Background

1. Introduction

Since the Government of Rwanda decided in July 2003 to establish the Student Financing Agency for Rwanda (SFAR) as a semi-autonomous agency with overall responsibility for implementing and managing all student financing schemes, the agency has been entrusted with the responsibility of information, of organization of the application process, the selection of candidates and the financial support to students in local and foreign HLIs.

SFAR has since then developed transparent and equity-based procedures for loan application to local and foreign HLIs and has started implementing these procedures in a strict way. Based on budget availability and Government priority areas of study, applications are processed and decision taken on who should benefit the bursary/loan.

After approval of the application by the SFAR Board, the successful candidate has to sign a Government contract which specifies mutual obligations among which loan disbursement. After the signature of the contract, SFAR will organize all financial settlements to the student and to the host HLI. For students in local HLIs, disbursement will cover mainly tuition fees, research fees and costs of living while for students in foreign HLIs, disbursement will cover mainly transport, tuition fees, research fees and costs of living.

The disbursement process has to follow a certain number of regulations and students are informed that not following SFAR regulations can lead to blocking of disbursement. For students in local HLIs, payments of living allowance are made on a monthly basis and for students in foreign HLIs, payments are made on a quarterly basis.

Registration as SFAR-loan student and disbursement of loans is organized at the start of the academic year. SFAR is organizing a set of operations and a viable system for data collecting, data validation, data registration and reporting concerning the whole process of disbursement.

2. Who qualifies for a loan

SFAR loans are offered to Rwandan students in HLIs (local or foreign) recognized by Rwandan Government. Categories of students who qualify for the loan include the following:

Form six leavers who meet the requirements (cut-off point) of the Rwanda National Examination Council (RNEC) and whose names appear on list published in IMVAHO to join local HLIs for the first time;
Continuing undergraduate students who perform well and being not repeaters (in local and foreign HLIs)
Graduate students pursuing Masters (in local or foreign HLIs) and PhD (in foreign HLIs). This award is based on academic merit and priority courses;

Eligibility

To be eligible to the loan, the student who applies for it from SFAR so as to enable him/her to pay his/her Higher Education must fulfill the following:

should have obtained a high mark in the national examination as determined by the Rwanda National Examination Council in science subjects or non science subjects and be admitted to pursue the same or similar courses at Higher education level.

Finalists from any level of studies at higher education should have obtained a first class/ "Distinction" note at the end of their level of studies and be admitted to pursue studies at the next level.

3. Who qualifies for a bursary

SFAR bursary is offered to Rwandan students in HLIs (local or foreign) recognized by Rwandan Government as may be determined by a Presidential Order.

4.How to apply for a SFAR bursary /loan

Local Bursary/Loan application

The student has to apply by filling in a loan application form (and attaching the required supporting documents) which is verified and signed by local authorities. The completed loan application form is sent to SFAR to be processed and a final decision is taken after using a means testing mechanism.

The list of loan beneficiaries is then published by SFAR as well as the list of non beneficiaries. After the publication of the list, the unsuccessful candidates can appeal and SFAR will review the case and take final decision.

Foreign Bursary/Loan application

The student has to apply for getting a loan by preparing a complete application file according to a standard checklist. This file will be checked by SFAR for completeness and will be evaluated by SFAR Board on specific selection criteria. After the evaluation a decision is taken and forwarded to the Minister of Education for final approval. After the final approval by the Minister of Education, SFAR publishes the official list of loan beneficiaries.

Rwandan students can also apply for foreign scholarships. In this case SFAR management is responsible for information, organization of the application process and the selection of candidates in collaboration with donor countries or organizations.

5. The means testing mechanism

With the adoption of the student loan scheme, the Government of Rwanda has instituted a cost sharing mechanism which determines how the Government and the parent/student will share the cost of education. The cost sharing is calculated on the basis of a standard pre-determined unit cost of education, which differs depending on the course. In addition to considering the national priority skills, the loan scheme is also based on the financial need of the applicant.

In order to support students who would otherwise not be able to fund their education due to financial reasons but who satisfy other conditions to access funding, it has been found it necessary to establish a “Financial Means Testing Mechanism” which is based on a number of factors, including among others, the student/parents’ income or wealth.

In order to ensure minimum disputes and claims, an electronic system will be developed and adopted and used in selecting loan applicants basing on the information provided on the application dossier.

6. Loan repayment

According to the law, the loan granted to a beneficiary to enable him/her to pay for his/her higher education must be paid back by the loan beneficiary at the end of his /her studies and after he/she has secured an employment or has any income or revenue that permits him/her to repay.

The loan repayment is done in two ways:

i) By deducting the loan from the monthly salary of the loan beneficiary, this is done by the employer. The employer deducts 8% of the gross salary every month until the total amount of loan is repaid.

ii) By paying directly to SFAR, this is done by the loan beneficiary himself/herself. The loan beneficiary has the right to decide between paying back at once the total amount or through installments.

7. Sources of funding

SFAR works with three sources of funding: Government budget available for loans to students in local and foreign HLIs, ii) money to be recovered from former loan beneficiaries, iii) grants and fellowships supplied by bilateral and multilateral support programs.

In order to contribute to the increased access of students in higher education, SFAR will operate proactive and entrepreneurial use of existing sources to the maximum and try to look for new sources of revenue

SFAR is the central agency in all student bursary/loan and all scholarship and fellowship related matters. Grants from donor countries and agencies should be used by SFAR for supplying bursary/loan to students and recovery of the loans should facilitate SFAR to support more students with loans.