Relief for students as Treasury releases Sh2.8 billion for Helb
The Higher Education Loans Board (Helb) has now received Sh2.8 billion from National Treasury to cater for loans for university students.
Helb had last week stated that it did not have funds-at least Sh6 billion – to disburse to students, which should have hit their accounts in January.
“We have today received the Financial Year 2020/21 Quarter three capitation of Sh2.8 billion from National Treasury. The pending student loan payments are currently being addressed and will be concluded by March 18,” Helb said on Monday, in a notice posted on their twitter account.
Loan defaulters, Helb Chief Executive, Charles Ringera last week said they still did not have money to release to about 500,000 students and urged the National Assembly committee on education to intervene so that the money can be disbursed soon.
Ringera, pictured, said the board is expected to disburse at least Sh3.7 billion to university students and another Sh2.3 to Technical and Vocational Education and Training (Tvet) learners.
“We are still waiting for funding from the National Treasury, for now we do not have funds to release to students. The students will have to be patient because we have nothing to give them at the moment,” Ringera told the education committee last week.
The issue of delayed funds was further exacerbated by loan defaulters, some of whom the board said have the capacity to pay but have disregarded repayment plan.
Moi university students pro-tested delayed funds saying some of them had starved for weeks over lack of funds.
Ringera also raised questions on amending Section 6 (c) of the HELB Act, which provides that the board sets criteria and conditions governing granting of loans including the rate of interest and recovery of loans.
The proposed amendment is to delete the words ‘rate of interest’ and if adopted it will require the board to set criteria and conditions governing granting of loans including recovery.
“In essence, the power to set interest rate will be taken away from Helb. It is not clear to whom the power will be vested on and how it will be exercised,” Ringera explained.
He stated that subjecting applicable interest rate approval to a third party creates a risk of reducing Helb’s revenue where the interest is varied downwards.
“Previously, there were attempts to reduce the under-graduate interest rate from the current 4 per cent to 2 per cent or no interest at all,” he explained.
As at last month, there were 563,283 mature accounts worth Sh69.3 billion while Sh46.8 billion held by 506,668 loanees had not matures for repayment