PNG’s Student Loans: Recurring Problems Since 2001

Student loans are not new to PNG, it was implemented as the Tertiary Education Student Assistance Scheme (TESAS) between 2001 and 2007. About 7, 000 students borrowed money from the state, but only ONE woman repaid her loan! The government went to the extent of listing more than 3, 000 names in the newspapers and appealed to the public to assist in identifying those who got loans, and their guarantors but none responded. In total, the government spent K6. 6 million ($2.5 million). Last year, the government budget was K230 million ($49.3 million). About 10, 000 students are said to have borrowed varying amounts, but it is not clear how much of the K230 million has been borrowed.

The big question is: has the government learnt the lessons of 2001 – 2007? Moses Sakai has written two excellent articles on the history of student loans in PNG, and the recurring defects in this new Higher Education Loan Program (see article 1 here and article 2 here). 

The recurring problems are as follows:

  1. In the TESAS era, there was no clear timeframe for loan repayment. Under HELP, there’s no clear timeframe on when the students repay their loans. It states that a graduate that starts working and earns K462 will have 10% of his/her salary automatically deducted (if less than K462 they don’t pay). This scenario assumes that the student has formal employment upon graduation. But how about those who are not employed? What happens if the graduate’s salary remains under the minimum threshold for years?
  1. If the graduate fails to repay the loans, the guarantors would repay the loan. Guarantors are either parents, siblings, wantoks etc., who agree to repay the loan if the student fails to repay in the future. There are countless uncertainties: what happens if the guarantors retires, resigns, is bankrupt, etc., and the graduate fails to repay? When guarantors were contacted after the cohorts of 2001 – 2007 failed to repay the TESAS loans, the guarantors refused to pay. What happens if that happens again?
  1. The graduate is required to notify DHERST and their employer that they have a student loan. Can self-accountability work?

There are other related issues that make the HELP contentious:

1. DHERST initially (2019/2020) stated that GPA is the primary requirement for those applying for loan. This is because graduates with high GPA have better employment opportunities, thus improves the chances of loan repayment. However, the government pushed an alternative narrative and succeeded: that students should not be discriminated against based on their GPA. Assuming DHERST was right, and weak students don’t get jobs after graduation, loan repayment will become an issue.

2. The logic that guarantors should repay the loan is interesting: The reason why students are going for HELP in the first place is because their wantoks cannot help them now. Requiring the same wantoks to repay if the graduates fail to repay is a silly logic.

3. There is a possibility that this may all be political and no loans will be repaid: Let’s look at government decisions on education since 2019. First Marape declared that he would eliminate free education from prep to secondary school level, and focus on providing assistance via HELP for higher education only. Outcry, especially on social media led to a change in position. Now it’s subsidized education. Second, he announced that HECAS & AES programs would be eliminated and replaced by HELP (students with high GPA quality for the AES whilst students below AES quality for HECAS – both are government scholarships). Due to public outcry, the government retained AES/HECAS alongside HELP in 2020. What happens if thousands refuse to repay the student loans? We might see more changing of goalposts.

4. The USA and Australia are some countries that PNG can learn from. Nobel Prize winning economist Joseph Stiligtz equates the student loans in the US to the housing bubble that led to the 2008 economic crisis. The access to finance and the promised benefits is enticing. But with a limited market for those graduating, it runs the risk of a bubble.

5. Predatory for-profit institutions. In both Australia and the US, many profit oriented institutions enter the higher education space because they want to make money off from student loans. These institutions provide low quality qualifications for profit, and students and the state struggle later: students struggle to find jobs with poor qualifications, and the state struggles to get back its money.

With about 20, 000 students excluded from the formal system in PNG every year, private institutions will pop-up everywhere to serve this segment. Students who cannot pay for their fees will go for the HELP funds,  but will the pop-up private institutions provide credible qualifications? 

Now that’s a critic of the government’s HELP program. For parents and students, HELP is something you should give some thought to. 

STUDENT LOANS, CHAINED CAREERS!

Student loan is a burden, and if not careful, it will be like a rock chained to your leg, that you have to drag up the ladder in the most productive stage of your life. Below are scenarios you ought to know before you and your parents decide whether to get these loans, and how much to get.

