HELB Runs Out of Funds, 140,000 Students Will Miss Out on Loans

HELB Runs Out of Funds, 140,000 Students Will Miss Out on Loans

HELB Runs Out of Funds, 140,000 Students Will Miss Out on Loans. Since the Higher Education Loans Board (Helb) ran out of funds, approximately 140,000 students enrolled in public universities and technical and vocational education and training (TVET) institutes have been unable to obtain State loans, making it difficult for them to find alternative sources of funding for tuition, housing, and maintenance.

Helb told Parliament on Wednesday that the students would have to wait till the Treasury provided Sh5.7 billion before receiving any further payments.

The majority of loan applicants are from low-income families and rely on Helb for help with tuition and living expenses.

According to Helb CEO Charles Ringera, “we currently have 140,000 students in Tvets and universities that we have not been able to fund to the tune of Sh5.7 billion because we have run out of the budget that we had presented to Treasury of Sh4.5 billion.”

The 140,000 students are nearly triple the 75,000 that the organization was unable to pay during a comparable time period last year due to a Sh3 billion delay in disbursements by the Treasury.

As a result of the delayed release, the students, the most of whom are first-years, will have to find alternative methods to pay for their tuition, housing, and maintenance while they wait for government money.

Mr. Ringera stated that a request to use extra funds to fill the current financing shortfall was denied.

In the current fiscal year, the organization was awarded Sh14.8 billion to fund students based on their financial situations.

An approved loan applicant will receive between Sh35,000 and Sh60,000 per year.

Sh8,000 of the total loan amount is paid to the university as tuition, and the remaining Sh20,000 is deposited to the beneficiary’s bank account in two equal payments, one for the first semester and the other for the second semester.

Helb is intended to be a revolving fund in which participants who have completed their studies pay back to assist new students.

However, in a down economy plagued by a hiring freeze brought on by poor economic outcomes, this has not been the case.

He told the National Assembly’s Public Investments Committee on Education and Governance (PICEG) that “every month, we collect around Sh400 million from former loanees, which we add to Treasury’s quarterly disbursements to service applications by ongoing students.”

HELB Runs Out of Funds, 140,000 Students Will Miss Out on Loans

The first Treasury disbursement is usually expected in August, a month before colleges and universities begin school in September.

According to him, “the quarter exchequer release is about Sh3 billion, and what Helb has collected by that time is Sh1.2 billion, totaling around Sh4.2 billion, which is way below the Sh7 billion required to adequately service loan applications.”

In order to address the mismatch, Helb and the Treasury agreed to a settlement in which payments will now be distributed every six months rather than every four months.

“Treasury released Sh5.6 billion to us in September of last year, and we had about Sh4 billion in collections at the time.” According to Mr. Ringera, we were able to pay the complete fee for September and October after totaling the two.

The Treasury only issued Sh2.5 billion for semester two’s December payments; the remaining funds were just recently sent to Helb’s account as a result of student protests on the streets.

Helb has struggled to keep up with the rising demand for loans over the years.

The number of government-sponsored students at public universities has expanded at the fastest rate in the past five years.

The number of candidates who completed the Kenya Certificate of Secondary Education (KCSE) exam with the requisite grade for university admission in 2022 increased by 19% to 173,345 from 145,776 the previous year.

HELB Runs Out of Funds, 140,000 Students Will Miss Out on Loans

Almost all students who received a C+ or higher in the previous five years were accepted into regular university programs and thus qualified for Helb loans.

Loan defaulters have undermined Helb’s ability to fund university and technical college students, resulting in budget cuts and an increased reliance on the Treasury.

During the height of the Covid-19 pandemic, almost 100,000 former university students failed to make Helb loan installments.