HELB's Dilemma: Will beneficiaries Step Up and Repay Their Loans?

The Higher Education Loans Board is an organization which gives financial assistance to students who would otherwise fail to acquire their University or college education.

It does this by giving loans and definitely making agreements with the loanee on the amount of interest the loan will increase by incase they do not pay within the given period of time. It is with great concern that the board addresses the issue of some of the Loanees not paying their loans.

HELB funded 606,329 students at a total cost of ksh 33.45 billion in the financial year 2023/24 bringing the total number of beneficiaries to 1,696,781 since inception . HELB has revealed that there are 710,107 borrowers who have taken out loans totaling ksh 41.73 billion which are not yet due for repayment.

In Contrast, there are 986,674 loans amounting to ksh 227.81 billion that have matured and are currently due for collection . HELB disclosed that only 443,501 beneficiaries are repaying their loans accounting for ksh 64.01 billion, whereas 298,511 accounts holding 32.81 billion are in default.

However, despite the above complains, there are a number of factors which have to contributed to people not paying their HELB loans. One key factor is unemployment. This has been a disturbing issue countrywide.

A lot of youths are staying in their homes unemployed. Looking for money to just sustain their daily life is making it difficult to get that extra which they can use to pay their loans. I am personally a beneficiary of the HELB loan and I also agree that loanees should take responsibility and pay their loans. However ,I also understand the difficulty that they may face in that process.

Also there are loanees who are not aware of their terms and conditions regarding repayment of the loans and also the consequences they may face failure to paying the loan. This lack of awareness can lead to negligence in making timely payments. Also economic challenges.

The broader the economic challenges facing the country, including the inflation and the high cost of living ,leave many graduates financially strained .Even those who are employed prioritize immediate needs over loan repayment.

The failure to repay HELB loans has significant repercussions. Firstly , it reduces the funds available for future students , limiting their opportunities for higher education. Secondly it places a financial burden on the government which may need to inject additional funds into HELB to keep it operational. Lastly it affects the credit worthiness of individual defaulters, potentially hindering their ability to access other forms of credit in the future.

However, there are various measures that may be used to curb non repayment of loans. First by enhancing employment opportunities, through creating more jobs opportunities for graduates can directly impact their ability their ability to repay loans. Secondly, using flexible repayment plans.

Introducing more flexible plans that take into account the financial situations of graduates could encourage more loanees to repay their loans . Finally, conducting awareness campaigns to educate students and graduates about their repayment obligations and and the consequences of defaulting can help improve repayment rates.

The issue of HELB loan non-repayment requires combined efforts from various stakeholders including the government, education institutions, employers and the loanees themselves .By identifying the roots causes and implementing effective measures ,we will be able to increase the repayment rates and thus continue to support future generations of Kenyan students.