The student completes a four years bachelor degree and gets a job. The repayment is tied to your income (income based repayment): your first pay will have at least two deductions – normal taxes paid by anyone with a job,  as well as the automatic 10% deduction to repay your student loans if you earn K462 per fortnight. Below are how the US and Australian Governments structured student loan repayments:

A. A minimum income threshold is set so that graduates earning low incomes delay their repayments (below for PNG K462). However, because graduates with a university degree are most likely to start earning higher wages (than K462 for PNG) they will not be exempted from either taxes or repayments, from the very first pay.

B. Beyond the threshold, the graduate pays progressively higher rates. The higher your income, the higher the taxes and deductions for student loan repayments. This becomes a real impediment to the desire to work hard and climb up the ladder.

C. Future commercial loans for business etc.: One of the non-compromising conditions of the commercial banks is to ask whether the individual has outstanding loans. Any graduate with student loans will have to deal with this challenge (perhaps except for SME funds).

D. For the state: What if the graduates do not repay and debts start to accumulate? Student loans in the US alone is a staggering $1.7 trillion (K6 trillion plus in PNG currency).

Proposed solution for Government to consider

Instead of providing loans, improve the existing scholarships. The current scholarship has AES, which is for the very high achieving students, and HECAS for those below that. Introduce a third category to make it three:

  1. Full scholarship for students with very high GPA (the students within the current AES category should make up this category, but this time they pay nothing). It’s a reward system. The harder your work, the better the reward.
  1. AES – the AES category should be filled with students currently under HECAS.
  1. HECAS – the minimum GPA for HECAS should be reduced to accommodate more students. 

This system should not be limited to the National Government. Provincial and District MPs who use portions of  their DSIP & PSIP funds for school fees should also structure it this way. Reward is the key. It makes people work. You get to allocate resources to those that deserve it. 

Message to Parents and Wantoks

If you can pay, pay for your child. You have done it before. Or at least let your child get half loan, you pay half. Crowdfunding that works in the Highlands is a great system. Someone from your tribe goes to university, takes pride, contribute and pay his/her school fees. If there’s money for bride price and contribution for the dead, there should be money for the living child.

If you cannot afford higher education fees, get the loan and study very hard. Get a good job and repay the loans.

Two related articles on higher education published by Academia Nomad that you may want to look up are:

  1. Student Loans, Chained Careers: The Other Perspective (2020)
  1. Exclusive Club but low quality? Trends in PNG Higher Education (2021)

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May 2021 be the great year for you.

Not Selected? Here are Four Ways to Pursue Studies in PNG: Grade 8, 10 & 12 School Leavers, and even Adults.

Many students meet the requirement set by the universities, and even exceed them by large margins, but still miss out due to limited spaces. At the primary school level (grade 8), and high school level (grade 10) even higher number of students miss out because they do not meet the requirements of secondary schools. In 2019, we reached out to someone who has been assisting students to pursue studies through other pathways. Mrs Simiong conducts awareness called “EDUCATION PARTH WAYS FOR SCHOOL DROP OUTS” where she talks to young women on how they can advance their education. Her advice is helpful for students who may want to pursue their education….

By Mrs Lingewe Peiva Simiong

EDUCATION PARTH WAYS FOR SCHOOL DROP OUTS 

This article highlights three main ways that are currently available for school drop-outs to continue their education after being rejected from the mainstream. 

  1. FODE –Flexible Open Distance Education.  (Formerly called College of Distance Education-CODE).This system is directly attached to Provincial Education system but independently administered from Waigani. It has centres in all main towns across the country. FODE system provides syllabuses for Grades 6 to Grade 10 with the recent inclusion for Grades 11 and 12. 

FODE centre enrolments:

  1. Enrolment of any Grade six (6) drop outs from formal primary schools to do Grade seven (7) through FODE and continue onto grade ten (10) and obtain grade ten (10) certificate.
  • Enrolment of any grade eight (8) drop outs from formal primary schools to repeat grade eight (8)  and continue onto Grade nine (9) and ten (10) or do Grade nine (9) and continue onto Grade ten (10) and obtain grade ten (10) certificate. There is no age limitation for this partway.
  • Enrolment of any Grade ten (10) drop outs from formal secondary schools to repeat Grade ten (10) and obtain Grade ten (10) certificate with better results and seek space in formal secondary school systems, to do grade eleven (11).
  • With the inclusion of Grade eleven (11) and twelve (12) syllabuses recently, any Grade ten (10) drop outs can enrol to do Grade eleven (11) and twelve (12) and obtain a Grade twelve (12) certificate through FODE and apply for tertiary institutions in the country. Or those who have completed grade ten (10) through FODE can continue to do Grade eleven (11) and twelve (12).

