The government will oust the Kenya Federation of Employers (FKE) and bankers from the board of the Higher Education Loans Board (Helb) if a Bill before Parliament becomes law.
The review of the Helb Act will see FKE, Kenya Bankers Association (KBA), representatives of private universities and vice-chancellors of public universities lose the right to sit on the board of the student loans agency.
This will cut the board to eight from the current 13 members with the CEOs of the University Funding Board, Technical and Vocational Education and Kenya Universities and Colleges Central Placement Service (KUCCPS) being new additions.
The chairman of Helb will also be appointed by the Education Cabinet Secretary and not the President in changes that will remove the private sector lobby groups from the loans agency.
“It is ill-advised to remove the stakeholders and leave only government institutions to run public sector bodies as government will be talking to itself,” said FKE executive director Jacqueline Mugo. She said the changes will ease the linkage between industry and Helb, which also relies on the goodwill of employers to recover students’ loans from the staff.
The student financier relies on loan recoveries and government capitation for funding. It recovered Sh4.1 Billion last financial year, ending June, up from Sh3.9 Billion a year earlier. Some 85,000 loan defaulters owe the loans board Sh9.6 Billion.
Helb has suffered incessant funding shortfalls due to beneficiaries defaulting on repayment in what has worsened the plight of learners from poor backgrounds.
The KBA was expected to offer banking sector insights to Helb, especially on lending terms and recovery of loans.
The inclusion of KUCCPS which places students in universities and colleges will offer Helb trends on admissions.
Helb has been developing budgets without solid knowledge on the number of students expected to be admitted to colleges and universities, which depend on cut-off points.
The University Funding Board is a State agency mandated to advice on the institutions’ funding including student fees and State allocation.
The State is also on course to oust FKE from boards of National Hospital Insurance Fund (NHIF) and the National Social Security Fund.