75,000 University Students Miss Out on Loans as HELB Rans Out of Cash

More than 75,000 Freshmen depending on the student loans are now facing a tough life after the Higher Education Loans Board (HELB) ran out of cash.

According to HELB, the students who joined the public schools in September will have to wait till the Treasury offers it 3 billion shillings for initial disbursement.

Some of the delays in the cash are due to inadequate allocation and delayed release of cash by the Treasury, which triggered the cash crunch amid rising defaults from former university students.

The defaults are partially attributed to the effects of the Covid-19 pandemic that triggered layoffs, business closures, and a freeze in hiring.

Most of the students who depend on this Loan for their tuition fees and financial support come from poor families.

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The delay in the funds means risking their semester studies as most of these universities always demand full payment of a semester’s fees. This has caused some of the students to postpone their studies as they await the money.

“Right now, we have 75,000 first-year students that are yet to be funded and we require Sh3 billion to process their applications,” HELB chief finance officer Mary Wachira told the National Assembly Committee on Education during the review of the national budget.

Of the total loan disbursed, Sh8,000 is 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.

But the average allocation has dropped from 43,000 shillings to the current 37,000 shillings. This means that the Freshmen have to look for an alternative to cater to their studies and upkeep money.

Loan defaulters have weakened HELB’s ability to support the university and technical college students, prompting allocation cuts and increased reliance on the Treasury.

More than 100,000 former university students defaulted on their HELB loans at the peak of the Covid-19 pandemic.

EDITOR’S NOTE:

Article by Doreen