Pain for freshers as Helb delays cash disbursement
Students being served at the Higher Education Loans Board (Helb) offices last year. Helb has extended a one-month loan repayment amnesty and an 80 per cent waiver on all penalties for loans paid in a lump sum. FILE PHOTO | NATION MEDIA GROUP
What you need to know:
The Higher Education Loans Board (Helb) has announced it will not send them any money until November.
This may force some students to postpone their studies or forced them to seek cheap accommodation in unsafe informal settlements.
First-year students who have reported to public universities should brace themselves for a life of frugality after the Higher Education Loans Board (Helb) announced it will not send them any money until November.
It is feared the wait for two months or longer may force some students to postpone their studies or to seek cheap accommodation in unsafe informal settlements.
Helb said it will close loan applications for freshers at the end of this month and, thereafter, take at least three weeks to process their requests. This means the earliest the body can disburse funds is November.
“Applications are still going on up to September 30, 2015. Thereafter, we take about three weeks to process,” Mr Ringera told the Business Daily.
For the second year in a row, Helb is delaying cash to newly students. Chief executive Charles Ringera said the loan application and disbursement cycle was “mutually agreed upon” by the agency, the deans of public universities and the central admissions body.
The higher education financier once more attributed the delay to the varying opening dates for the public-funded universities, saying this presents a logistical nightmare for the State agency.
“With varying opening dates, it becomes difficult to adopt an earlier date than the latest admission date,” he said.
But the Business Daily has determined that all but one of the 22 public universities have already admitted the 67,124 new students selected to join the institutions of higher learning.
For example, South Eastern Kenya University admitted its batch of freshers on August 24. A majority of institutions such as Kenyatta, Technical University of Mombasa, Maseno, Moi and Jomo Kenyatta University of Agriculture and Technology welcomed their first years between the last day of August and September 8.
The disheartening announcement to government-sponsored first-year students means that the freshers will have to pay for tuition and accommodation, among other expenses, from their own pockets as they await the Helb funding.
The loan delay will even be worse for freshmen who missed university housing as they have to source for extra funds to rent houses or hostels in the surrounding neighbourhoods.
University hostel charges range from Sh3,000 per semester while private hostels charge an average of Sh7,000 per month.
It is estimated that eight of every 10 university students admitted under what is popularly is known as “JAB” apply for financial aid from Helb.
The Kenya Universities and Colleges Central Placement Service last year replaced the Joint Admissions Board (JAB) as the entity which selects State-funded students to public universities.
Public universities have already put out stern notices directing students to pay fees in full before registering for courses, attending lectures or taking up hostel rooms; further compounding the matter for bright but needy students who depend entirely on Helb for their schooling.
“No student will be allowed to attend classes before paying requisite fees in full and/or clearing any arrears,” Moi University said in a notice to first-year students.
Hellen Muthoni, who has been admitted to Moi University to pursue a degree in special education, said she is banking on Helb because she is having difficulties meeting her daily upkeep expenses.
“My parents paid the school fees, but food and pocket money for my personal use is a challenge,” said the student from Taita Taveta County.
Freshmen at State-funded universities pay about Sh30,000 in the first year for tuition, medical, registration, activity and computer lab fees. However, the amount does not include meals, housing and personal upkeep.
At JKUAT, freshers were instructed to pay school fees in full and “bring with them the pay-in slips for receipting on registration day.”
Kenyatta University has imposed a fee payment deadline of October 9 failure to which the freshers will be locked out of classes and won’t be allowed to sit for examinations.
Waiting for nearly two months is not the only bad news freshers have to endure. The loans agency in January cut the highest allocation per student to Sh50,000 from Sh60,000 per academic year for freshmen who joined last year.
Half of all the new students who have already joined public universities will not get loans due to a funding crisis, Helb announced in July.
The agency says it needs an extra Sh2 billion after the Treasury secretary Henry Rotich set aside Sh7.5 billion for the year that began in July to cater for 135,000 continuing students and the freshers.
Continuing students need Sh6 billion in the current financial year while freshers require Sh2.7 billion, Ringera said.
The affected students sat for their Kenya Certificate of Secondary Education exams in 2014 and have been admitted under an accelerated intake programme — where learners join universities nine months after leaving high school. Previously, students waited nearly two years.
The number of government-sponsored freshers has nearly tripled in the last five years from 24,221 learners in 2010 to this year’s 67,124.
Similarly, the number of public universities has grown threefold to 22 from the initial seven institutions in 2007. There are nine public university constituent colleges.
Mr Ringera said this growth in students and universities had severely strained Helb’s resources. The agency’s loan recoveries plateaued at Sh3.36 billion in the period ended June 2015, compared to Sh3.3 billion a year earlier.
The delays in disbursing student loans has seen a return of harambees — fundraisers to raise cash for needy but bright government-sponsored students. Some are also turning to CDF bursaries as well as scholarships from corporates, community organisations and religious bodies.
Helb is now devising new strategies to trace past loanees to bolster its loan recovery efforts and boost its kitty. In July, it hired representatives to track down loan defaulters in the diaspora.
But Helb is likely to remain in dire straits if a populist amendment Bill passed by Parliament and currently awaiting presidential assent becomes the law. The proposed law shields unemployed past beneficiaries from paying interest on their loans until they secure jobs.
Mr Ringera said Helb stands to lose about Sh4 billion if the Bill, sponsored by Kiharu MP Irungu Kangata, becomes law.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