Subjects Offered at FODE

  • Subjects offered at FODE for grades 7, 8, 9 and 10 includes: 
  • English,
  • Mathematics,
  • Science and 
  • Social Science. 
  • Major Subjects offered at FODE for grades 11 and 12 includes: 
  • English,
  • Advance Mathematics
  •  General Mathematics
  • Chemistry
  • Physics
  • Biology
  • Geography
  • History and  
  • Economics

How to enrol at FODE

Following steps will be required to complete the enrolment at ant FODE Centre. 

  1. Present relevant certificate (Grade 6, Grade 8, Grade 10, and Grade 12) to the nearest FODE Centre and request enrolment.
  2. Fill out application form and select numbers of subjects to be done.
  • Participate in the entry test on a scheduled date and issuance of entry test results.
  • Payment of the subject fees at the bank and presentation of the receipt 
  • Issuance of the subject materials, assignment and the schedules for completion of each of the subject.
  • Sit for subject examinations at the end of the year based on schedules issued by the FODE Office
  • Issuance of certificate and transcript based on the cumulative assessments 

For further information, check FODE website by clicking this link.For more information on entry test and other requirements, check this link.For more information on course offered see here, and to contact the respective provincial representatives check this link.

  • DODL UNITECH – “DODL(Department Of Open and Distance Learning) is an adult matriculation centre offered by the University of Technology. The DODL study centres are located in all major centres of Papua New Guinea including:
  1. Alotau Study Centre
  2. Arawa Study Centre
  3. Daru Study Centre 
  4. Goroka Study Centre
  5. Kavieng Study Centre 
  6. Kimbe Study Centre
  7. Kokopo study centre
  8. Kudiawa Study Centre
  9. Lae Study Centre study – Unitech
  10. Lorengau Study Centre
  11. Madang Study Centre
  12. Mendi Study Centre
  13. Mt Hagen study centre
  14. NDC Study Centre – Gerehu Secondary school
  15. Popondetta Study Centre
  16. Wabag Study Centre
  17. Wewak Study Centre

The adult matriculation for University of Technology (Unitech) is now open. You can visit their website to download the application forms by clicking here.

DODL Enrolments

  • DODL enrols Grade 10 school leavers to do Grade 11 and 12 certificates with transcripts. This is called adult matriculation studies.
  • DODL also enrols candidates who have completed Grade twelve (12) in the formal education system to upgrade and better their results before applying for tertiary studies.

Courses or Subjects offered at DODL for adult Matriculation studies (any Grade 10 drop outs with Grade 10 certificate)

Persons interested in doing Grade 11 through DODL can choose either science pathway or social science pathway.

Science pathway subjects for Grade 11                                

  • English 1
  • Mathematics 1
  • Physics 1
  • Chemistry 1
  • Biology 1

Science pathway subjects for Grade 12

  • English 2
  • Mathematics 2
  • Physics 2
  • Chemistry 2
  • Biology 2

Social Science pathway subjects for Grade 11                                

  • English 1
  • Mathematics 1
  • Geography 1
  • History 1
  • Economics 1

Social Science pathway subjects for Grade 12

  • English 2
  • Mathematics 2
  • Geography 2
  • History 2
  • Economics 2

Click this linkto learn more about the current adult and grade 12 matriculation program.

Courses or subjects offered at DODL for candidates seeking to upgrade their Grade 12 results 

Persons seeking enrolment to upgrade Grade 12 results are allowed choose either of the two pathways, the Science and the social science based on subject they studied in Grade 12.

