PNG’s tertiary loan programs: present and past

Prime Minister Marape addresses graduates at the Pacific Adventist University, December 2019 (Credit: PMNEC)
Prime Minister James Marape address at the Pacific Adventist University’s 35th graduation ceremony (Credit: PMNEC)

The government of Papua New Guinea (PNG) through National Executive Council (NEC) decision NG179/2019 on 17 December 2019 formally established the Higher Education Loan Program, also known as HELP. The tertiary students loan scheme came with initial funding of K200 million (US$49.3 million).

The decision, in fact, was one of the priorities of the Marape–Steven government as detailed in the Marape Manifesto launched on the eve of PNG’s 44th Independence Day on 16  September 2019. In his manifesto, the eighth Prime Minister of Papua New Guinea, the Hon James Marape, clearly stated that his government would provide a lifetime interest-free loan to tertiary students commencing in 2020. The Prime Minister also made it clear that his government intentionally introduced the policy not just to invest in human capital development but to remove financial burden from the parents. In his address to students and parents at the Pacific Adventist University’s 35th graduation ceremony on 1 December 2019, the Prime Minister said: “No more will you pay tertiary education school fees. As long as you have NID (National Identification Card) and a residency as a Papua New Guinean, you will get money for your school fees.”

The policy itself is not new in PNG. A similar scheme was introduced two decades ago but did not work well. This blog post looks at the lessons we can learn from that earlier experience.

In 1999, Sir Mekere Morauta’s government abolished the National Scholarship Scheme (NATSCHOL) and introduced the Tertiary Education Students Assistance Scheme (TESAS) as a loan program administered by the then Office of Higher Education (OHE) (now the Department of Higher Education, Research, Science and Technology or DHERST). The loan program was introduced to help rural and urban families who cannot afford to pay for their children’s tertiary education and to improve the extent and the quality of higher education in the country. It was announced by then Minister for Education Muki Taranupi on 18 February 1999 when addressing the Divine Word University’s 17th graduation ceremony in Madang.

The TESAS loan program came into effect in 2000. Students who performed well academically but couldn’t afford their studies were told to obtain loans between 100 kina and 2,000 kina as per the terms of the loan program. From 2000 to 2007, a total of K6.6 million (US$2.5 million) was given out by OHE as loans to more than 7,000 students. However, the loan program was suspended from 2007 to 2009 due to lack of repayments by students who had already graduated and were working in public and private organisations. In an attempt to recoup the outstanding loans from the beneficiaries, the OHE started contacting them to find out where they were working. The OHE listed the names of 3,947 recipients in newspaper advertisements while appealing to the public for information about their whereabouts.

However, from the 7,000 plus students who obtained the loans and 3,947 beneficiaries listed in the newspaper, only one beneficiary, a woman, repaid her loan in 2004. In 2009, after five years of implementation, the director-general of OHE, Dr William Tagis, said that the problem was a lack of coordination with and action from the Internal Revenue Commission.

There may be two reasons why the TESAS loan program failed. First, students protested the abolition of the National Scholarship Scheme, and perhaps, as in other countries, the government wanted to silence the students by not enforcing repayment. A review of the introduction of student loan systems around the world by Maureen Woodhall points to the problems often caused by their politically controversial nature.

Second, in PNG, income tax payment is an employer responsibility. Individuals do not fill in annual tax returns. There is little or no incentive for employers to check up on the loan-repayment status of their employees.

Marape’s new loan program risks suffering the same fate. TESAS is now a grant. An earlier press statement released by DHERST stated that TESAS awards will cease and HELP will be the only available source of funding beginning in the 2020 second semester. The Secretary of DHERST, Professor Fr Jan Czuba, said this was a direct instruction from Prime Minister Marape and DHERST Minister, the Hon Nick Kuman.

However, a subsequent press release from DHERST has said that the two facilities will coexist. According to this statement, HELP is a non-compulsory facility set up to assist those unfortunate students who couldn’t afford their studies. Those students who perform well academically will continue to receive government payments under TESAS.

The confusion to date does not augur well for PNG’s second attempt to introduce a tertiary student loan scheme. Already students are referring to HELP as a “financial disaster”. For this second attempt to work better than the first, clarity, preparation and coordination among government implementing agencies will be key.

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Moses Sakai

Moses Sakai is a Research Fellow at the Papua New Guinea National Research Institute. He taught at the University of Papua New Guinea from 2018-2023.


