The country is facing one of the worst tertiary education crisis and possible drop outs after the Higher Education Loans Board (HELB) said at least 140,000 university students will miss out from this year’s allocation occasioned by budgetary slash by the National Treasury.
This predicament comes in the wake of prevailing harsh economic situation and financial crunch that has battered the country amid claims of internal wastage of funds by the president William Ruto’s administration as claimed by his chairman of his Economic Council Advisory team David Ndii.
Helb Chief Executive Officer (CEO) Charles Ringera made the shocking revelations during a media briefing in Naivasha after the launch of the HELB Mobile Wallet Payment Solution that will now enable university students to receive their loans on M-Pesa.
This will spell doom to tens of thousands of poor students who depend government loans to further their education due to their humble financial background.
Effectively, if the situation is not remedied, majority of them will drop from their tertiary education.
According to Helb, the National Treasury Cabinet Secretary Njuguna Ndung’u had allocated Sh14.8 billion against their target of Sh20.5 billion.
This came as the board noted that the number of defaulters was on the rise, a move that was affecting other beneficiaries of the education system.
Ringera said a total of over 500,000 students had applied for the loans but only 341,000 would benefit from them.
He said the board received Sh14.8billion which was Sh5.7billion less than their budgetary demands, meaning a reduction in the number of beneficiaries.
“This year, our budget is about Ksh.14.8 billion to fund about 341,000 students. However, we got a demand of about 500,000 students which means we are not able to meet the entire demand.” Ringera added.
“We have a shortfall of about 140,000 students who we have allocated zero for this year hoping that next year might be better all requiring about Sh5.7 billion.” He said.
He added that over 107,000 graduates had delayed in servicing their loans, with the numbers rising around July of every year.
Currently, the repayment rates stand at 68 per cent, however adding that the board is keen to make sure they raise it to 76 per cent by the end of the year.
“We won’t say students have defaulted, but we will say they are late in terms of payments. The current number is about 107,000 of those who have delayed, and who carry about Sh8.7billion.” Ringera observed.
He further noted that universities across the country are facing a financial crunch which has affected their operations and service delivery.
He said that they’re working closely with counties and corporate bodies in resource mobilization as part of addressing the current financial crisis.
He lauded Safaricom for the partnership, noting that the application would ease the process of disbursing HELB loans to students as well as repayment.
