A proposal to have one given a notice and swear an affidavit at the Higher Education Loans Board (HELB) when unable to pay their student loan, has been rejected.
In a memorandum sent to parliament by President Uhuru Kenyatta, concerning the amendment of the 2015 HELB Bill, Kenyatta said that the move would weaken the board's loan recovery mechanism.
The President rejected the proposal that sought to allow beneficiaries who do not get employed within their first year after studies, to write to the board in order to evade penalties imposed on defaulters.
"The proposed amendment is clearly objectionable as it will, no doubt, weaken the board's loan recovery mechanism. This is because loanees will no longer feel pressured to complete their studies and enter into gainful employment so they can start servicing their loans," he said..
Kenyatta added that it was not the board's duty to find out whether beneficiaries had a place of employment and that it was wrong for legislators to try and make it HELB's obligation.
"It will be extremely difficult for the board especially in cases where loanees are in the informal sector or are self-employed, or where they live and work outside the country and is likely to cost the Board a lot of valuable income. This state of affairs may also scare away alternative fund providers who might consider investing in the board too risky," said President Kenyatta.
In his proposal, Kang'ata wanted beneficiaries who failed to acquire a source of income to swear an affidavit every year confirming their inability to pay.
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