How to Enrol at DODL

  1. Adult Matriculation studies
  1. Person interested in adult matriculation studies can present their Grade 10 certificate at the nearest DODL study centres and request for an application form. 
  • Issuance of the application form and a bank deposit form is issued. 
  • On the registration form, you can fill in your details and choose your pathway of studies, either science pathway or social science pathway.
  • You will then be advised to pay up the subject fees for each subject you have indicated to take.
  • There are two semesters each year so you can divide your subjects into the two semesters and complete grade 11 and then you can do the same with Grade 12.
  • When you complete grade 12 at DODL, you will then apply for a grade 12 certificate. Application form will be provided by the DODL study centre you enrolled in.
  • DODL study centre and PNG Unitech liaises with the Department of Education for the issuance of Grade 12 certificate for students who complete their studies at the centre. 
  • Certificate and transcript issued by the DODL study centre can be used in pursuing studies at the UoT as well as other institutions in the country. 
  • Grade 12 School leavers 
  1. Persons interested upgrading their Grade 12 results can present their Grade 12 certificate at any of the DODL centres.
  • An application or registration form will be given to be completed and submitted with the receipt of payment for the subject fee.
  • DODL Program is spread over two semesters therefore a student can have the freedom to enrol in semester 1 or semester 2 to upgrade one or two subjects. At least two subjects are offered per semester and therefore to upgrade two or more subject, a student must enrol for both semesters. 
  • Transcript with upgraded result is issued by the DODL study centre which can be used in pursuing studies at the UoT as well as other institutions in the country. 

Tutors (teachers) of DODL

  • DODL Unitech gives the responsibility to each of its study centres to recruit specialised secondary school teachers to be tutors of the respective subjects offered. These tutors teach two (2) hours of lessons per week, normally over the weekends (that is, Saturdays and Sundays). One semester runs for 15 weeks, 14 weeks of lesson and the last week is the exam week for the semester.

Assessment

  • During the course of the semester, students are required to do six (6) assignments for the subject they are enrolled for. The only exception is mathematics which is nine (9) assignments. These assignments are prepared by the tutors of the respective subject and makes up 30% of the assessment. At the end of the semester, students do an examination for each subject they are enrolled for, which makes up 70% of the assessment. All examinations are uniformly prepared by the DODL headquarters at Unitech and are delivered to each study centres to be administered.
  • The semester for students is over after the examinations are conducted. Examinations are marked and added onto the assignment marks and sent to Unitech for the final grade to be processed. 

For information on where DODL is offered, including centres and specific locations, click thislink.

  • UPNG OPEN COLLEGE (Formerly Open campus) 

UPNG Open Campusoffers opportunity to Grade 12 school leavers to enrol when their GPA is below the requirement set by the four schools and they are left out of the main selection process of the University of Papua New Guinea (UPNG). Four schools of UPNG are:

  1. School of Law
  2. School of Natural and Physical Science 
  3. School of Business Administration 
  4. School of Social Science and Art 

UPNG Open College Campuses in Papua New Guinea 

Open Campuses.

  1. NCD Open Campus
  2. Kokopo Open Campus
  3. Madang Open Campus
  4. Buka Open Campus
  5. Hagen Open Campus

Provincial University Centers.

  1. Enga University Centre
  2. Mendi University Centre
  3. Simbu University Centre
  4. Morobe University Centre
  5. Oro University Centre
  6. Milne Bay University Centre
  7. West New Britain University Centre
  8. Manus University Centre
  9. New Ireland University Centre
  10. Wewak University Centre

Franchise Sub Centers

  1. Help Resource Centre Wewak.
  2. Institute of Business Studies (IBS).
  3. CDI-Moro Foundation- Moro SHP

The contact for the main office for Open Campus can be found here.

How to apply for UPNG Open College  

Follow these six (6) steps 

  1. Get the Application Form for the University of Papua New Guinea.

You can get the Student Application form from the following places: At any of the Open Campuses and Provincial University Centres. All Centers location and contact details are listed on Step 5: Go for Registration below.If you have access to Internet, you can download the form in PDF format from the UPNG Website.

  • Choose your desired Program which is available through the UPNG Open College.

The Study Programs are offered by the University of Papua New Guinea Academic Schools. The Schools that have Programs on offer through Distance Learning are from the following Schools. The programs the school offers are listed under it. 

  • School of Business Administration (SBA). 
  • Diploma in Accounting 
  • Bachelors Degree in Accounting 
  • Bachelors Degree in Business Management 
  • Bachelors Degree in Public Policy Management 
  • School of Humanities & Social Sciences (SHSS). 
  • Bachelors Degree in Education. 
  • Bachelors Degree in Arts. 
  • School of Natural & Physical Sciences (SNPS).
  • Bachelors of Science (Foundation Year only and offered only at the 4 Open Campuses. NCD, Kokopo, Buka, Madang).
  • Launch your application Form. 

