Proposed law to boost Helb funds
What you need to know:
- He said the government was in talks with development financiers to set up a credit line through local banks to fund the expansion of universities and raise more than Sh10 billion needed for student loans.
The Higher Education Loans Board could soon be converted into a bank-like institution, if a proposed Bill sails through Parliament.
Education Cabinet Secretary Jacob Kaimenyi said the government plans to restructure the student loans board to respond better to growing demand for higher education financing.
Prof Kaimenyi (above) said university students will in future be required to provide collateral for loans in a drastic move intended to minimise defaulting but insisted that interest rates will remain low.
“The loans board will in future operate like a bank, whose enhanced revolving fund will have structured ways of recovering monies given to students,” the minister said at the first graduation ceremony of South Eastern Kenya University in Kitui.
He said the government was in talks with development financiers to set up a credit line through local banks to fund the expansion of universities and raise more than Sh10 billion needed for student loans.
The credit line is among the strategies being considered to bankroll Helb into a new financing model, one that can substantially increase interest payable on tuition loans, especially for postgraduate students.
Responding to concerns by leaders that public universities want to raise fees, the Cabinet Secretary said the ministry only wants to create other loan products beyond the State annual allocations and recoveries.
Former Vice-President Kalonzo Musyoka and other Cord leaders urged the government to consider other ways of making university education affordable to most Kenyans especially those who solely rely on Helb to finance their studies.
He added that reduction of loan amounts would hurt students from poor families who fully depend on Helb to finance their education.
“Free university education is achievable and this country should offer significant subsidies instead of increasing to higher education, in order to grow the economy” Mr Musyoka said.
Amid cheers from the graduation party, the Cord co-principal said the Jubilee government should stop public resource wastage through corruption in order to realize the country’s strategic goals like free education.
Prof Kaimenyi responded that: “We are working on modalities to transform Helb to a bank to make it more effective and a Bill will soon be tabled in parliament to help the ministry recover loans from defaulters.
According to Helb’s strategic plan for 2013-2018, the board is seeking to charge at least eight per cent on all loans to undergraduate students sourced outside state funds from June next year.
The board currently charges four per cent for postgraduate loans.
Seku Vice Chancellor Prof Geoffrey Muluvi said the university will utilize its expansive 10,000 acres of land to make it the largest University in East Africa while collaborating with county governments in areas of research, trainings and policy formulations.
