News and Analysis
April 2, 2025
Higher Education Loans Board (HELB) CEO Geoffrey Monari has revealed that 35.2 percent of loan beneficiaries have defaulted on their payments.
Speaking during an interview on Spice FM on Tuesday, April 1, the CEO attributed the defaults to the high unemployment rate and low income levels for graduates who leave campus.
On unemployment, the CEO revealed that the board conducted a study and established that graduates take approximately five years before getting meaningful employment.
In turn, this makes it difficult for the beneficiaries to meet their repayment obligations.
On the other hand, Monari detailed that some of the graduates were earning as low as Ksh6,000, making it difficult for them to make repayments while meeting their basic needs at the same time.
"Currently, we are looking at 64.8 percent of those who should be paying. 35.2 percent are not paying," he stated.
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"There are economic challenges and there is also unemployment. There are graduates who are earning as little as Ksh6,000. We have done a study and an average graduate now takes five years to get gainful employment."
Apart from government funding, HELB relies on loan repayments to fund other loan applicants. However, with the high defaults, the board faces difficulties in sustaining the student financing.
HELB Loan Defaults in Numbers
By the end of June 2023, the board indicated that the principal loan amounting to Ksh126.3 billion had matured. The loan had been disbursed to 997,761 beneficiaries.
Out of the Ksh126.3 billion, defaults totaled to Ksh20.1 billion. Owing to the high defaults, the board has, on numerous occasions, been forced to take initiatives to recover the outstanding loans through waivers.
For instance, on March 24, HELB announced an 80 percent waiver on penalties for those who had defaulted in the payments.
"Settle your HELB Loan in a lump sum and enjoy an 80 per cent waiver on accrued penalties. Simple, rewarding, and just a call, DM, or email away!" read the notice in part.
Delays in loan repayments attract a penalty of not less than Ksh5,000 for each month defaulted. This has seen the Board collect millions through the imposition of penalties.
In its financial report in 2023, HELB revealed it collected Ksh538 million in penalties for the 2022/2023 financial year. In the 2021/2022 financial year, HELB collected Ksh232 million for the penalties.
As detailed in the HELB Act, graduates are usually given a one-year grace period before they are required to begin repaying their loans.
“HELB shall offer one-year grace period upon completion of studies to Undergraduate, TVET and AfyaElimu loans, one-month grace period upon disbursement for Continuing Education loans, and no loan repayment penalties shall be charged during the grace period,” the Board explained.
“Loan repayment period shall be guided as follows; TVET and Undergraduate Loans shall be 120 months upon maturity, Continuing Education Loan 48 Months upon maturity, and Partner Funds Loans Determined by partner MoU and service contracts.”
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