Varsity freshers set to wait longer for Helb loans

University freshmen will not get the much-awaited financial support from the government till January next year, the Higher Education Loans Board (Helb) said Monday.

“We are glad to inform all applicants that the process of registration and verification of the forms has just started following the passing of the submission deadline,” Helb said in a notice to first year loan applicants.

“The registration and verification process is anticipated to take the next 21 days. We will communicate to the students/applicants when the allocation process will commence. We urge you to be patient as this process goes on,” the State-owned agency said.

This is the second time that Helb is suspending disbursement of the funds to the first year students who joined the universities in September and had been promised delivery of the funds in November.

Most of the freshmen have since been forced to rely on parents and sponsors to pay for tuition, accommodation and personal expenses.

Thousands of the students have been forced to live outside the campuses in squalid conditions or in serious hardships.

The latest delay in disbursement of loans is likely to fuel a new wave of student unrest in Kenya’s public universities, the earlier delay having sparked a wave of riots two months ago.

Helb said it was forced to extend the application period to December 1, 2014 from end of October due to the large number of students who applied for funding and that it did not want to lock out any needy applicant.

READ: Varsities in crisis as freshers report without Helb loans

The agency further argues that the varying opening dates for Kenya’s 67 universities has resulted in a massive cash flow problem that has made it difficult to plan disbursements at different times of the year. 

The news is likely to rub students the wrong way given that learners in at least seven out of 22 public universities went on the rampage last month.

The list of universities that experienced student unrest includes the University of Nairobi, Kenyatta University, Jomo Kenyatta University of Agriculture and Technology (JKUAT), Masinde Muliro University of Science and Technology, Technical University of Mombasa, Dedan Kimathi, Meru and Karatina.

The wave of student unrest forced Education secretary Jacob Kaimenyi to summon a crisis meeting on November 5 where he issued a stern warning to Helb and university managers to sort out the delay in disbursement of student loans.

The affected freshmen reported to the universities between August and September and have already spent a painful semester without the much-needed funding while others were forced to defer their studies.

The loan applicants sat their Kenya Certificate of Secondary Education (KCSE) exams in 2013 and were admitted under the State’s accelerated intake programme, severely straining Helb’s resources. Ordinarily, the students should have waited a year and reported next year.

Helb chief executive Charles Ringera said the total applications grew by a third this year to about 72,000 compared to 53,000 made last year.
This includes about 56,000 government-sponsored freshmen, 11,000 new students admitted to technical and vocational education and training (TVET) institutions.

The balance is made up of first-year students in self-sponsored programmes (commonly known as the ‘parallel’) in public universities as well as those attending private chartered universities.

Mr Ringera said the agency had set aside Sh2.1 billion to fund the first-time applicants, and said this would be enough to finance about 68,000 students given that not all applications will be successful.

“There has been an unprecedented number of applications that forced us to push the deadline to December because we didn’t want to lock anyone out,” Mr Ringera said.

This year’s admissions to public universities — under the Kenya Universities and Colleges Central Placement Service (KUCCPS) – rose to 56,938 students from the 53,010 in 2013.

“There is need to align opening dates and the admission cycle with our operations,” said Mr Ringera, arguing that the agency makes monthly recoveries and needs to plan ahead.

“The sudden opening of various universities at around the same time without prior consultation obviously distorts any prudent cash flow planning.”

Helb said the fact that most freshers didn’t have requisite documents like admission letters from the newly constituted KUCCPS had forced it to extend the application deadline.

READ: Helb to raise varsity loans ceiling in World Bank deal

A large number of students didn’t have national identity cards which is a prerequisite for any application for funds and thus had to wait for them to be issued.

“We will send the confirmation list to respective deans of students in the third week of this month and disburse the funds later,” he said, meaning funds will most likely be available in the freshers’ bank accounts in January.

Treasury secretary Henry Rotich allocated Helb Sh4 billion in this year’s budget and the agency made recoveries worth Sh3.3 billion last year, making a total of Sh7.3 billion or just half the Sh14.3 billion it needs to meet total demand.

“These challenges are bound to continue unless resources are matched with the increase in student intake. The board is, however, doing its best to ensure that we adequately meet the ever rising student demands,” Mr Ringera said.

Helb, which finances about 95 per cent of State-sponsored university students, says the accelerated intake plan had disrupted and overstretched its budget, leaving it with a funding gap.

This has forced Helb to devise new strategies to bolster its loan recovery efforts to boost its fund by tracing past loanees through employers and statutory bodies such as the Kenya Revenue Authority (KRA), the National Hospital Insurance Fund (NHIF), and the National Social Security Fund (NSSF).

In the year ended June, Helb disbursed a total of Sh6.2 billion to 144,580 undergraduate students and another Sh153 million as bursaries to graduate and TVET students.

There are about 75,498 loan defaulters who owed the agency Sh8.3 billion as at June this year.

Helb said the Sh13 billion disbursed to 144,040 loanees had not matured while 98,676 beneficiaries are currently servicing loans amounting to Sh14.4 billion, translating to a performance rate of 60.7 per cent.

Since 1995, Helb has disbursed Sh45.1 billion to 413,181 students and the need for student financing has been growing over time.