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The Higher Education Loans Board (HELB) is yet to release funds to both new and continuing students in institutions of higher learning.

HELB Chief Executive Officer (CEO) Charles Ringera has however assured the Ministry of Education is following up on the disbursement, even as new year students continue with the process of applying for funding, which will close on October 7.

“We are still following up with the Ministry, which is also following up with the Treasury for release of funds and as of now we have not released any money to continuing students or the ones coming in for the first time,” said Ringera yesterday.

He made the remarks even as Higher Education Principal Secretary, Dr Beatrice Inyangala urged university students to report institutions demanding for 7 per cent payment of fees before admission.

“We have received messages from Vice Chancellors confirming that they are not demanding for the 7 per cent. So far, the information we have received is from students and the vice chancellors have categorically denied that they requested for 7 per cent,” she explained.

Going to engage

Adding: “We encourage every student who has been asked to pay the 7 per cent to come to my office with the evidence and I am going to engage with the Vice Chancellors immediately based on the facts.”

She, however, assured that the Government has released an enhanced capitation to cater for continuing students and to also allow operations to run uninterrupted.

“They requested for an enhanced three-month capitation to help them keep operational while we are processing the funds for the first years. So, we are continuously engaging Vice Chancellors and we are supporting them,” Inyangala assured.

They made the remarks when they appeared before the National Assembly committee on education to present their views on the HELB (Amendment) Bill, 2022 and HELB (Amendment) Bill, 2023, both sponsored by Machakos Women Rep, Joyce Kamene.

Non-payment of fees

The MPs had sought an explanation on why students are being turned away because of non-payment of fees despite a circular from the Ministry requiring institutions of higher learning to admit all first-year students as funding is processed.

Also during the meeting, the PS and HELB rejected Kamene’s amendment bills saying should they be passed, they will interfere with the cash flow and disbursement because it is a revolving fund.

Kamene has proposed that no interest be charged on the principal amount advanced to youths and persons with disabilities until they have secured their first employment upon completion of studies.

She also calls for repayment of loan upon securing employment or within five years after completing studies and that the maximum interest rate to be charged by HELB on the principal amount advanced to a loanee should not be more than 3 per cent per annum.

But rejecting the proposal, Ringera said that today, loan recoveries constitute 37 per cent of HELB budget, for instance this year, out of their allocation of Sh29 billion, at least Sh5 billion is supposed to come from loan repayment.

He also said lengthening the period to start paying the loan means that National Treasury must come in and cover that gap if the timelines were to be extended by five years. This, he said, will also disadvantage students joining institutions of higher learning annually funded by loan recovery component.

Similarly, Ringera explained that the interest rate on loans initially set at 4 per cent was guided by the inflation rate and if HELB goes back to 3 per cent when inflation is at 7.6 per cent, it will be a further loss. Should HELB reduce the interest rate even by just 1 per cent, Ringera said they would lose about Sh1.8 billion in a year.

“We take indicators from Government bills so if we go further down, that will affect the cash flow and funding of future students. If we put the period to five years it means that when they come to pay they will have piled all this interest. We actually have a campaign to encourage them to repay loan while we are still funding them,” he explained.

Adding: “If we say within five years, everyone will go to the fifth year and that will affect our funding because that money is supposed to come and fund the next generation.”