The Higher Education Loans Board (Helb) has moved to frustrate the ongoing push to have jobless graduates exempted from being forced to service their school loans until they are able to secure employment.
Helb CEO Charles Ringera told Parliament that the board had no elaborate mechanism of determining who was employed so that they can start furnishing their loans adding that they only depend on loan beneficiaries’ goodwill.
Ringera vehemently opposed the proposals saying that it would bar them from those who are self-employed and are doing well enough to pay the loans.
“The proposed amendment is objectionable as it will no doubt weaken Helb’s loan recovery mechanisms,” Ringera said.
Helb further added that passing the proposal would mean that the loanees would only put in minimal effort in looking for employment in a bid to service their loans.
In defending the proposal, Ringera also noted that the funds work on a rotational basis which means they have to pay so that they can be given to other students who cannot pay their school fees.
The proposal to spare graduates from the pressure of having to pay back the loans regardless of one’s employment status is being pushed by Igembe South MP Paul Mwirigi - Kenya's youngest MP.
According to the MP, the time was ripe for the Helb Act to undergo some amendments to make it more favorable to graduates considering how the rate of unemployment had risen.
The lawmaker also argued that the one-year grace period given to beneficiaries before beginning to pay the loan was impractical considering some people spent over five years before landing a job.
The current Helb Act shows that all graduates who benefited from the loan have only one year from the day of graduation after which they are expected to begin their loan repayment.
The requirement has made it more difficult for thousands of Kenyans who have been hit hard by joblessness.
Helb loan defaulters are also charged Ksh5,000 a month in penalties within a year of completing their studies.
This has resulted in many jobless graduates being listed with the Credit Reference Bureaus (CRB).
