Graduates at the Helb offices in Nairobi where they had gone to repay their loans last week. Helb says disbursement of new loans will be delayed for one month. FILE
What you need to know:
Helb said new loans will only be disbursed after the Treasury releases 2013 Budget money.
This means about half of the 4,832 students who joined the University of Nairobi last month have to wait longer to access money.
Helb said it was caught off guard by the university’s decision to bring forward the admission date from September.
The full impact of the double-intake admissions policy in Kenya’s public universities became clear last Friday after the higher education financier said any new disbursement of loans has to await release of budget funds for the next financial year by the Treasury.
The announcement by the Higher Education Loans Board (Helb) means about half of the 4,832 students who joined the University of Nairobi (UoN) last month have to wait longer to access money they need to finance tuition, accommodation and personal expenses.
Helb, which had earlier committed to disburse the loans by the end of last week, said it was caught off guard by the university’s decision to bring forward the admission date from September.
“We are still waiting for the Treasury to release funds,” said Helb chief executive Charles Ringera in an interview with the Business Daily. 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.
“This cohort of students was expected to report on campus in September 2013, but the opening date was brought forward to May 20, 2013,” Helb said in an earlier statement.
Introduced in 2011, the double- intake policy was to deepen access to higher education by delinking admissions from bed space and allowing learners to attend lectures in shifts. This was, however, not matched with increased financing, leaving Helb to twice return to the Treasury for supplementary funds after emptying its coffers.
The majority of the freshmen who spoke to the Business Daily said they were yet to receive their loans, but others indicated their money had been sent to their bank accounts.
“I submitted my form in January but I have no notification yet,” said Kipkorir Langat, a first year student at UoN.
Winnie Mbula, a Bachelor of Commerce student on Lower Kabete campus, said she had not received the money despite having submitted her application form to Helb last year.
“I am depending on pocket money from my mother for my day-to-day spending,” Ms Mbula said.
In the current year, Helb has so far disbursed a total of Sh5.1 billion to 118,483 undergraduate students and a further Sh100 million in bursaries to learners in technical, industrial, vocational and entrepreneurship training institutions.
In 2008, Helb extended its loan programme to needy students in self-sponsored programmes (commonly known as the ‘parallel’) in public universities as well as those attending private chartered universities. Previously, the loan facility was only available to students admitted to public universities through the Joint Admissions Board (JAB).
The financing gap is set to widen further in the next financial year beginning July after the Education ministry almost doubled the minimum loan to Sh60,000 annually.
The outgoing Higher Education PS Crispus Kiamba presented the new loan amounts to the National Assembly’s departmental committee on education, research and technology on Wednesday.
This translates to a minimum of Sh240,000 annually for a four-year course. Currently, undergraduates get between Sh35,000 and Sh60,000 annually from Helb alongside a bursary of up to Sh8,000.
Of the total loan disbursed, Sh8,000 is sent directly to the university towards tuition fees and the balance sent to the beneficiary’s bank account in two equal tranches in the first and second semester.
Failure to disburse the loans and bursaries in time has left the freshmen in a financial fix. Most of them have been locked out of classes as course registration can only be undertaken after full payment of fees.
The recent upgrading of 15 university colleges into fully fledged universities has increased higher education opportunities for Kenyans but piled pressure on the loans agency. The total number of public universities in Kenya has since trebled to 22 besides the nine constituent colleges.
As a result, selection for next year’s university placements will grow by a quarter to a record 53,000 students compared to 24,221 in 2010.
In addition, there are 31 private universities in Kenya – 17 fully accredited and chartered, 12 operating with Letters of Interim Authority (LIA) and two registered institutions.
Last Thursday, the agency extended its blanket amnesty by a month, meaning fines will not be charged on defaulters who come forth to start repaying their loans. Beneficiaries of Helb are required to begin repayment of their loans a year after completing studies.
Helb’s average monthly collection stands at Sh220 million, bringing its annual loan recoveries to Sh2.5 billion for the year ended June 2012.
The penalty waiver has seen last month’s recoveries grow by 18 per cent to Sh260 million. Repayments now account for half of its income sources with the remaining 50 per cent coming from the Treasury’s grants.
The revolving fund was established in 1995 and has so far disbursed Sh40.2 billion to 375,783 students. Only a fifth of the loan recipients or 68,522 graduates have fully repaid their loans worth Sh6 billion.
Some Sh12.1 billion disbursed to 133,569 loanees has not matured while 98,194 beneficiaries are currently servicing loans amounting to Sh13.6 billion, translating to a performance rate of 62 per cent.