Once you have got the Application Form and chosen your program you can launch the Application. To launch the application; 

  1. Fill the Application Form with all the required information. 
  2. Make sure all the required attachments are intact, such as copies of certificates and etc. 
  3. Pay the Registration Fee of K20.00 into the UPNG Account indicated on the Form. 
  4. Attach the Registration to your filled Application. 
  5. Bring it to the Open Campuses or University Centre closest to you. Or you can post it.          direct to; 

The Executive Officer 

UPNG OPEN COLLEGE 

P.O.BOX 341 

University, NCD, Papua New Guinea. 

  • Confirm your acceptance.

The University of Papua New Guinea receives so many applications academic year and it publishes all the accepted Applicants in a list in the local newspapers as the official Acceptance List. The University may respond to individual students notifying them of the application outcome not to all. Acceptance listed published in the newspapers is often regarded as the official notification. The list is published mid-December for the following academic year and around June for 2nd Semester applicants.

  • Go for Registration at your desired UPNG Open Campuses or Provincial University Centres.

Accepted students can report to the Open Campuses and Provincial Universities of choice to register on the official registration week. The Registration Date and other related details are published with the Acceptance list. 

  • Contact appropriate people for assistance during your study.

Successful applicants must make it their responsibility to contact appropriate people and follow up on their own progress. 

  • TVET AND COMMUNITY COLLEGES Technical Vocational Education training and community colleges.

These refer to institutions like vocational schools and community colleges set up by the government and non-governmental organisations like churches.

The motive for these institutions is to train any Grade 6, Grade 8, grade 10 and Grade 12 school leavers in any trades and graduate them with trade certificates to better their lives by seeking employment or use these skills to do something for themselves.

Some examples of trade certificates to be obtained from these institutions are

  1. Trade certificate in motor mechanics
  2. Trade certificate in carpentry
  3. Trade certificates in brick laying
  4. Trade certificate in cookery
  5. Trade certificate in sewing
  6. Trade certificate in tourism and hospitality
  7. Trade certificate in panel beating
  8. Trade certificate in office management
  9. Trade certificate in plumbing

For more information about TVET, including the email addresses of each of the centres, check this link.

For Grade 12 students who missed out on selections to tertiary institutions in PNG, and adults who may want to pursue studies, University of Technology’s DODL and University of Papua New Guinea’s Open College may be the best option. For Grade 8 students who were not selected for Grade 9, and Grade 10 students who were not considered for Grade 11, the best option would be FODE. For anyone interested in technical education, TVET is the best choice. 

About the Guest Contributor: Lingewe Peiva Simiong

Lingewe Peiva Simiong holds a Bachelor of Education (B-Ed) from the University of Goroka (UoG) specialising in Science and Home Economics and a Diploma in Science (DSc) from the University of Technology (UoT) specialising in Biology. She has taught in a number of high school and secondary schools in the country including Sogeri National High School. She is currently teaching Biology at Port National High School. Apart from teaching in the classroom, Lingewe is a passionate advocator for female education. She maintains that education is the principal factor that determines liberation of women in PNG. She advices all young female Papua New Guineans who are out of the mainstream education system to pursue life through other education pathways created by the Government.

“The race is not to the swift or battle to the strong…. but time and chance happen to them all” Ecclesiastes 9:11 

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Limited Quotas In Tertiary Institution Fails Even the Qualified Students in PNG

Every year, about 20, 000 to 28, 000 students compete for 11, 000 spaces in tertiary institutions in Papua New Guinea (not counting non-school leavers or working class applying for undergraduate degree, and international – mostly other Pacific Islanders – applying to PNG institutions). Many students meet the requirement set by the universities, and even exceed them by large margins, but still miss out. To squeeze students into these limited spaces, the universities are raising the bar higher and higher, forcing out more and more qualified students as a result.

On Monday, I assisted a friend, who brought his nephew’s Grade 12 certificate and a screenshot of his choices. He scored an aggregate GPA (Grade Point Average) of 3.8 out of 4.0. His first choice was to study law at the University of Papua New Guinea’ Law School. His second choice was to study Political Science at the University of Papua New Guinea.

