Uhuru rescues HELB beneficiaries in letter to Parliament
President Uhuru Kenyatta has come to the rescue of Higher Educations Loans Board (HELB) fund recipients after they refused to give his assent to the Higher Education Loans Bill (2020).
Uhuru, who refused to sign the bill at the State House in Nairobi on Tuesday June 21, sent it back to parliament with a memorandum on the bill’s strict clauses that would give Helb power over loans.
In the document seen by Kenyans.co.ke, the bill amended section 15 of the Helb Act to allow the board to call the loan before the one-year grace period. With this in mind, he called on the beneficiaries to communicate their contact details to the organization.
President Uhuru Kenyatta signs agreements at State House.
“A loanee is required, within one year of completing his studies or such time as the Council decides to recall his loan, whichever comes first, to advise Helb of his contact address,” reads in part. in the bill.
The bill pushed students with outstanding loans to start paying them back within a year of finishing their studies – including accrued interest on disbursements.
Graduates who get jobs within the same timeframe would additionally be required to order their employers to make Helb deductions and remit them to the parastatal. Failure to do so would result in heavy fines.
“A lender who fails or neglects to meet the requirements within the specified time shall be guilty of an offense and liable to a fine of not less than Ksh 5,000 for each loan deduction which remains unpaid in accordance with sub-section 1, and such a fine shall be made to the council,” read the bill.
The culling of the bill comes as the Council said it was underfunded due to unpaid loans. On May 22, Helb CEO Charles Ringera announced that 75,000 students who rely heavily on state funding may miss the funds.
Ringera explained that 107,000 of the beneficiaries had defaulted on loans totaling almost Ksh 10 billion, including those who left the country for better opportunities abroad. He added that the council would follow the law and impose fines on unserviced accounts.
“We have also seen a trend of migration to greener pastures, particularly in North America. 5,000 Ksh to be in default.”
To encourage credit servicing, Helb announced a 100% waiver on loans repaid in full by June 2022.
Uhuru further refused to enact the ICT Practitioners Bill. The bill, which had caused an outcry over the strict requirements, including one that required industry players to hold a bachelor’s degree and be members of a national council.
File photo of university students at birthday towers in Nairobi.