The Higher Education Loans Board (HELB) has slashed the average loan offered to university students by Ksh 8,000.
HELB CEO, Charles Ringera, said that they had reduced the loans from Ksh 45,000 to Ksh 37,000 due to the effects of the Covid-19 pandemic.
Speaking at the board’s headquarters in Nairobi on Wednesday, December 2, 2020, Ringera added that graduates had defaulted on their loans after many of the beneficiaries have been rendered jobless.
“Covid-19 has negatively impacted household incomes. Ordinarily, 80 percent of students admitted to universities would apply for HELB support but this year out of the 122,000 students placed in universities, the applications now stand at 155,000.
This indicates that the number of parents who would not necessarily have intended their children to borrow has now applied (to get a loan) due to loss of income,” Ringera said.
Ringera also warned students who are in the second semester of their academic years and fourth-year students that they may miss out on loans despite making applications.
He stated that the money had been used for other social needs. The CEO regretted making the decision, adding that needy students would be most affected.
With the Building Bridges Initiative (BBI) pushing for the extension of the loan repayment period, Ringera lamented that the move would cripple the struggling agency in the aftermath of the Covid-19 pandemic.
The decision to slash HELB loans comes at a time when the government wants to triple university fees.
Senior Treasury and Education officials proposed that university fees be increased from Ksh 16,000 to Ksh 48,000. The National Assembly Committee on Education is leaning towards adopting the proposal.
Vice-chancellors had been pushing for the fee hike to cushion their institutions from struggling to maintain payrolls.