Minimum GPA for Law is 3.0, though one needs to score A or B for English (L&L) and Maths, and avoid getting a D grade for any of the subjects. Political Science entry requirement is even lower, at 2.75. With a GPA of 3.8, this kid was 0.8 points more than qualified to study Law, and 1. 3 points more than qualified to study politics (he was over qualified for both subjects).

He was not selected for either of his choices – Law & Politics, even though he exceeded the requirements. We first went to the law school and asked a senior law lecturer why he was not selected. His explanation was as follows:

The law school has quota or limit of 150 students in any given year. Of the 150 spaces, they must allocate a percentage to school leavers (those finishing Grade 12 the preceding year), a percentage to non-school leavers (those who have completed first degree either at UPNG or other tertiary institutions), and a percentage allocated to international students (usually other Pacific Islanders).

This year, they selected straight A students: that is, students with GPA of 4.0. Even after filling the quota with students with GPA of 4.0, there were still a large number of applicants with GPA of 4.0 who were left out. They were left out not because they were not qualified, but because the faculty does not have enough room to accommodate all the applicants who met the requirement to study law.

So how do they determine who gets selected and who misses out if both students qualify, or even qualify with exactly the same GPA, lets say 4.0.? First, remember the percentage allocated to school leavers, non-school leavers, and international students? Well, the applicants in each pool (percentage allocated to each group) compete among themselves. All school leavers compete for the school leavers sub-quota, which is about half (75 spaces). The non-school leavers and international students compete in their respective categories, which is the other 75 spaces divided among the two groups. Ideally, students with higher GPAs (4.0) gets selected ahead of my friend’s nephew (with a GPA of 3.8). Even then the guys with GPA of 4.0 cannot fit into their respective spaces because there are too many of them.

This is when the A(s) on your certificates are further grade into (A+) , (A) , and (A -) . There process is called Tertiary Selection Score. This method further classifies your grades into three sub-categories e.g. A minus (-A), A, and A plus (A+). If the norm referencing for English, or cut-off mark (set by the Measurement Services Unit) is that any grade above 70 marks is A, then the classifications would be as

follows:

-A: 70-80%

A: 81%-90

A+: 91%-100,

the three grades classified as ‘A’s are further are classified into sub- categories for selection purposes.

Okay, that explains why my friend’s nephew not getting into law, but why was he not selected for Political Science, his second choice? It is the same as the law problem. Politics, which has a quota of 30 (accepts 30 students every year), is way lower than Law quota of 150 (Politics is a discipline within Social Sciences and Humanities, whilst Law is a School of its own). Even though Politics has a minimum GPA requirement of 2.75, only students with straight A(s), GPA of 4.0 got selected because of limited spaces.

This UPNG case can be applied to all universities and tertiary institutions across the nation.

Because they use online selection, the students who do not get into tertiary institutions of their choice are automatically selected for course that they did not apply for, but have met the requirements. My friend’s nephew got selected to study a course at Divine Word University. He neither applied to study in DWU, let alone study the subject he is not selected to study. When students are selected for studies in other institutions or to study other subjects, they are usually selected ahead of students who actually applied to study the same course in that institution as their first choice. The former gets in because of higher GPA even though he did not apply for it. This means that students who have applied for that course, and have met the GPA miss out because their spaces are taken up by someone who did not apply for it at the first place.

Out hope now is to expand existing universities, and build new ones. There is always the debate about jobs. Where are the jobs when they graduate? Getting a job is not the goal, getting a net educated population is the goal. Having the highest per capita university graduate in the region should be our goal. With knowledge they can find their way in life.

This article was first published under the “Education” section of Academia_Nomad.

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Student Loans, Chained Careers : The Other Perspective

Imagine this: You’re a UPNG student accessing PNG-HELP FUND (aka student loan). To reside at UPNG’s Games Village (e.g) each student is required to pay approximately K12, 000 per year, unless you are on HECAS or AES, in which case you pay about half. Assuming they all graduate after four years, each student owes the state K48, 000 – without interest. High costs, generous offer from the government, looks real great. Does it?

Below are scenarios you ought to know before you and your parents decide whether to get these loans, and how much to get.

The student completes fours years bachelor degree and gets a job job. The repayment is tied to your income (income based repayment): your first pay will have at least two deductions, tax & automatic deduction to repay your student loans. The details are not yet released, but here is how US & Australian Governments structure repayments:

A. A minimum income threshold is set so that graduates earning low incomes delay their repayments. Just like low income earners are exempted from paying taxes, Graduates with low income (let’s say K600/fortnight) do not repay student loans. After exceeding threshold the graduates start repayments. 

