Challenges with higher education financing

• In Event: Financing Higher Education in Sub-Saharan Africa and South Asia

Proposal

Challenges with higher education financing in Sub-Saharan Africa and South Asia are well documented. Access to higher education is a key determinant of socioeconomic mobility and individual success. However, students face numerous challenges in obtaining student loans, thus hindering their ability to pursue higher education.
This presentation provides the findings of two systematic literature reviews on the challenges faced by students in accessing student loans in Sub-Saharan Africa and South Asia.
For Sub-Saharan Africa, the systematic literature review was conducted by analysing over 28,112 articles to gather insights on the challenges faced by students in accessing student loans. The findings reveal several common challenges faced by students in the region. These include limited access to loans, high-interest rates, lack of financial literacy, inadequate credit bureau coverage, cultural stigmas, limited job opportunities, inequitable loan distribution, poor loan administration, limited loan options, and the absence of loan forgiveness programs. Country-specific examples and statistics further illustrate the magnitude of these challenges. For instance, in Kenya, the loan default rate for student loans stands at 44%, highlighting the financial burden on students. Inequitable loan distribution is evident in countries like Nigeria, where only 5% of students have access to student loans due to limited options and high costs of education. Additionally, a study in Ghana revealed that 70% of respondents cited high interest rates as a major barrier to obtaining student loans. Addressing these challenges requires policy reforms, financial literacy programs, improved credit bureau coverage, and streamlined loan administration processes. Such efforts can enhance access to higher education and foster socio-economic development.
For South Asia, the literature review focuses specifically on emerging student financing mechanisms supported by state and non-state actors. The analysis is based on academic literature on student financing, particularly education loans, in South Asia, specifically the member countries of the South Asian Association for Regional Cooperation (SAARC). A systematic literature review approach has been followed for searching academic literature from select search engines using identified keywords, restriction criteria, and number of hits. In this way, a total of 539 papers were shortlisted and after the screening of the titles and abstracts, finally, 41 papers were selected for the review. Based on these 41 papers, this study examines the overall challenges faced by students and their guardians in accessing student loans as discussed in the literature. It also summarises the challenges faced by private financiers (such as commercial banks, credit unions, and private lending firms), other non-State and State actors in the context of South Asia.
We bring the two contexts together to explore similarities and differences in the problem domain. What are wicked, pervasive or known unknown challenges requiring both South-South international understanding of the challenges? Are there new knowable unknown challenges that either country has experienced and can teach another?

Authors

• Allan Kimaina, University of Cape Town

• Kamlesh Goyal, Tata Institute of Social Sciences