Shock of 82,000 Kenyans holding Sh8.2 billion varsity loans

The Government has waived penalties for 82,000 Kenyans who have defaulted in repaying Sh8.2 billion in higher education loans.

But they have one month to settle the payments with the Higher Education Education Loans Board (Helb).

Education Cabinet Secretary Amina Mohamed said the defaulters must pay all the money they owed Helb in lump sum.

Speaking yesterday during a Helb engagement forum with employers, Amina said she was shocked at the huge debt owed to the fund.

“I direct that all defaulters make payments between May 5 and June 30. We are giving a 100 per cent penalty waiver,” said the CS.

She asked employers to deduct and remit the Helb dues of defaulting staff.

“I call upon all employers to ensure they do not have staff in their payroll who have not completed the payments.”

Helb introduced an online platform designed to make it easier for employers to check their workers’ Helb loan status.

Amina also urged graduates who had benefited from the loans to repay.

Good practice

“It is just good practice to pay loans. All graduates should pay loans, not as a favour but as a primary requirement.”

Reports indicate that 396,680 loan accounts worth Sh47.5 billion had matured for payment. Of these, 81,994 accounts worth Sh8.2 billion were not paying any money to Helb.

Helb Chief Executive Officer Charles Ringera said that since 1974, the university loan scheme had supported more than 645,000 Kenyans to pursue higher education at a total cost of Sh72 billion.

Ringera said that loans worth Sh24.5 billion for 264,000 people had not yet matured. “Of the 396,680 loan accounts, a total of 175,003 loanees have completed their loan repayments valued at Sh16.7 billion.”

Helb draws its funding from the exchequer as well as loan repayments from past beneficiaries.

Amina announced that initiatives by Helb, various corporates, foundations, trusts, NGOs, and counties had raised over Sh800 million and supported more than 20,000 students.

The Education minister also instructed all universities to adopt the Helb smartcard system, saying it would allow timely loan disbursement to students.

The smartcard is already in use at the Kenya Methodist, Maasai Mara, and Pwani universities.

“This will give students the responsibility to pay fees from the tuition e-wallet, which is locked by a special system for that purpose,” said Amina. She instructed the Education PS to supervise the adoption process.

Increase capitation

It would also be easy to track students’ completion rates. Some students overstayed in institutions.

“One of my key priorities is to ensure that all university courses take the required period of time to complete. We must end the era of perpetual studentship,” said Amina.

She noted that as the Government continued to increase capitation from the exchequer, Helb must review its capacity and capability to finance the increasing number of students.

Ringera said that in 2016/2017, Helb recovered Sh4.1 billion, representing 40 per cent of the students’ financing budget, which stands at Sh10.2 billion.

Amina said the debt was a major concern because it stifled Helb’s ability to fund the growing number of new beneficiaries.

“Collaborative efforts between Helb and other partners towards recovery of these loans are, therefore, most welcome,” she said.

The minister suggested the possibility of converting Helb into a tertiary education funding corporation.