The Higher Education Loans Board's motto is ‘Empowering Dreams’. This is succinct message captured the aspirations of those who oversaw its formation in 1995.
Most young people possess valid dreams and are ever hungry for academic opportunities to help them nurture those dreams.
Helb was established through an Act of Parliament to enable brilliant students from poor backgrounds to access cheap loans for tuition fees and upkeep.
Its formation was highly appreciated as the parents and guardians were relieved of the heavy burden of paying university fees.
Before Helb, university students largely benefited from the government’s freebies they aptly named ‘Boom’. It was more or less a monetary reward to them for qualifying to join university.
Although it was quite popular, the initiative was not going to be sustainable in the long run as the number of university students went up. ‘Boom’ was replaced with loans advanced to the students through Helb.
PUNITIVE AND UNREALISTIC
Although it has largely served its purpose, helping thousands of students pay their fees, the model for repaying the loans has become too punitive and unrealistic over time.
To make the model friendlier and in response to the mounting challenges loanees have to surmount after university, I sponsored the Helb (Amendment) Bill, 2020.
The proposed law’s main purpose was to cushion graduates and persons with disabilities from high-interest rates and punitive penalties imposed by Helb.
As the youth representative in Parliament, I'm aware of the challenges youths and persons with disabilities face trying to get employed after college, most of them often searching for jobs for years without success.
Joblessness is still a huge problem in the country. The Public Service Commission, for instance, employed only 1,800 graduates in the 2019/20 financial year against 500,000 who obtained degrees that year.
For most of those who fail to be absorbed into the civil service, some reports indicate that it takes at least five years for them to get reliable jobs. This is the painful reality on the ground.
Helb normally charges four per annum for loans advanced. It also demands repayment 12 months after completion of studies whether one is employed or not.
If one fails to commence repayment once the grace period elapses, a Sh5,000 penalty is imposed on them every month. That is Sh60,000 per year.
For those who don’t get any job for five years, they will be expected to pay Sh300,000 as penalty on top of their loans. Woe unto those who don’t get any job for 10 or so years as they will have to contend with huge penalties.
Getting a job in the country has proven to be a daunting task for the thousands of graduates who leave college every year.
JOB OPPORTUNITIES
For most, they look upon the civil service for job opportunities to gain experience. But with the government closing one door after another, it is almost impossible for them to service Helb loans.
Recently, the Treasury put a temporary freeze on fresh employment in the civil service, further denting any hopes of the youth getting government jobs in the near future.
The Bill, therefore, sought to provide reprieve to those who fail to get jobs before the grace period elapses.
It was also to lower the interest rates, provide for a five-year grace period instead of the existing one year and also waive penalties.
Expecting a jobless graduate to start repaying a loan a year after graduating is unreasonable. Imposing punitive penalties of Sh60,000 per year for failing to do so is unacceptable.
Five years should be enough for a graduate to get a reliable job or set up a start-up business to be able to start servicing their loans.
Helb has been reporting an increase in the number of defaulters, most of them students unable to get any source of income for years.
By the year 2017, Helb had 85,000 defaulters owing Sh9.6 billion. That number must have risen by now.
It is understandable the student loans board must recover its loans to ensure its long-term existence and be in a better position to meet requests from needy students every year. But it must also be realistic. Defaulting is largely attributed to failure to get jobs upon completion of studies.
Repaying loans advanced by a public institution should not be an extra burden for the unemployed. Imposing penalties on jobless graduates amounts to double jeopardy. It is equal to punishing them for failing to get employment.
Helb was formed to help youths achieve their dreams. It should not be a stumbling block to those who are already on the path to achieving them.
Keter is a Member of Parliament representing the youth in the National Assembly
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