The Higher Education Loans Board (Helb) told Business Daily that it had now paid every student whose payment was due.
This comes as a relief for the thousands of freshmen who joined public universities in September, the majority of who are from poor households.
The agency said it required Sh3 billion from Treasury to process loan applications for the university and college students.
More than 75,000 university freshmen have finally received their first disbursements of State loans, ending months of pain that had met them at the beginning of their studies.
The Higher Education Loans Board (Helb) told Business Daily that it had now paid every student whose payment was due.
This comes as a relief for the thousands of freshmen who joined public universities in September, the majority of who are from poor households.
“We are now left with Universities and Colleges that are opening in April from their long breaks,” Helb chief executive Charles Ringera said.
At the beginning of February, more than 75,000 university freshmen were yet to get State funding to pay for their tuition and upkeep following cash flow challenges at the Helb.
The agency said it required Sh3 billion from Treasury to process loan applications for the university and college students.
Inadequate allocation and delayed release of cash by the Treasury had triggered the cash crunch at the Helb 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.
The delayed disbursement meant that the first-year students sought alternative means of paying for their tuition, accommodation and upkeep.
Helb funds needy students to the tune of between Sh35,000 and Sh60,000 per year, based on their economic background. The average allocation has however dropped from Sh43,000 to the current Sh37,000.
Of the total loan disbursed, Sh8,000 is sent directly to the university as tuition fees and the balance to the beneficiary’s bank account in two equal tranches covering the first and second semesters.
Loan defaulters have weakened Helb’s ability to support the university and technical college students, prompting allocation cuts and increased reliance on the Treasury.
The latest data from Helb shows loan accounts in default increased from the 106,443 recorded in December 2020, with unpaid loans standing at Sh10.9 billion.
This highlights the struggle faced by beneficiaries who were making repayments on the strength of their payslips or cash flows from businesses for those in self-employment.
