Markets & Finance

Loans hitch locks out University of Nairobi students

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A student fills in registration forms at the University of Nairobi on Monday. Many of the freshmen had difficulties, having failed to get Helb funds. Photo/SALATON NJAU

Thousands of freshmen at the University of Nairobi were on Monday unable to register for their courses after they reported to campus without critical financial assistance from the Higher Education Loans Board (Helb).

The students, the majority of who are banking on State loans to finance their university education, had a difficult time getting registration having failed to raise the necessary fees and the money required to pay for accommodation at the university’s halls of residence.

Most students said Helb had informed them that it was unable to disburse any loans until the beginning of the next financial year in July when it expects to get funding from the Treasury.

The agency said it had disbursed all the money in support of the large number of applications it had received since the government adopted the double intake policy in 2011.

Failure to get Helb support means thousands of students, who are fully dependent on government loans, will stay out of campus for at least one month before they can join their self-financing counterparts in the lecture halls.

Undergraduate students get between Sh35,000 and Sh60,000 annually from Helb alongside a bursary of up to Sh8,000. This translates to a minimum of Sh140,000 and maximum of Sh240,000 for a four-year course.

Of the total loan disbursed, Sh8,000 is sent directly to the university as direct tuition fees and the balance sent to the beneficiary’s bank account in two equal tranches during the first and second semesters.

The admissions crisis was worse for half of the students who missed university housing and must find extra funds to rent rooms or hostels outside campus.

Most universities charge an average of Sh3,000 per semester while private hostels charge as much as Sh7,000 per month or Sh21,000 a semester.

The double intake was meant to delink admissions from bed space and allow the learners to study in shifts. It has, however, turned out to be a major headache for varsity dons and administrators of the revolving fund because it was not backed by an increase in the Treasury’s allocation to Helb.

(Read: Double intake leaves varsity loans board in a financing fix)

The revolving fund has so far disbursed a total of Sh5.1 billion in bursaries to 118,483 undergraduate students and an additional Sh100 million  to learners in Technical, Industrial, Vocational and Entrepreneurship Training (TIVET) institutions.

The agency said it had exhausted all the money it had for disbursement to students this year, forcing it to wait for the next round of funding from the Treasury.

The majority of applicants for Helb loans are poor students who depend on the money to buy food, stationery and pay rent during their stay on campus. They also use the money for research.

Failure to access the loans and bursaries in time therefore leaves the students in a financial fix and most will be unable to begin their studies as registration for courses is only possible after full payment of fees.

The University of Nairobi’s freshmen are required to pay about Sh30,000 for the year for tuition besides medical, registration, activity and computer lab fees.

“I was actually banking on the loan for my pocket money as my parents have exhausted all their funds in paying for my fees,” said Benson Odhiambo, a first year student at UoN.

Agnes Nyaboke, a parent who had brought her son for admission, lamented that the delay in loan disbursements may force some learners to drop out of college with disastrous impact on their future.

“There are those who depend entirely on Helb for their university education. This is unfortunate,” she said.

Kenya’s oldest university distanced itself from the blame, saying it had submitted its list of admitted students to Helb last year.

“We submitted our list last year, complete with the courses of study and the opening date,” said UoN acting academic registrar Ben Waweru.

This is the first time UoN is accelerating its admissions, having defied the double intake policy on the basis that its resources would be strained.

Kenyatta University was the first to enrol two batches of freshmen in 2011 admitting the 2010 and 2009 KCSE graduates in the same year.

Lack of adequate student accommodation has seen UoN trail Kenyatta and Moi universities in admitting the 2012 KCSE group that is expected to start their courses next year.

“The slow growth in our facilities is partly to blame for the relatively slow uptake of new students,” Mr Waweru told the Business Daily.

UoN will enrol 5,387 students in January next year behind Moi University (5,861) and Kenyatta University (5,566) (see article).

The board estimates that student financing needs will triple to Sh14.8 billion next year, forcing it to step up its loan recovery effort with hefty fines on defaulters.

The recent upgrade of university colleges into fully fledged universities will see record 53,000 freshmen join Kenya’s 22 public universities next year compared to 42,000 this year.

The fund levies a Sh5,000 monthly penalty for graduates not servicing their loans and has granted a one-month waiver to make it easy for the defaulters to pay up and to maximise its loan recoveries.

The defaulting loanees will enjoy the waiver if they pay the outstanding dues in lump sum between May 6 and June 6, 2013.

Beneficiaries of Helb are required to begin repayment of loans a year after completing studies. Efforts are under way to trace about 75,498 defaulters who owe the agency some Sh8.3 billion.

Helb is partnering with government agencies such as the Kenya Revenue Authority (KRA), National Hospital Insurance Fund (NHIF), and National Social Security Fund (NSSF) for access to information that will enable it to find the defaulters.

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