Some 34,531 students were denied State loans last year after the Higher Education Loans Board (Helb) cut funding by Sh1 billion, setting up the learners for a tough life.
Official data shows 341,606 students were awarded loans compared to 376,137 applications that the Helb received in the year ending June 2021.
Loans awarded to successful loan applicants decreased by 6.6 percent in the review period to Sh14.2 billion from Sh15.2 billion the previous year — the first dip in four years.
The majority of loan applicants come from poor households and require financial support from Helb to pay for their tuition and upkeep.
Helb executives say inadequate allocation and delayed release of cash by the Treasury had triggered the cash crunch amid rising defaults from former university students in the wake of the Covid-19 pandemic that triggered layoffs, business closures and a freeze in hiring.
“This is linked to reduced activities in the education sector during the review period,” Kenya National Bureau of Statistics (KNBS) director-general Macdonald Obudho said on Thursday.
The data shows 55 percent or 19,259 students that missed out on the State loans were from public universities. Of the remaining lot, 6,361 were from private universities while 8,911 were students from TVETs.
The majority of loan applicants come from poor households and require financial support from Helb to pay for their tuition and upkeep
Over the recent past, the Helb has grappled with inadequate allocation and delayed release of cash by the Treasury amid rising defaults from former university students.
Latest data from the Helb shows 109,661 beneficiaries have defaulted their loan repayments in the wake of layoffs and a freeze in hiring, denying the agency cash flow to support freshmen and continuing learners.
In a move to encourage loanees to honour their obligation, the agency has extended by another two months a penalty waiver.
The 100 percent penalty waiver dubbed KamilishaMalipoYaHelb, which was initially scheduled to close on April 30 has been extended to June 30. It seeks to encourage those that have not started repaying to do so.
“We acknowledge that unemployment and underemployment as well as a challenging environment for loanees to start and run a business, has affected Helb loan repayment,” said Helb chief executive Charles Ringera in a statement announcing extension of the penalty waiver.