High Education Loans Board (HELB) beneficiaries may soon find some respite from their mounting debt courtesy of potential upcoming reforms presented in an Amendment Bill
The bill which will have its first reading in Parliament on Wednesday, July 26 aims to alleviate the financial burden faced by young job seekers amid challenging economic times.
She proposes a significant alteration to the loan repayment process. If passed, the Bill will delay loan repayment until after a graduate finds gainful employment or establishes financial security.
Students who receive a loan and subsequently find gainful employment will have their interest rate lowered to 3%.
The current interest rate for undergraduates, certificate and diploma students is 4% per year. Repayment of student loans normally begins one year after the student graduates, though students have the option to make payments both during and after their time in school.
The Bill sponsored by Joyce Kamene, the Member of Parliament for Machakos specifically stipulates that the youth and individuals with disabilities shall not be obligated to repay their loans until they secure their first employment after graduation.
The bill further suggests that loan default penalties won’t be levied until the borrower has found gainful employment or has been out of school for five years.
A fine of not less than Ksh5,000 for each delayed loan deduction may be imposed on anyone found guilty of violating the Act’s requirements.
Notably, Article 109(5) of the Constitution specifies that the Bill shall not impact the powers and functions of county governments.
HELB recently called upon students intending to join university in September 2023 to apply for loan allocation within the stipulated timeframe. Due to initial budget concerns, the board had to withdraw the initial allocation for the first year students .