HELB Has Been STOPPED: If You Have Ever Taken A Loan From HELB, This Is For You

The High Court’s decision in Mugure & 2 others v Higher Education Loans Board (HELB) is one of the most important judgments for millions of Kenyan youth burdened by student loans. For years, HELB beneficiaries have complained that their loans ballooned beyond control because of endless interest and penalties. This ruling finally puts into words what every struggling graduate has always known: the system was punishing the poor for being poor. And now, the court has declared that HELB’s practices were unconstitutional, discriminatory, and illegal.

At the heart of the case is a simple but powerful principle called the in duplum rule, a law under the Banking Act that says interest and penalties on a loan cannot exceed the principal amount borrowed. If you took KSh 100,000, the lender cannot charge interest and penalties exceeding another KSh 100,000. Banks have always been bound by this rule, but HELB has behaved as if it was exempt, allowing small default amounts to balloon into crippling debts. The petitioners—Anne Mugure, Davis Ng’uthu and Wangui Wachira—argued that this amounted to discrimination. The court agreed.

The judges made it clear that HELB’s mandate to support education does not give it license to trap graduates in debt. The petitioners were young Kenyans from humble backgrounds who borrowed to study, only to find themselves unemployed after graduation. Instead of accommodation or support, they faced punishing interest and penalties that grew beyond the original amount borrowed. The court noted that many graduates find themselves jobless for years, and allowing HELB to continue piling charges ad infinitum would make repayment impossible and unjust. It would also defeat the purpose of the loan scheme: to empower, not cripple.

The court highlighted that HELB’s continuous imposition of interest and penalties—even after the amount owed had doubled the principal—was unlawful. Section 44A of the Banking Act, which domesticated the in duplum rule in Kenya, was meant to stop exactly this type of predatory accumulation. By refusing to apply this rule, HELB was treating its borrowers differently from bank borrowers, violating the constitutional right to equality and freedom from discrimination. A student’s poverty should never become a punishment.

Interestingly, the ruling reveals that HELB itself had admitted the in duplum rule applied, and claimed it was taking steps to adjust its systems. But the court noted that compliance with the law is not a favour—it’s an obligation. The in duplum rule applies automatically, by operation of law, whether HELB likes it or not. That means once a loan amount clocks double the initial principal, interest and penalties must stop. Anything beyond that is illegal and unrecoverable.

The petitioners successfully convinced the court that HELB’s fines and interest had exceeded the principal amount and that this violated their socioeconomic rights under Article 43. These rights include the right to education and to a standard of living compatible with dignity. Crushing graduates with runaway penalties undermines these rights by trapping them in a debt cycle they cannot escape, especially in a shrinking economy with limited job opportunities.

The judges did not stop there—they declared Section 15(2) of the HELB Act unconstitutional to the extent that it allowed interest and penalties to exceed the principal amount. This section had long given HELB excessive power to punish defaulters through fines and penalties, creating a system where the poorest graduates suffered the most. By reading the in duplum rule into the HELB Act, the court restored fairness in student loan recovery and aligned the law with constitutional values.

One important point in the ruling is that HELB was not denied the right to pursue borrowers who had taken loans but failed to repay. What the court clarified is that HELB must pursue repayment within legal limits. Charging endless interest and fines is not repayment—it is exploitation. The ruling emphasizes that education loans must be treated with fairness and justice, especially because they target young people who often have no financial safety net.

The judgment makes clear that HELB’s failures were not just administrative—they were constitutional violations. By imposing interest and penalties beyond the principal amount, HELB violated Article 27 (equality), Article 43 (socioeconomic rights), and Article 46 (consumer rights). These provisions exist to protect vulnerable citizens, including students who depend on government loans to complete their studies. The court insisted that loan recovery systems must be humane and just, not oppressive.

This ruling also exposes a bigger problem: the State’s failure to regulate its own institutions. The Banking Act introduced the in duplum rule to protect borrowers from predatory lending. If banks—profit-driven entities—are required to behave fairly, how then could HELB, a public fund designed to support education, justify harsher practices? The court’s judgment is an indictment of years of policy neglect and financial mismanagement.

For HELB, this ruling has financial implications. It means the institution must recalculate thousands of loan accounts and remove all interest and penalties charged above the principal amount. Many graduates whose loans have ballooned over the years may now discover that their remaining balances are far lower than what HELB has been demanding. The court’s declaration that HELB was not entitled to recover anything beyond double the principal is a financial relief to countless Kenyans.

The ruling also sends a message to Parliament: the HELB Act needs urgent reform. The court noted that reading the in duplum rule into the Act was necessary to align it with the Constitution. But without legislative amendment, HELB may continue exploiting grey areas in the law. Parliament must now revise the law to create clearer, fairer loan terms that protect students from predatory financial practices.

For the youth of Kenya, this case should be a turning point. It acknowledges their struggle with unemployment, economic hardship, and the burden of education financing. It affirms that the law is on their side, and that fairness must be at the centre of public lending. The ruling restores dignity to graduates who were made to feel like criminals for being unable to pay debt that doubled, tripled, and quadrupled beyond the original loan.

This court decision is more than a legal victory—it is a moral one. It rebalances the relationship between the State and the youth. It declares that even government agencies must operate within the law and respect constitutional rights. For a country where many young people feel abandoned by the system, the judgment is a powerful reminder that justice can still be found in our courts.

Ultimately, the High Court has done what Parliament and HELB failed to do for decades: protect Kenya’s students from financial abuse. The ruling forces HELB to adopt transparency, fairness, and proportionality in loan recovery. And as HELB adjusts its systems, millions of Kenyan graduates now have a chance to breathe again—knowing that the law has finally stopped the endless cycle of punitive interest and crushing penalties that had trapped them for years.

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