Penalties on HELB loans waived

Education Cabinet Secretary Amina Mohammed has announced a 100% waiver on Higher Education Loans Board (HELB) penalties. She said the move will act as an incentive to all the past beneficiaries who owe the board over Ksh 8 billion.

 She said, however, the moratorium will only be applicable to those who will repay their loans in a lump sum between May 3 to end of June.

The CS has also directed that all universities to adopt HELB smart cards that will enable them easily monitor repayment of loans disbursed to students.

Speaking on Thursday during the launch of HELB employers portal, Mohammed said the smart card will accelerate the remittance process by removing the physical contact of university deans and students ledgers which causes delays. The portal will be used to upload employees’ payments information online.

“The Smart Card, which is already in use at Kenya Methodist University, Maasai Mara and Pwani Universities, will give students the responsibility to pay fees from the Tuition e-Wallet which is locked by a special system for that purpose”, she said.

Mohammed said the process will be supervised by the Principal Secretary who will in turn issue a report at the beginning of the next funding cycle commencing in September this year.

The CS also encouraged the Technical and Vocational Education Technical Institutions to follow suit as the government is in the process of facilitating a stipend allowance akin to that given to university students.

Mohammed, however, said that despite the tremendous efforts by HELB, out of the 396,680 loan accounts that have matured, 81,994 worth Ksh 8.2 billion are in default.

This, she added, is a key concern for the government as it inhibits HELB’s ability to fund the growing number of new students joining higher education institutions.

“Collaborative efforts between HELB and other partners towards recovery of these loans are most welcome and I am requesting all employers to ensure that university graduates in their employ are made to repay these loans as not afavor but as a primary requirement”, she said.

The CS appealed to past beneficiaries to help educate other young Kenyans by repaying their loans. The Government, she said, was considering converting HELB to a Tertiary Education Funding Corporation.

Mohammed urged the board to advise the ministry on any other alternative of broadening, rationalising and deepening financing of higher education in a more sustainable manner.

The CS said the online Employers portal that is designed to make it easier for employers to check on their staff HELB loan repayment status and remit their staff loan repayment from the comfort of their offices is one of a kind, creative and innovative idea that will ensure increased loan recoveries

She, at the same time, said her office has received complaints from students on delays in tuition remittances to universities, saying this interferes with their ability to register for semester courses causing unnecessary breaks.

“One of my key priorities in this docket is to ensure that all University courses take the required period of time to complete. We must bring to an end the era of perpetual studentship”, she said

HELB Chief Executive Officer Charles Ringera said so far the university scheme loan has supported over 645,000 Kenyans to pursue high education at a total of Sh 72 billion.

In 2016/2017 alone, the Board recovered Ksh 4.1 billion which accounted for 40% of Ksh 10.2 billion for the year.

He explained that the government has this year released Ksh 7.6 billion for HELB, other partners have given Ksh 200 million while they have recovered loan of Ksh 4.5 billion and this total of Ksh 13.2 billion will used in disbursing to others this year.

HELB draws its funding from the government’s exchequer as well as loan repayments from past beneficiaries as a National Revolving Fund. However, they have maintained that repayments are not enough to fully fund higher education forcing them to seek funds from external sources.

According to the HELB chairman Ndegwa Wachira , the last 5 years has seen exchequer support rise from Ksh 3.3 billion to Ksh 7.6 billion. Recovery of loans has also risen from 2.5 to 4.5 billion.