The main problem isn’t that the number of public universities has gone up or that the number of students joining public universities has increased. The increase in student numbers and the fact that students in private universities also get loans just means that Helb will go broke faster.
To succeed, it should have had the government’s allocation increasing annually. It should also have ensured low default rates and made sure its interest rate was above the consumer price index. It isn’t like that. The government last year refused to increase its funding, with the President bluntly telling Helb to figure out a source of income or perish. The repayment rate is atrocious because the economy isn’t yielding jobs for the youth, and the 4 per cent interest rate is often half that of inflation. Even if the student numbers are capped, inflation and the default rate should put the fund out of business soon enough.
So, the question was really when Helb would fail.
The problem with the fund has become particularly acute. The past two months have seen the loans board come up with two very bad ideas on how to address its funding problems.
Helb recently announced that it plans a lottery to fill its massive funding gap. Gambling is a tax on innumeracy and it seems particularly perverse that our children will be dependent on bets to fund their education. The government should help people break addictions, not impose them.
Earlier in the year, it was revealed that Helb would seek to insure the loans it gives to students. An insurance policy will only add to the cost of the loan.
Besides, the insurance policy will not come cheap. Students have a notoriously high default rate. Past data shows that it is more unlikely than likely that a student will finish paying off their loan. Many Helb loans have either been defaulted on or not yet matured, or the person involved cannot be traced.
More importantly, the cost of university loans can become a contentious issue nationally. Students can march on Parliament and demand a reduction or a review of the rates as they have done in many countries. You can’t shoot them if they do. No insurance company would want to place itself squarely in the crosshairs of angry young adults.
The truth is that Parallel students are the ones who have kept the lights on in universities. The cost of tuition paid by the loans board to universities is a pittance and Module II has been forced to make up the difference. University education for regular students is already being subsidised by parallel students.
The problem is that this subsidy is now not enough. An increase in interest rates is out of the question. The Helb repayment system already punishes lower income earners. If you earn a high salary after university, you will pay off your loan faster and incur lower interest than those who earn a lower salary, who will have a longer repayment period. Raising interest rates will punish the majority, who are not rich enough pay off their loan quickly, most severely.
Look at Germany, which offers free higher education to all students, including foreigners. The cost of funding education for all these foreign students runs into billions of dollars annually but the government reckons that the economy benefits more when smart foreigners come to its universities. Germany figured out that if you offer free education to foreigners, chances are that the very successful ones will stay with their businesses in Berlin rather than take them home.
Germany now has a higher trade surplus than even China, yet the entire world is made in China. Germany knows that it pays to invest in education. And with its falling population, growing cash pile and now attractive universities to foreigners, it is destined to be the richest country on earth.
Education is a public good. Loans will never be enough to fund higher education. Look at the Everest of student debt in the US now clocking trillions of dollars. Pushing universities to the market system will always lead to crippling debt.
Education cannot be left to market forces. The market can’t make moral judgments on its importance. The reason we fund free primary education is that we decided that it was important to have a mass of educated children. This is the same reason university education should be free.
It seems immoral that a government agency would dabble in a vice as corrosive as gambling to fund universities. The answer is simple: either we increase tax or prioritise higher education.
Instead of the lottery, I have a suggestion – progressive taxation on gambling, property and banking to fund higher education loans. These sectors of the economy are growing and often owned by the rich.
Of course, some will agree with the President, who said that there isn’t money for such fancies as Helb. There always seems to be enough money for the military, which recently bought a drone. The KDF budget is always larger than the health ministry’s. Generals are more important than general hospitals. Afco comes before aspirin. There is enough money for National Intelligence Service (NIS). The budget for NIS is several multiples that of Helb. It is a question of priorities. Which do you think holds the key to Kenya’s future: Helb or KDF?
Morality and sex are completely different issues
A LOT OF THE mail I got from the last piece I wrote equated sex with moral issues.
Sex has nothing to do with morality. Only some religions and cultures worry about it. Hindu temples have images of sexual activity on the walls. The Kama Sutra celebrates sex as an expression of divine creation. A thousand years ago, Romans did the same, with murals and statues of people having intercourse in the homes of the rich.
In Jamaica, the dinky mini dance, which puts a lot of emphasis on thrusting hip movements, is performed during burials to celebrate sex as an expression of creation.
However, certain religions and cultures have hang-ups to do with sex.
It isn’t just sex that is the problem, it is young women having sex that irks people so much.
This hang-up about young women sex comes from a time when men were the sole bread winners and questions about paternity could stop them from contributing to their children’s upkeep. “Fatherless” children were a drag on an economy in which women did not work. As more women become more economically empowered, the male economic necessity to raising children will be limited.
The questions of fathers providing for their children is an economic one, not a moral one. Morality is concerned with the inflicting of pain on sentient creatures.
Sex is more a biological urge than a question of morality. When we hear that the young are engaged in sex, we should be concerned about their contraceptive use.
A university planning to sell water? Strange!
IT WAS ANNOUNCED this week that a public university in Chuka, Tharaka Nithi County, is going to go into the business of selling of bottled water.
What has happened is that the government has decided that education is no longer worth public support. Universities have been forced to sink or swim. The government allocations to universities do not take into account inflation, student numbers or even the need. As such, it makes cuts annually to universities by keeping the allocation more or less flat.
Universities have been forced to have income-generating businesses to keep the lights on. So we have all these get-rich schemes that detract from their primary objective.
Kenyatta University has a TV station, UoN is in the real estate business and Chuka University is selling bottled water.
I never thought they would sell water. Water bottling is a low-skill jua kali industry you can start in a servant’s quarters. It has low margins and no barrier to entry. The product is virtually worthless.
Tharaka Nithi is among the most water-rich counties in the country. There is almost no demand for bottled water around Mt Kenya.
I know that you could use an image of Mt Kenya to sell the water but it is still water. Universities should not be in the mkokoteni business.
Do you think any other universities that top the world in research sell water?
On adults’ reaction to ‘Project X’
WAGA SEEMS to have got the wrong end of the stick. The issue is not strictly about sex; it is about moral degradation. You can have all the sex you want as long as you take precaution. However, the drug issue is something out of hell. You need to see brown sugar, heroin or ecstasy and other drug addicts to truly appreciate what’s at stake here. I wonder how you would feel if your child were to go mad because of using marijuana, or develop tremors, a vegetative mess because of heroin. You should research your topics before exposing your ignorance.
BEFORE WRITING nonsense for us in the paper, can you send your sons, brothers, sisters, nieces and nephews to those parties for free sex, drugs and alcohol.
Have you ever visited Mathari Hospital and seen how wasted the brains, mostly of engineering students whose lives have been messed up by drugs, are? After taking drugs and alcohol, these young people are too drunk to even remember to use contraceptives properly, so many end up with sexually transmitted infections and unwanted pregnancies. Stop misleading the youth; you seem lost yourself and need help and guidance.
THE WAG IS WRONG to impute that simply because sex and drug use/abuse are prevalent among the youth, society and the State should accept them as the norm. If the youth are to be allowed to do anything they want, what kind of adults does The Wag expect out of them. Might he be saying that he would have no qualms hosting youth as young as 18 at “Project X?”
It is wrong for him to ridicule parents by referring to them as grandad and implying that they do not know what is good for young people. Please respect senior citizens; they are the custodians of wisdom, morals and the standards of morality. Stop setting moral standards that are below sea level.