B. Beyond the threshold, the graduate pays progressively higher rates. The higher your income, the more you pay. 

Sounds cool right? Not so fast. Research in both the US and Australia show that student loans do have negative implications. 

First, with a degree, the graduates will start earning higher wages, higher than the exemption threshold for student loan repayments. They will not be exempted from either taxes or repayments, from the very first pay. It will affect many decisions in life. Marriage, buying a car, starting a business, and just about anything that requires money.

All bachelor degrees cost the same at UPNG (apart from medicine) but not all degrees earn the same when you start working – it’s the same for most universities. There are those that earn higher because of the type of degree or the type of job/sector they are employed in. Graduates in high paying jobs will pay off their loans faster than the others.

Second, it gets tougher for those who may want to take loans to start a business, buy a car, buy a house etc. One of the non-compromising conditions of the commercial banks is whether the individual has outstanding loans. A graduate with K48, 000 debt has lower chances of successfully applying for loans from commercial banks. Any graduate with student loans will have to deal with this challenge.

Third, there is sometimes a disincentive for those in low paying incomes with exemptions to work hard and climb up the income ladder. They would want to delay the repayments as long as they could. Because the repayment is progressive, even those above the exemption mark would always be conscious that higher income equals higher taxes and higher repayment rates.

The state itself will have its share of problems with non-repayments. What if the graduates do not repay and debts start to accumulate? Student loans in the US alone is a staggering $1.4 trillion (+K4 trillion). 

The US and Australians solved this by further reducing the exemption threshold and increasing the repayment rates. This doesn’t help the graduates.

Also, what happens to graduates who don’t get into formal employment where a portion of the income can be automatically deducted? After 25 years US forgives the loans. Australians are less generous, they don’t forgive the debt. We don’t know how generous our government will be until the complete policy is published.

Noble Prize winning economist Joseph Stiligtz equates the student loans in the US to housing bubble that led to 2008 economic crisis. The access to finance and the promised benefits is enticing. But with limited market for those graduating, it runs the risk of a bubble.

In both Australia and US, access to student loans by students attending all institutions led to so many profit oriented institutions entering the higher education space. Institutions compete for students, who rely on loans to pay their tuitions, with loans they will struggle to repay later. These institutions provided qualifications for profit, produced low quality qualifications, and students and the state struggled later: students struggled to to find jobs, state struggled to get back its money.

What you can do about it:

1. Parents – if you can pay, pay for your child. You have done it before. Or at least let your child get half loan, you pay half.

2. Crowd funding – learn from the Highlands. Someone from your tribe goes to university, take pride, contribute and pay for it.

3. If you cannot afford higher education fees, get the loan and study very hard. Get a good job and repay the loans.

4. Encourage your provincial and district governments to contribute subsidies and scholarships at the tertiary level. This could could be accompanied by a deal to work in the province or district for a certain time, especially if your qualification can help the rural population. 

5. Very importantly, as a student, concentrate on your studies, get good GPAs to quality for HECAS & AES scholarships so the government can pay half of the fees, and you and your parents pay the other half, or get the student loan to pay the other half. Half burden is better than the whole amount. Hopefully TESAS is not scrapped off as is rumored.

Government: provide more grants and scholarships (less loans). High performing students compete for it. You actually produce high quality through such competition. The last thing we want is a tied K48, 000 burden on the legs of our young people.

Happy New Decade to you all.

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Conversation with Founding Fathers: Part One

Yesterday (01/11/2019) I had over 3 hours long conversation with the one of the advisors of the Constitutional Planning Committee who were the architects behind the Constitution of PNG. It was for a book I am working on, exploring the reasons behind the resilience of PNG democracy. To be clear, this guy, Ted (Edward) Wolfers is not, though I think he should be, called the Founding Fathers of the Nation, because he was engaged as consultant by the CPC… however as you read through you will realize that there is no denying the passion he had, and still when he talks about this nation. I will leave out the discussions we had that relates to the book, but there were interesting stories, and insights he shared that as a PNGean I never knew nor appreciated..

