Helb rejects Bill seeking to reduce loan burden on students
The Higher Education Loans Board (Helb) has rejected the proposed 2023 amendment Bill sponsored by Machakos MP Joyce Kamene.
This Bill aimed to alleviate the financial burden on recent graduates by extending the loan repayment period, particularly for youths and persons with disabilities.
Currently, undergraduate loan repayment starts within a year of completing studies, but Kamene’s proposal sought to extend this grace period to five years after securing employment.
However, Helb CEO Charles Ringera argued that amending the Principal Act in this way would hinder the board’s ability to provide funds to other students in need, as loan repayments are crucial for creating a revolving fund.
Ringera also opposed Kamene’s proposal to reduce the interest rate on loans for youths and persons with disabilities from four percent to three percent per annum. He contended that such a reduction would negatively impact the sustainability of Helb’s management and its ability to finance needy students.
Also Read:Â HELB has Extended First time Loan Application Deadline
He further explained that the current four percent interest rate already accounts for annual inflation. Reducing it, along with delaying repayments, would strain Helb’s cash flows, requiring additional funding from the National Treasury to compensate for the loss in interest.
Ringera also referenced a recent judgment from the High Court of Kenya that limited the amount of interest and penalties Helb can charge, further highlighting the financial challenges Helb faces in implementing these proposed changes.
Helb rejects Bill seeking to reduce loan burden on students
