Former Interior Cabinet Secretary Fred Matiang’i has raised concerns over Kenya’s education sector, warning that rising school closures, funding gaps, and growing student loan defaults are pushing the system into a deeper crisis.

Speaking during a rally in Mitunguu, Meru County, on Sunday, June 7, 2026, Matiang’i said the country was already struggling to sustain basic learning due to financial constraints and mismanagement of education funds.

“Saa hii nikizungumza hapa, zaidi ya shule 40 zimefungwa Kenya hii kwa sababu ya shida,” he said.

He added that headteachers are struggling to run schools due to delayed or insufficient capitation funds from the government.

“Waalimu wakuu hawapati pesa ya shule imekuwa vigumu kuendesha elimu katika nchi yetu ya Kenya,” Matiang’i stated.

The former CS said the situation is not limited to primary and secondary schools, warning that universities are also facing a severe financial strain that is affecting students directly.

Rising interest charges

Matiang’i said he recently met students from Kenya Methodist University (KeMU) and Meru University, who described increasing financial pressure, including loan burdens and interrupted studies.

“Jana usiku nilikuwa na wanafunzi wa KeMU na Meru University. Ni nduru tu watoto wanapiga,” he said.

According to him, some students have been forced to defer or abandon their studies due to the inability to pay fees, while others are being hit by rising loan interest charges.

“Wengine hawana wamehairisha course, wengine hawana pesa ya kulipa, wengine tayari wanaambiwa interest yako imeenda 300 thousand,” he said.

He questioned how ordinary families can manage such repayment demands in the current economic situation.

“Iko mtu hapa Mitunguu anaeza lipa 300,000 interest ya shule?” he posed.

His remarks come against the backdrop of worsening student loan recovery challenges at the Higher Education Loans Board (HELB), where defaults have now reached nearly Ksh40 billion.

Recent reports show that over 281,000 former students have defaulted on HELB loans, a situation linked largely to unemployment and underemployment among graduates.

Auditor General Nancy Gathungu noted in a recent audit that more than 281,459 graduates have defaulted on loans worth about Ksh39.63 billion.

“Loan repayment burden due to high unemployment and underemployment rates makes it challenging for graduates to repay their loans,” Gathungu said.

She warned that the rising defaults are threatening the sustainability of the revolving fund, which is meant to support new students entering universities and TVET institutions.

Worsening repayment crisis

Data shows that Kenya’s job market is struggling to absorb new graduates, with only a small fraction of available jobs being formal.

The economy created about 75,000 formal jobs in 2024, down from 122,900 in 2023, while most new jobs were in the informal sector.

This shift has made loan recovery harder for HELB, which relies heavily on employer-based deductions.

As a result, more than 163,000 students were locked out of HELB funding in the last financial cycle after the agency ran out of funds.

HELB has also introduced stricter enforcement measures to improve compliance.

Employers who fail to remit deductions now face fines of Ksh3,000 per employee per month, while beneficiaries in default risk penalties of up to Ksh5,000 monthly.

The board has also maintained that no loan write-offs will be granted, saying it remains committed to recovering all outstanding debts.

Matiang’i said the combination of school closures, funding shortages, and rising student debt reflects deeper structural problems in the education system.

He said the government must urgently address funding gaps and youth unemployment to prevent further collapse of learning institutions.