The Higher Education Loans Board (HELB) is pushing Parliament to grant it stronger legal powers to help recover over Ksh35 billion owed by more than 316,000 former university students who have defaulted on their loans.
In a bid to safeguard the fund’s sustainability, HELB CEO Geoffrey Monari appeared before the National Assembly’s Public Investment Committee on Governance and Education to make a compelling case for these new measures.
Monari revealed that, although 780,000 students have benefited from HELB loans since its inception, only about 464,000 are currently repaying their debts. Even among those repaying, the board recovers a modest Ksh66 million, a figure Monari described as far too low to keep the revolving fund running smoothly.
“Only Ksh66 million is being repaid by 464,000 students, typically over a 10-year period. Meanwhile, the 316,000 defaulters have not started repayments. If we can get them to start repaying, it would significantly improve cash flow to support current students,” Monari explained.
HELB Pushes Parliament for Stronger Loan Recovery Laws
The CEO mentioned that a significant number of defaulters have stable jobs, run businesses, or live abroad, yet have chosen not to honor their loan obligations. This reality, he said, calls for new legal tools to track down and enforce repayments.
To address the rising tide of defaults, HELB is proposing amendments to existing laws that would empower the board to freeze the bank accounts of defaulters with steady incomes.
“My request is for legislation that allows us to freeze accounts of former students who are doing business but not repaying their loans, similar to how the Kenya Revenue Authority (KRA) freezes business accounts. This would encourage defaulters with steady incomes to comply,” Monari stated.
Despite this, Members of Parliament expressed skepticism, highlighting HELB’s over-reliance on Treasury allocations and questioning the effectiveness of its current loan recovery mechanisms. They urged the board to first exhaust existing recovery options before seeking expanded powers.
In response, Monari detailed that HELB operates an inspectorate department dedicated to enforcing compliance. He revealed that the law fines employers Ksh3,000 per student per month if they fail to deduct and remit loan repayments, yet acknowledged that the board needs stronger systems to improve recovery.
HELB Teams Up with Embassies to Track Defaulters Abroad
Monari also addressed the challenge of defaulters living abroad, admitting that enforcement is difficult. To tackle this, HELB is collaborating with Kenyan embassies and the State Department of Immigration to enhance tracking and encourage diaspora loan repayments through online campaigns and cross-agency partnerships.
“We face challenges with the diaspora. We are working with our embassies and running online campaigns to encourage repayment,” Monari explained. “We are also exploring partnerships with the State Department of Immigration to track Kenyans leaving the country using their ID numbers linked to passports. This would help us locate defaulters more precisely.”
For self-employed graduates and those working in the informal economy, HELB blacklists defaulters with the Credit Reference Bureau (CRB), limiting their access to loans and other financial services.
However, Monari acknowledged that monitoring income streams from gig jobs, informal businesses, and online work remains a challenge due to irregular earnings and poor reporting.
The Public Investment Committee has since summoned Education Cabinet Secretary Julius Ogamba and Higher Learning Principal Secretary Beatrice Inyangala to appear before it on June 18. The two officials will be called upon to present the ministry’s plans for addressing HELB’s financial challenges and the broader loan recovery crisis affecting the higher education sector.
