The government has reduced the money allocated to the Higher Education Loans Board by more than Sh5 billion, causing over 140,000 students to be denied state loans.
According to the board, budgetary cuts targeting several government ministries would result in almost 140,000 students missing out on HELB loans.
This happened as the board highlighted that the number of defaulters was increasing, a trend that was hurting other recipients of the education system.
According to CEO Charles Ringera of the board of directors, almost 500,000 students sought the loans, but only 341,000 will profit from them.
He stated that the board received Sh14.8 billion, which was Sh5.7 billion less than their financial estimates, implying that the number of recipients was reduced.
“Due to the budgetary cuts, the number of students seeking HELB loans will drop this year but we hope that the number will rise in the coming year,” 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 but this board is keen to make sure we raise it to 76 per cent by the end of the year,” he said.
The CEO noted that universities across the country were facing a financial crunch which had affected their operations and service delivery.
He said they were working closely with counties and corporates in resource mobilisation as part of addressing the current financial crisis.
Ringera was addressing the press in Naivasha after the launch of the HELB Mpesa app that empowers students to upkeep their portion of their loans.
He lauded Safaricom noting that the app would ease the process of receiving HELB loans and repayment for the students.
“Previously, students had to open accounts to access the loans but with the new partnership with Safaricom, things will be easier and faster,” he said.
Safaricom Chief Financial Officer Esther Waititu said the app could also be used to pay the HELB loans by the students.
Waititu termed the app as very secure, adding that the students would easily access the cash for their upkeep and to pay their fees.
“For years, students have suffered from seeking bank accounts to access their loans but under this app, the cash will be available on their mobile phones,” she said.
She was full of praise for the app noting that the students could easily get their statements and make their decisions faster.
