Student Loans Board ‘bankrupt’ throws university education into crisis – Nairobi News

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The coffers of the Higher Education Loans Board (HELB) are empty and thousands of freshmen are not getting loans from the state.

On Thursday, Helb leaders told parliament he had run out of money which is normally given to students from poor households who need financial support to pay their tuition and maintenance.

The board said freshmen, who joined public universities in September, will have to wait for the Treasury to offer it 3 billion shillings for the initial disbursement.

“At present we have 75,000 freshmen who have not yet been funded and we need 3 billion shillings to process their applications,” said Helb’s finance director Mary Wachira, to the Education Committee of the National Assembly during the examination of the national budget.

Most universities require full payment of one-semester fees to admit students and delay disbursement, which may cause some first-year students to postpone their studies.

He added that an inadequate stipend and delayed release of cash from the Treasury had triggered the cash crisis amid growing defaults by former university students following the Covid-19 pandemic which triggered layoffs. , business closures and a hiring freeze.

The agency funds needy students from 35,000 to 60,000 shillings per year, depending on their economic status.

Of the total loan disbursed, 8,000 shillings are sent directly to the university as tuition fees and the balance to the beneficiary’s bank account in two equal installments covering the first and second semesters.

Recipients are expected to repay their loans within four years, an indicator of how layoffs and hiring plan freezes have hit young workers.

Last December, Helb said he cut the average amount offered to students for loans from about 45,000 shillings to 37,000 shillings.

Wachira also revealed that for a student to be comfortable, he needs an annual budget of around 200,000 shillings.

“Given that Helb is currently providing around Sh37,000, this means that the students or household must raise an additional Sh162,000.”

Over the years, Helb has struggled to meet the growing demand for loans.

The number of government-sponsored students in public universities has grown at the fastest rate in four years, with state funding approaching the 42 billion shillings mark.

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