HELB Alarm: Over 300,000 Kenyan Graduates Fail to Repay Loans

More than 300,000 graduates who received government financing for their university education have yet to start repaying their loans, according to the Higher Education Loans Board (HELB).

In a televised interview on a local television on Tuesday evening, HELB Chief Executive Officer Geoffrey Monari reported a default rate of 35%, equating to 316,000 graduates who have not initiated loan repayments since completing their studies.

“Currently, HELB has supported 1.7 million Kenyans, of whom approximately 1 million have completed their studies. Out of these, 400,000 are repaying their loans, 300,000 have not started, and 200,000 have completed their studies,” said Mr Monari.

Monari noted that the institution is actively tracking graduates who have not fulfilled their repayment obligations, emphasizing that, “If you don’t repay a HELB loan, a penalty will be charged to your account.” However, he clarified that imposing penalties is not the government’s primary focus: “We don’t want to reach that point,” he added, urging those on the default list to start making repayments.

The HELB CEO also confirmed that funding for the programme is currently insufficient, especially in light of the growing number of Kenyans seeking financial support for higher education. He announced plans to petition Parliament for increased funding.

“For the next financial year, our budget is Ksh34 billion. We will be seeking additional funds, as this may not be sufficient due to the increasing number of students each year. I believe the funds will be made available,” Monari stated.

Additionally, Monari cautioned Kenyans to be diligent when providing information on their loan applications. He explained that many students express concerns about the amount of financing they qualify for, which often results from inaccuracies in the data they submit.

The institution is currently using a Means Testing Instrument that relies on the accuracy of the information provided by students. “If the correct data isn’t supplied, it will not yield accurate results,” he explained.

“Most of the time, due to various challenges, students submit their application forms to cyber café attendants who apply on their behalf. Unfortunately, since they are not present, incorrect information is frequently submitted, leading to dissatisfaction when the results are released. We are now giving them a chance to review their data,” Monari stated.

“We endeavour to ensure that we obtain the correct data so that we can place each student where they deserve to be,” the CEO emphasized.

According to Monari, higher education funding is also contingent on the chosen programme and the placement a student receives.

“We now provide funding based on your level of need. If you are a medical student placed in Band One, you will receive a 70% scholarship, a 25% loan, and 5% to be paid by your household,” he said.

“If you are not as needy, you may be placed in Band Five, where you will be eligible for a scholarship of 30%, a 30% loan, and the household is expected to provide 40% of the required funding for a programme like Medicine.” Monari explained.

To ensure all students are accommodated, Monari also confirmed that HELB offers the opportunity to appeal funding decisions if there are issues. He stated, “The Board has reopened the appeals portal for students who are dissatisfied with their categorization to have the chance to appeal.”

The CEO further praised the current placement criteria, noting that separating placement from funding was a commendable decision, given that not all students are placed.

“Previously, funding was automatically granted when a student was placed by the government. However, after the Presidential Working Party’s tour of the country, the feedback they received was that there are students who don’t require that funding; therefore, we had to align our process with the wishes of Kenyans,” said the HELB boss