Rethinking Dispute Resolution Mechanisms for Unremitted Student Loan Deductions by Employers in Tanzania: A Case for Alternative Dispute Resolution

Abstract

The Higher Education Students' Loans Board (HESLB) relies on employers to deduct loan repayment instalments from beneficiaries' salaries and remit them to the Board, yet a persistent share of deducted amounts is never remitted, generating a distinct category of dispute between HESLB and defaulting employers. This article examines the legal framework governing recovery of those sums; identifies the challenges of using litigation, as opposed to Alternative Dispute Resolution (ADR), to resolve these disputes, and makes the case for ADR as the more effective enforcement pathway. The article finds that the Higher Education Students' Loans Board Act relies on summary suit, ordinary civil proceedings and criminal prosecution. The Act is ambiguous about the procedure available against employers; treats all employer default alike and allows no waiver of the statutory charge; and contains no pre-litigation ADR procedure. Litigation is found to strain the continuing relationship between HESLB and employers; to leave the causes of default or non-compliance unaddressed, to be procedurally and evidentially more demanding, slow and costly. Moreover, in its criminal form, litigation may punish without ensuring recovery, and this result undermines the revolving fund on which future lending depends. By contrast, negotiation, mediation and arbitration are found to offer a more compliance-generating, relationship-preserving and cost-effective pathway, for which the Civil Procedure Code already supplies an underused foundation. The article recommends amending the Act to authorise a pre-litigation ADR procedure, supported by regulations and a Dispute Resolution Unit within HESLB, with litigation reserved for deliberate default. The case made is one of sequence and differentiation, in which ADR is the first response to the disputes it can resolve and litigation is kept for those it cannot.