The publication of the bill to amend the Higher Education Loans Board Act, 1995 is an excellent opportunity to discuss and find solutions to financing higher education. Having been in operation for close to 30 years, it is time to take stock of Helb’s hits and misses.
While the bill mainly focuses on the section concerned with repayment of student loans, a more exhaustive analysis of Helb is important as restructuring it to make it the sustainable revolving fund it was meant to be. Helb clearance has become crucial for people seeking jobs and other opportunities.
Machakos Woman Representative Joyce Kamene proposes that graduates be spared demands for Helb study loan repayment until they secure their first job.
She’s attempting what two other MPs failed to accomplish after retired President Uhuru Kenyatta rejected similar amendments. Much as it is important to cushion jobless graduates from punitive penalties, Helb needs a mechanism of determining that one is not in gainful employment to be allowed more time to repay.
Ms Kamene also proposes that the interest charged on the loans be lowered from four to three per cent. But that runs the risk of negatively affecting the fund; the interest is meant to protect it from inflationary stress. Being lower than the annual inflation rate, lowering it further may bring down the fund.
However, a new approach is needed for the monthly Sh5,000 penalty charged for default. This has led to the ballooning of the loans that, at times, make the borrowers avoid their obligations.
Those who voluntarily go to Helb to pay their loans should be considered for penalty waivers. The board should also invest in technology to track defaulters, particularly through the Kenya Revenue Authority infrastructure.
The Kenya Kwanza regime has hinted at amalgamating Helb, the Universities Fund and the Tvet Fund. The latter two entities are fairly new and not as well-established as Helb. The ensuing monolith may further complicate universities funding.
