Is the Tertiary Student Loan Scheme Sustainable?
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The Tertiary Student Loan Scheme was one of the four education-focused financial aid schemes introduced in 2012 by then-President Dr. Mohamed Waheed and has since served as a means for students to pursue higher education without immediate financial constraints.
The scheme aimed to ensure accessibility to education regardless of your socio-economic background.
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However, for long-term sustainability, an effective student loan programme must balance disbursement and repayment.
Data on loan disbursement and repayment from 2019 to 2023 highlights a significant increase in funds allocated to students. In 2019, the scheme disbursed approximately MVR 300.42 million in student loans. Despite fluctuations over the years, disbursements more than doubled by 2023, reaching a peak of MVR 647.88 million.
The Tertiary Student Loan Scheme was one of the four education-focused financial aid schemes introduced in 2012 by then-President Dr. Mohamed Waheed and has since served as a means for students to pursue higher education without immediate financial constraints.
The scheme aimed… pic.twitter.com/OOsmyfZuu0— MV+ (@mvplusmedia) March 23, 2025
However, loan repayment receipts have not followed a similar upward trajectory. In 2019, MVR 83.57 million was recovered, but this figure dropped sharply to MVR 30.03 million in 2020. While repayments improved to MVR 75.47 million in 2021 and peaked at MVR 224.13 million in 2022, it declined again to MVR 96.19 million in 2023.
These irregular repayment patterns suggest potential challenges in graduates securing stable employment, as well as inefficiencies in repayment enforcement mechanisms. Additionally, broader economic factors such as inflation, high rent, and rising living costs could have impacted graduates’ ability to repay loans. Many students face financial strain post-graduation, with a considerable portion of their income directed towards essential expenses, leaving little room for loan repayments.
The disparity between rising loan disbursements and inconsistent repayments raises concerns about the scheme’s financial sustainability.
The Tertiary Student Loan Scheme plays an indispensable role in expanding access to higher education. However, addressing repayment inconsistencies through structured plans, enhanced enforcement, and financial literacy efforts, while also considering broader economic challenges, will be crucial to ensuring its long-term success and sustainability.
