The loans are expected to be recovered from the graduated students, and subsequently deposited in the bursaries revolving funds account to assist other vulnerable students.
The unrecovered money was paid to 4,088 students from the two public universities.
The report further states that the non-recovery of students’ loans has been outstanding since 2004.
This came to light when Ministry of Education, Science, Vocational Training and Early Education permanent secretary Patrick Nkanza appeared before the Public Accounts Committee during the week.
“It is, however, regrettable that recoveries had not been effected as of August 2014,” Dr Nkanza said.
He said that the ministry is in the process of migrating from the old system, which had no properly defined modalities of recovering the loans.
Dr Nkanza said that the new system will ensure loans paid out to various students are adequately tracked and fully recovered.
“Structures and the loan recovery system will be developed once the loans board is put in place,” he said.
Meanwhile, the Auditor General’s report has also revealed that about K19 million paid as allowances to students abroad has not been acquitted.
The money was paid to 1,108 students abroad through Zambian embassies.
The report revealed that no acquittal sheets were availed for audit to verify whether they were received by intended beneficiaries.