  • I would continue to get diploma for accounting at ITI in Kimbe so I want Loan to complete my diploma program.

  • Many if us who brought up from the poor families and from very remote places in the country appreciated for help program…
    Please tingim mipla ol grass root tu..mipla laikim education..

  • Thanks Moses for this excellent overview and analysis. As Dr. Watson points out the real challenge for universities is to produce graduates with competences commensurate with international standards (the only standards), and can find fitting employment.

    How to transform PNG universities? The first step is to assure student selection is meritocratic and not driven by political patronage or bribing. At UNITECH we therefore made independent ACER aptitude test compulsory, review the selection process and strictly adhered to it. In this contect, the recent message from Minister Kuman DHERST “Don’t turn students away” is ominous. Translated it means: don’t turn students away who were recommended by me or my friends in government.

    Secondly, assuring access for the talented. The current system needs a reboot, because the governors chipping in with the best intentions, however, create a lot of inequity and chaos. In my view, in a developing country full scholarships should be given. The state’s investment is earned back many times over by a graduate paying income taxes. A non-graduate in PNG is highly likely to end up in the informal sector and never pay income tax. TESAS and HELP are schemes for industrialized countries, with no justification or useful application in the PNG context.

    Finally, universities must demonstrably work on the broader academic quality agenda – which is official government policy – and assure teaching is effective. Otherwise even the best selection and access policies are fruitless. At UNITECH, we revised the criteria for academic appointments and promotions, which have to be meritocratic. We engaged in a professional accreditation process and created a certificate program on student-centered teaching. We also engaged with industry to assure some equipment in teaching laboratories was actually working. We received no Australian aid at all for these efforts, with all support going to UPNG who, to say the least, had not been trail blazing in terms of the quality agenda or university reform.

    In 2012 with new LNG revenue to be invested in health and education, and new leadership at UNITECH after the Sevua Inquiry, there was one chance to achieve this transformation. Today, UNITECH management, however, is undoing most of this. We are back at non-functional teaching laboratories, no internet, no reliable power supply, and teaching programming with programmable calculators from the 1970s.

    The current UNITECH Council and management just found it too hard to stay the course and do the right thing. Universities reform postponed for another decade at least, until the current crop of university administrators and board members has withered away in total ineffectiveness and futility.

    • Thank you Albert Schram for your insightful comments concerning this blog.

      Firstly, the main objective of all higher learning institutions is obviously to produce quality and competent graduates based on international standards so that they could meet the demands of the workforce thus it wouldn’t be a challenge in PNG if the university council and its management step up in their performance to address the challenge seriously.

      Secondly, speaking of quality through meritocratic measures, you mentioned Unitech having its internal vetting system when it comes to selection through independent ACER aptitude test which is a great idea and should be perhaps adopted by other universities because universities can’t just rely on selection recommendations made by the DHERST. The same concept should also be applied to those students who are eligible for loans but have left their studies for few or some years due to lack of funds. It’s not good enough to provide the loans to students who are eligible to obtain the loan without testing whether they are eligible to continue their studies or not. But as you said, TESAS and HELP are applicable in developed countries and PNG as a developing country should prioritize full scholarship instead.

      Finally, I think to ensure quality in teaching and learning and to improve internal structure of the universities in terms of having the proper facilities and to establish partnership to receive foreign aid lies entirely with the respective university council and its administration. The prosperity of a university is as effective and good as its administration and the council members.

      Once again, thank you for your comments.

  • Good blog Moses. Few points related to the blog:

    1. Several times the government & DHREST said that to qualify for HELP, students need high GPA. High GPA is also required for TESAS. Because both schemes require high GPA, both HELP & TESAS benefits students with high GPA, not necessarily poor students. It’s a “he who has more, more will be given, and he who has less, even what he has will be take away from him” scheme.

    The requirements for high GPA, especially for HELP, is so that students can easily get employed and repay their loans. That’s according to secretary for DHREST.

    2. The government said if students fail to repay their loans two years after graduation, their guarantees will repay. So the students willing to access loans first need to find a ‘wantok’ willing to repay the loan on their behalf if the student fails to find a job two years after graduation. How many wantoks would be willing to do that?

    Graduates who earn below a certain threshold (e.g. K600 per fortnight) will be exempted from repaying their loans until they exceed the threshold. Will the their wantoks pay for the loans whilst awaiting the graduate to exceed the threshold?

