Student loanees to get reprieve in proposed Bill

By Wilfred Ayaga

Nairobi, Kenya: University loan defaulters could soon get a reprieve if the National Assembly approves a Bill seeking to suspend repayment of university loans until the loanee secures a source of income.

The Higher Education Loans Board Amendment Bill 2014 further seeks to bar the Higher Education Loans Board (Helb) from levying any interest on a loan until such a time that the person is able to service it.

According to the Bill, students who have completed university education will have the opportunity to notify Helb if they have been able to secure employment within one year of completing their studies.

“Where within one year a loanee has not secured a source of income, the loanee shall notify the board in writing and the board shall suspend repayment of the loan until the loanee secures a source of income,” the Bill reads in part.

Currently, Helb is pursuing thousands of loan defaulters, most of whom are out of employment.

The Bill, if eventually adopted by the House will also give student leaders in various public universities the opportunity to participate in decisions touching on student loans.

Government-sponsored students and those in private universities will have representation on the loans board.

“The board shall comprise three student representatives, two of whom shall be Government-sponsored elected as chairpersons of the students’ associations in their respective public universities, and one of who shall be the chairperson of a private university students’ association,” the Bill adds.

Penalties set out

Currently, the mandate of approving student loans lies with senior officials of Helb, with students, who are the beneficiaries of the loans having no avenue to interrogate the criteria used in the allocation.

One of the radical proposals in the Bill is a provision that will allow minors to apply for loans through their parents and guardians.

The law presently does not have a provision allowing people below 18 years of age, or those without national identity cards to access Government education loans.

According to the sponsor of the Bill, Irungu Kangata (MP Kiharu), the Bill will set out the criteria, which will among other issues take into consideration the performance of students applying for the loans.

But, the Bill also sets out penalties for those who fail to service their loans upon securing a source of income.