Loan –It has emerged that over 75,000 freshmen in Universities are yet to receive their student loans from the Higher Education Loans Board (Helb).
Reports show that the loaning organization failed to remit the funds applied for after it ran out of cash meant to support students who had joined in September.
Those affected have been put on hold until the Treasury releases another sh 3 billion to be disbursed to those who had tendered their requests.
“Right now we have 75,000 first-year students that are yet to be funded and we require Sh. 3 billion to process their applications,” Helb Chief Finance Officer Mary Wachira told the National Assembly Committee on Education.
Data from the State loaning body indicates that it loans between sh 35,000 and 60,000 to each student every year.
Essentially, sh 8,000 is usually sent directly to the university as tuition fees and the balance to the beneficiary’s bank account in two equal tranches covering the first and second semesters.
Helb has oflate been defending that their struggle to finance students was being informed by high rate of defaulters where those who complete school do not bother to repay the loans. For instance, in 2020, over 100,000 borrowers defaulted on their Helb loans.
Loan defaulters therefore have weakened the Helb’s ability to continue supporting university and technical college students, prompting subsequent allocation cuts and requests for sh 8.6 billion additional funding from the Treasury; what economists say is not healthy for any nation.
They argue that what this means is that loans are being given to learners who eventually don’t get a job after school hence the high level of defaulters; what creates the un-sustainability.