    The idea of guarantees 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. Marape is developing a habit of changing the goalposts. First he declared scrapping away free education from prep to secondary school level. Outcry, especially on social media led to a change in position. Now it’s subsidized education. Second, he announced that TESAS would be eliminated and replaced with HELP. Again, public outcry led to maintaining TESAS. We might see more changing of goalposts.

    I wrote a piece on HELP titled “Student loans, Chained Careers: The other perspective” for a blog. It was republished by the National Newspaper last Friday:

    • Thank you Michael for your thoughtful comments.

      1. The issue of whether to consider high GPA for HELP is still questionable between DHERST and the government. As you said, DHERST wants to consider GPA and I mean high GPA as one of the requirements for HELP but on the other hand as per DHERST’s second media release, GPA is NOT a prerequisite for HELP which was a direct statement from the government. The issue is still debatable between government and DHERST based on the fact that the government is trying to address the issue of quantity while DHERST is trying to address the issue of quality especially in terms of the outcome of the HELP scheme.
      2. ‘Guarantee’ was one of the terms of the TESAS loan program back in 2000 to 2007 but it did not work out the way it was intended. ‘Wantok’ as you said could mean loan recipient’s parents, a guardian or any groups that the loan recipient is affiliated with and for them to willingly accept the terms to repay the loan in the event that the recipient did not find a job two years after graduation is something that needs to be considered between the loan recipient and the wantok. Back in 2007, those wantoks when approached by OHE refused to repay the loans as reported in one of the sources that I provided in the blog. Therefore you are right, requiring a wantok for loan repayment is illogical and totally impractical even for a graduate who is earning below certain threshold of K600 per fortnight.
      3. Your third point is quite interesting though because PM Marape was the only one being active on media trying to clarify the confusion among students and parents between TESAS and HELP in terms of whether HELP would replace TESAS. The first media statement released by DHERST was very clear that TESAS would ‘cease for good’ in the second semester and HELP would continue from there, which was a direct instruction from the PM and DHERST minister which came out on both online and offline medias, but the second press release was that both would coexist and HELP will start in first semester instead. Apparently, to date we don’t even know whether TESAS would cease for good this year but as you said, let’s see if the goalpost is going to change in the coming weeks and months as the HELP is rolled out.
      Thanks again for your comments.

  • I am sorry to learn that the new scheme seems unlikely to succeed. This is unfortunate because PNG really does need to have very good university graduates. The country would benefit from providing higher education to talented individuals who are from remote areas and families with an inability to pay fees.

    • Thank you Dr Watson for your comment.

      For this scheme to succeed or not is entirely dependant on how it would be implemented starting this year either in the first or second semester. What’s really important though, as you pointed out, is to have very good university graduates (which Albert Schram mentioned in the first line of his comment) who are trained at international standards. But the loan scheme, if you read the second media statement released by DHERST, is purposely to address the issue of quantity and not quality. GPA is not even a requirement for HELP and to invest K200m in such a non-compulsory loan scheme with an expectation of producing quality to meet demanding workforce is not a good idea of investing in human capital, especially in a developing country. So probably the government needs to reconsider the terms before rolling out the HELP scheme.

      Thank you.

  • Thanks for this blog Moses. PNG may learn much from the Fijian experience. A Tertiary Education Loan Scheme (TELS), in addition to a scholarship for high-achievers pursuing studies towards qualifications in demand, has been in place in Fiji since 1977. Repayments are made through the tax system, and loan-recovery has been good. A lesson from the above is that graduates have to be employed to be in a position to repay their loans, and the tax system must deliver. Consequently, the onus is on the lender (i.e. the Government) to do the necessary homework before extending the loan (i.e. HELP).

    • Hi Satish, thanks for your comment.

      As I stated in the blog, this is the second time the government of PNG has introduced a tertiary loan program and the implementing government agencies are working so hard to ensure that the repayment process is set right. In doing so, individuals who are interested to obtain funds through HELP are being asked to register for NID (National Identification Card) because as soon as they are being given NID, they would also get what is called a Tax Identification Number (TIN) to ensure future repayment of the loan as soon as they are being employed after graduation.

      At this point, we just have to see how this is going to work but I do really appreciate your points in terms of PNG learning from her neighboring countries like Australia, NZ and Fiji on how they’ve been implementing their higher education loan schemes before implementing the HELP scheme.

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