Wajir senator pursues lifeline for Helb loan defaulters
Students and parents return loan application forms to the offices of the Higher Education Loans Board in Nairobi on September 30, 2016, which was the deadline. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP
What you need to know:
- The motion by Wajir Senator Abdullahi Ali will have to be implemented by the Education ministry before its full benefits are realised, assuming it is adopted by lawmakers.
- Wajir Senator Abdullahi Ali wants the ministry and Helb compelled to institute a six-month full waiver period for interest and penalties, as well as the lifting of blacklisting by the Credit Reference Bureau
- Mr Ali, however, wants the six-month period extended only to defaulters willing to repay their loans in full within the period.
Higher Education Loans Board (Helb) defaulters will soon be reprieved if the Senate approves a motion seeking a waiver of all their accrued interests and penalties.
However, the motion by Wajir Senator Abdullahi Ali, currently before the Senate, will have to be implemented by the Education ministry before its full benefits are realised, assuming it is adopted by lawmakers.
Mr Ali wants the ministry and Helb compelled to institute a six-month full waiver period for interest and penalties, as well as the lifting of blacklisting by the Credit Reference Bureau (CRB).
“This prevents them from accessing loan facilities with any financial institution in Kenya [as well as] employment opportunities in the government and other major private and publicly listed companies,” he said, noting that loan guarantors are also pursued and forced to service the Helb loans.
SENSITISATION
Mr Ali, however, wants the six-month period extended only to defaulters willing to repay their loans in full within the period.
He also wants the ministry and Helb to embark on a 45-day sensitisation exercise preceding the waiver, no later than 90 days after the passage of the motion.
The legislator's motion is predicated on concerns that Helb reports the beneficiaries to the CRB if they fail to remit their monthly installments.
Although measures were taken by the ministry to enhance the repayment of the loans, including working with law enforcement officers to ensure employed defaulters make the payments, the senator says it is impractical.
He argues that there are graduates from institutions of higher learning who have not been gainfully employed for many years after their graduation.
“They are therefore overburdened with loans that have accumulated interest and penalties that they have no means to repay,” he says.
LEADING FINANCIER
Since its inception in 1995 through an Act of parliament to administer the student loans scheme, Helb has become the leading financier of higher education in the country.
The board is charged with sourcing for money and lending it in the form of affordable loans, bursaries and scholarships to students in recognised institutions
But the ministry announced that the government has lost about Sh7.2 billion, with about 74,692 graduates defaulting payment of the study loans.
