HELB Opposes Bid to Protect Jobless Graduates from Hefty Fines

The Higher Education Loans Board (HELB) has opposed proposed amendments to the Helb act seeking to shield jobless graduates from paying hefty fines for non-repayment.

The proposal by Igembe South MP Paul Mwirigi would see beneficiaries of the student loans protected from paying fines until they secure employment. At present, beneficiaries are required to start paying the loans one year after graduation.

Those who default face monthly penalties of up to Ksh5,000 – pushing many young Kenyans deeper into debt and leading to their blacklisting with Credit Reference Bureaus (CRBs).

Helb Chief Executive Charles Ringera rejected the proposal arguing that it would make it difficult for the body to go after those in self-employment.

He told Parliament that Helb lacked a mechanism of determining the employment status of its beneficiaries.

“The proposed amendment is objectionable as it will no doubt weaken Helb’s loan recovery mechanisms,” he stated.

Helb further claimed that, if the changes were adopted, beneficiaries would no longer feel pressured to complete their studies and enter employment to begin servicing their loans.

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Mwirigi has highlighted the high youth unemployment rate in Kenya in pushing for the changes, noting that only a small percentage of beneficiaries secure jobs within a year of graduation.

Being blacklisted on CRBs denies them access to further credit – limiting opportunities for entrepreneurship and investment among many young graduates.

The MP insists that the rule making it necessary to start paying within a year of graduation causes more harm than good.

Helb has long faced criticism over its attempts to ramp up repayments including from unemployed graduates – including a plan to list defaulters publicly in a bid to shame them.

A section of experts have previously argued that Helb should prioritize the creation of a system to track its beneficiaries employment status and allow for flexible repayment.

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