Number of students who have defaulted HELB loans
More than 109,000 former university students defaulted on their Higher Education Loans Board (HELB) loans in the wake of COVID-19.
This has been anchored on the slow pace of economic recovery with the continued layoffs and some businesses that had shut doors failing to recover.
In 2020, HELB announced a crackdown on loan defaulters in conjunction with the authorities as it had been estimated that they owned the board Ksh.50 billion.
In a new measure to woo borrowers to start repaying loans, the financier this year rolled out a campaign dubbed kamilishamalipoyahelb, which intends to provide HELB beneficiaries 100 percent penalty waiver.
HELB stated that the decision to start the campaign was prompted by the post-COVID-19 effects which took a toll on the economy
“HELB appreciates the fact owing to the prevailing economic situation, the loan beneficiaries’ repayment ability may take some time to stabilize,” said HELB Chief Executive Charles Ringera.
This was after the financer announced that more than 75000 students had not received any financial aid and HELB over the National Treasury’s failure to disburse Ksh.3 billion.
Other than the delayed release of funds, the board cited defaulted payment as one of the contributing factors to varsity students missing out on loans.
This even as HELB has already secured Ksh.1.5 billion from external sources to fill the funding gaps amid rising defaults.
“Partnerships with corporates, development partners, counties, trusts and foundations, individuals as well as ministries, departments and Agencies (MDAs) has raised Sh1.55 billion that has gone to supporting over 35,000 students,” said Ringera.
The Ksh.1.5 billion will be an addition to what the HELB had begun rolling out after it bowed to pressure in February to start releasing funds to students.
The funds are being released in batches for students who had applied for the loan.
“Tangazo! Tangazo! Tangazo! The following tuition batches have been disbursed to your institutions, 003823, 003819, 003874, 003851,003857 and 003875,” said HELB in a tweet.
The stalemate had put at risk more than 75,000 new university students who could have failed to join college after they applied for funds in September last year.
“Right now, we have 75,000 first-year students that are yet to be funded and we require Ksh.3 billion to process their applications,” said Wachira when she appeared before the National Assembly Committee on Education during the review of the national budget.
She added that the funding is insufficient and that a good number of students would miss out on the state loan.
“We need about Ksh.3 billion just to allocate them the minimum amount, the amount is too low compared to the Ksh.200,000 required by the students per year,” added the finance officer.
Embakasi East Member of Parliament Babu Owino had threatened the board that he would mobilize the students to demonstrate if the funds were not released with a seven-day ultimatum.