More than 113,953 eligible students will not get loans in the remainder of the current academic year, the Higher Education Loans Board (Helb) has said after the strict measures it unveiled last year failed to jolt past beneficiaries to pay up.
The agency whose student funding budget for year to June stands at Sh15.5 billion had hoped to recover Sh4.9 billion from past loanees.
“If the target of Sh4.9 billion is not achieved, a third of the 370,000 students in universities and technical and vocational education and training (TVET) colleges will not get loans for remaining part of the 2019/2020,” chief executive Charles Ringera told the Business Daily.
Students from low income families rely heavily on the Helb loans and bursaries to finance their higher education.
Failure to disburse their funds for semester that starts next week implies that a number of students are likely to drop out during the academic year that ends in June.
The State agency missed its half-year collections target by around Sh100 million to collect Sh2.2 billion against the Sh2.3 billion target.
Helb is supposed to be a revolving fund where beneficiaries who have finished their studies pay back the loans to support a fresh group of students.
The agency said it is pursuing some 78,328 loan defaulters holding Sh7.7 billion as at December 31 last year. The past beneficiaries have not responded despite frequent threats of prosecution, credit bureau listings and deployment of specialised debt recovery agents.