Fresh graduates and youths burdened by outstanding High Education Loans Board (HELB) loans may soon breathe a sigh of relief should the Higher Education Loans Board (Amendment) Bill sail through.
The Bill, set for the first reading in Parliament on Wednesday, July 26, seeks to lower the financial burden on youth seeking jobs amid the tough economic times.
Machakos Member of Parliament Joyce Kamene, the sponsor of the Bill, wants graduates to repay their loans after securing their first job or when they become financially stable.
If approved, youth who have taken out loans from the institution will only be subjected to a three per cent interest rate after securing employment.
Currently undergraduate, certificate, and diploma students are charged an interest rate of 4 per cent per year. Loan beneficiaries start repaying loans after a year or can also make voluntary payments before or after they complete their studies.
"The maximum interest rate to be charged by the Board on the principal amount advanced to a loanee shall not be more than three percent per annum," reads part of the Bill.
According to the proposed bill, the youth and persons with disabilities will not repay loans until they have secured their first employment after graduation.
Penalty for defaulting on loans shall also be charged after one is employed or five years after completion of studies.
Notably, any loanee who fails or neglects to satisfy the requirements outlined in the Act is guilty of an offence and liable to a fine of not less than Ksh5,000 for each unpaid loan deduction.
"The bill does not concern county governments in terms of Article 109(5) of the Constitution as it does not contain provisions that affect the function and powers of the county governments as set out in the Fourth Schedule to the Constitution," an excerpt of the bill reads.
On Sunday, July 23, HELB called upon students joining the university in September 2023 to apply for loans before the stipulated time lapses. Earlier, the board had cancelled allocation for the first years due to financial constraints.
Despite the proposals centred around HELB, President William Ruto in January 2023, announced plans to fund and establish the National Skill and Funding Council (NSFC).
According to Ruto, NSFC will absorb the Technical and Vocational Education and Training (TVET) allocation and increase funding by 45 per cent compared to HELB. Funds allocated will thus increase from Ksh11 billion to Ksh22 billion.
It will also be tasked with mobilising grants, bursaries, and scholarships from private and public sponsors to cover non-tuition costs for university students.
"In the last four months I have been in office, I have laid a perfect groundwork that will transform the country's tertiary education system. The NSFC will merge the existing funding bodies," he declared.
