Double intake leaves varsity loans board in a financing fix
Mr Benjamin Cheboi, CEO of the Higher Education Loans Board , which is facing a Sh1.5 billion shortfall. File
Thousands of freshmen joining public universities this week will receive little or no financing from the cash-strapped Higher Education Loans Board (Helb).
The board, which finances more than 80 per cent of university students, says the double intake plan has left it with a Sh1.5 billion financing gap it cannot immediately fill because the government — its main source of funds — has no money.
Public universities have admitted 32,671 students, 12,000 more than the 20,000 admitted in last year’s intake.
Helb said it is unable to finance such a large number of students without additional funds from the government and has made a formal request to the Treasury for a Sh1.5 billion cash injection.
The Treasury says it cannot find additional money beyond what was allocated in the Budget, citing financial pressures from increased public expenditure against slow growth of tax revenues in a fragile economy.
Treasury’s ability to provide additional money for university loans is further weakened by a recent provision of an extra Sh4 billion to hire teachers — a deal that helped end a nationwide teachers’ strike. “Registration of students is ongoing, but some are yet to get loans,” said Mr Benjamin Cheboi, the Helb chief executive, adding that failure to get the extra money could scuttle the double intake plan.
Helb’s inability to finance the freshmen risks delaying registration of thousands of students and commencement of studies.
“It could also force Helb to significantly reduce the amount of money disbursed to new and continuing students,” said Mr Cheboi. The funding shortfall could also force the board to roll back its recent expansion into financing students in private universities. Mr Cheboi said the double intake needed an elaborate financing plan to succeed since the students will have to be supported for the entire four years of university education.
This year’s Joint Admissions Board’s (JAB) intake of students to public universities is the highest in history and is aimed at eliminating a two-year delay in transition to public universities.
The last time public universities had a double intake was in 1985 when the government moved to clear a backlog caused by extended closures after the 1982 attempted coup.
The current backlog has been caused by an acute shortage of accommodation in universities - hitherto a critical factor in deciding admission numbers.
JAB’s decision to admit two groups of freshmen seeks to eliminate this delay, allowing students joining under the its programme (also known as regular students) immediate entry to universities just as self-financing ones.
Success of the programme, however, depends on increased allocation of funds to the universities to expand learning facilities, hire more lecturers and prepare Helb to finance students.
Last year, public universities took in about 20,000 students who sat their Kenya Certificate of Secondary Education (KCSE) examination in 2008. This year’s planned intake of 32,671 students is drawn from the 2009 and 2010 KCSE candidates.
With a significant number of past Helb beneficiaries still not paying their loans, the institution has continued to rely on direct allocations from the Treasury every year.
Official data from the Helb shows that more than 76,000 past beneficiaries of the loans have defaulted, leaving the board with a Sh7.9 billion debt.
Helb recovers about Sh2 billion annually against a demand of more than Sh3 billion from undergraduate and postgraduate students.
Last year, Helb recovered Sh2.3 billion and disbursed Sh3.5 billion in fresh loans, reflecting a funding gap of Sh1.2 billion that the government filled.
Treasury allocated Sh1.6 billion and Sh2.4 billion in grants to the board in 2009 and 2010 respectively.
Helb has recently introduced a punitive Sh5,000 monthly fine on any past beneficiary who fails to service their loans, a move it hopes will improve repayment rates and increase the amount available for new loans.
Should the funding shortfall persist, students will be the hardest hit.
Undergraduates 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.
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.
A reduction in loan sizes, therefore, has can cause distress to such students at a time when the cost of living has risen sharply. Month-on-month inflation rose from less than four per cent in the fourth quarter of last year to peak at 17.32 per cent in September.
The cash crunch could also curtail Helb’s lending to students outside the JAB programme and slow down the attainment of higher education among the youth. The ambitious double-intake plan is also expected to strain universities’ physical and human resources, and most have asked for more grants from the government to cope with the extra demand.
Maseno University has, for instance, adjusted its academic calendar to allow the various groups to be on campus at different times to avoid congesting the facilities. The 2009 KCSE candidates, for instance, will have their first semester between this month and December while the 2010 class will have their first semester between January and April.
“While we can handle demand for physical infrastructure, the increased intake will put a strain on our teaching staff,” said Dominic Makawiti, the Vice Chancellor at Maseno University.
“We need more funding to hire more lecturers and pay them better for the increased workload.”
There is also concern that the double intake plan could dilute the quality of education and fuel the expansion of constituent colleges in a bid to raise more revenue from parallel degree programmes. Though the number of lecturers has been growing, it lags far behind the student enrolment rate, leading to a high student to lecturer ratio.
University Academic Staff Union (UASU) data indicates that there are about 10,000 lecturers in both public and private universities, up from 7,000 four years ago. Over the same period, student population grew from 90,000 to 142,000 --a 57 per cent jump. Meanwhile, the government has held its funding to public universities this year at last year’s level.
