda expresses willingness to repay after receiving the notification, he or she may request to repay in installments.
- BRD also has the responsibility to provide a study loan beneficiary information regarding the study loan granted to them, the amount of the bursary allocated to them, the modalities of repayment, outstanding balances, and penalties in case of non-compliance.
- A study loan beneficiary who does not inform the employer that he or she studied on a study loan for it to be deducted from his or her salary, or an employer who does not declare, or deduct and pay the amount for study loan repayments from the salary of the employee, commits a fault and is liable to an administrative fine of 10% of the due amount.
- A study loan beneficiary or an employer who fails to repay the study loan on time pays a late payment interest of 1.5% of the due amount for each month of late payment.
- A study loan beneficiary repays it with a simple interest calculated only once on the total loan amount received. Undergraduate students pay a simple interest rate of 11% of the loan amount while graduate and postgraduate students pay 12% respectively.
It is important to note that a loan/bursary beneficiary has the responsibility to start paying his/her loan/bursary to BRD as soon as she/he gets an income.BRD strongly encourages all beneficiaries of the Government Tertiary Student loan/bursary Scheme who benefited from a “Bourse” since 1980 to contact BRD to establish their current loan status to avoid unexpected penalties.
All employers and business owners are also strongly encouraged to ensure that all their staff fills in the relevant form (https://www.brd.rw/student-loans/) to declare whether they have benefited from the Government Tertiary Student loan/bursary Scheme; in case their staff has benefited from it, the employer should ensure that their salary is deducted by the statutory amount. This will prevent the employer/business owner from being liable for penalties.
BRD and MINEDUC are launching a mass communication campaign on the new provisions of this new Ministerial Order to ensure compliance by the concerned stakeholders before its full enforcement on 1st August 2023.
BRD: Georgette Umutoni| email@example.com | +250788308276