He arrived in PNG in 1967 as a researcher for a US foundation called Institute of Current World Affairs. He was to research and write about PNG culture, language, people etc., which was what the organization did in colonial countries. His quickly understood what others at the time didn’t: that PNG societies were very efficient, in their own traditional ways. He recounted how, for instance, PNG tribes had a differing but quite developed arithmetic system. When he went over to Canada & US, he presented at the universities on the arithmetic systems of PNG. The same applied to telling seasons, wind directions and negotiation (he travelled with Keremas on a canoe to Pom once back in the day).

He then went on to teach at what has become known as ADCOL (Pacific Leadership Princint). Back then, only 2 Papua New Guineans had cars – John Kaputin & Palaus Matane 😂. In the afternoons he would walk down the road with his 30-40 students, and white people would drive past with amusements. They would offer to pick him but not his students. He would of course refuse it. In those days clubs were segregated. Natives were not allowed into whites only clubs, so one day he followed his Chimbu friend to a natives club. All the angras and other natives were so surprised to see him they bought him beer. He walked away having had 14 bottles too many.

This race dynamics irritated him, and he wrote the seminal book “Race Relations & Colonial Rule In PNG.” It was criticized by the colonizers but guys like Ron Crocombe supported him. The newly established UPNG heard about it, requested for a copy and had external examiners evaluate it. It was considered good enough for a PhD. He was given PhD in Political Science. The first PhD from the University of Papua New Guinea. 

He then returned to Australia to teach at a university and one day got a call to come work with the Constitutional Planning Committee. 

He speaks with fondness of his role at CPC. The team travelled the breath & length of PNG. He said “France colonies’ constitutions were written in Parish, other English colonies’ constitutions were negotiated over the table, PNG constitution was written with the consent of the people.” I asked him questions like: did the people understand the questions you asked? He said “Yes.” They simplified the questions to a basic level and translated it for the people to understand. The people wanted Ombudsman Commission, the people wanted Provincial Governments, so is most of the provisions of the constitution (not all CPC recommendations were adopted though).

He told a story of one of their trips. He told Sir Mattaiba Yuwi (not sure I got the spelling of the first name correct) that they were now going to consult with the people about the role of Ombudsman Commission. Sir Yuwi replied: “why do we need another Bushman? I have a lot of them in my village!” He misunderstood Ombudsman for Bushman. From then on the CPC gave him the nickname Bushman. 😂.

I asked him questions about National Goals & Direction Principles. He said the idea came from a Catholic Priest, who told Momis that the Constitution should have Social Goals, not just institutions. But CPC didn’t know how to fit it into the Constitution. Then they looked at Indian Constitution, it had something called National Goals & Directive Principles. They renamed the Social Goals as National Goals & Directive Principles. He said NGDPs was not the idea of one particular man, so is every provision of the constitution. It was all a group thing.

He ended by saying…” ask yourself questions like ‘how do I explain why PNG is now one of the longest unbroken constitutional democracies of the post WWII countries in the world… so far you young academics have been asking ‘what is wrong with this… what is wrong with that etc.” He said he walked out of Hubert Murray on September 16, 1975, thinking “I may not return. Troubled whether PNG would survive.” He said we take it for granted. Many countries succumbed to chaos and dictatorship after independence.

When the first vote of no confidence was initiated in 1980, he was worried. Rightly so because it was during such times that dictators either established themselves, not willing to release power, or took over by force. He thinks Somare’s greatest achievement was accepting defeat in the VoNC. And the first to do so. This came as a surprise to me, as Somare is know for more ‘important’ achievements. But you have to understand it from the context of other post-independent colonies where leaders refused to relinquish power.

Towards the end I asked “why you?” I put it to him that he was first asked by the PNG government to assist because of a lack of expertise at the disposal of the government. It was my assumption. He paused and thought for a while, then in a low voice replied “No. It was because they trusted me. And I never took that trust for granted.”

He ended up marrying a Kerema beauty, and even bought bride price.

Note: hope you enjoyed reading. I need help to interview other founding figures… if you have connections with the other remaining CPC members, or to our Founding Fathers I would like to chat with them. I will keep the more substantive details for my project but share conversations like this on this page. 

And, if you haven’t liked this page yet, you should do it now! You read it to the people end, why log out without liking it? 😊

PC: Gabriel Cherokee . This photo was taken earlier this year, 2019.