Freshers miss cash again as State holds Sh2.4bn Helb funds

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The freshmen had been promised the cash by November, contrary to the normal arrangement where Helb has been channelling funds to students’ bank accounts in the first month of their arrival at university.
Helb had in July indicated that half of the 67,124 new students who joined public universities from September would miss out on the critical funding due to a Sh2 billion funding shortfall.

First year university students will enter the second semester Monday without funding from the Higher Education Loans Board (Helb) after the Treasury failed to release Sh2.4 billion.

The freshmen completed first semester without support from Helb, which promised to wire cash to the students’ accounts last week on the understanding that Treasury was to offer the agency cash.

“The money is still not there. I talked to the Treasury on Monday over the issue and the PS said they have prioritised it. We don’t have a date when that would be,” Helb chief executive Charles Ringera told the Business Daily in a Friday phone interview.

The first year students had been promised the cash by November, contrary to the normal arrangement where Helb has been channelling funds to students’ bank accounts in the first month of their arrival at university.

The Treasury has, in the year starting July, experienced a cash crunch due to below-target revenues, reluctance to borrow in the domestic market and high debt payments, which have stalled essential services and projects.

“We got our first tranche of capitation from the Treasury in October that catered for continuing students but the second disbursement meant for freshers was delayed,” said Mr Ringera in a December interview.

Helb intervened by asking universities to allow freshers with fees arrears to sit for their end of first semester exams on the promise of paying in January.

Helb had in July indicated that half of the 67,124 new students who joined public universities from September would miss out on the critical funding due to a Sh2 billion funding shortfall.

This came after the Treasury rejected the agency’s request for an additional Sh2 billion besides the Sh7.5 billion it was allocated for the fiscal year that started in July.

The additional funds were to be made through a supplementary budget. Continuing students need Sh6 billion in the current financial year while freshers require Sh2.7 billion.

There has been a sharp rise in enrolment of students in public universities, straining resources at Helb whose capitation has been growing at a slower pace.

READ: First year students yet to receive Helb loans

University intake increased to 67,124 last year from about 57,000 in 2014, pushing up the demand for loans.

Enrolment in public universities has increased from 195,528 in 2012 and 289,733 in 2013 to 363,334 in 2014 while private varsities increased from 71,646 to 80,448.

This has been buoyed by the approval of new degree courses and the setting up of new campuses, making it difficult for Helb to meet the needs of continuing students because allocation from the Treasury has not kept pace with the intake rise.

Most of the students come from poor backgrounds and require financial assistance to meet their tuition fees and upkeep. The underfunding has prompted protests from students in recent years.

The loans agency in January last year cut the highest allocation per student to Sh50,000 from Sh60,000 per academic year for freshmen who joined university in 2014.

Helb is also staring at a bigger crisis as the government pushes ahead with plans to sponsor students in private universities to ease the burden on public institutions.