The Higher Education Loans Board (HELB) has revealed that more than 95,000 university and college students will miss out on education loans due to budgetary constraints.
Due to budget cuts, even the few who will receive funds from Higher Education Loans Board (HELB) will have to do with reduced amounts of Sh. 38,000 which is Sh. 7,000 less than the expected Sh. 45,000.
“We have improved our average at the university level to about Sh. 45,000 and this year because of the supplementary budget cuts and a loan recovery dip of Sh. 1 billion, the average per student had to reduce,” said HELB chief executive Charles Ringera.
This revelation is a dent in the excitement of thousands of university and college students who mainly depend on loans to fund their studies, coming at a time when the economy is suffering from the adverse effects of the novel Coronavirus pandemic. Millions of Kenyans are also suffering from the economic recession due to coronavirus.
Ringera said that HELB, which gives loans to students learning in universities and Technical and Vocational Education and Training (TVET) institutions, is struggling due to an Sh. 5 billion deficit that has accumulated from the 2019-2020 and 2020-2021 financial year which has affected patterns of funding.
“We have lost about Sh. 1 billion due to the COVID-19 impact on loan recoveries. In total this year we are looking to cut off about Sh. 3.2 billion which we will not be able to get for purposes of the funding student budget,” said Ringera.
According to Ringera, the budget was supposed to be an estimated Sh. 15.5 billion but due to funding cuts by the government, the board had to reduce the budget by a figure of Sh. 3.2 Billion.
Ringera was speaking while in Nairobi where USAID handed over the Afya Elimu Fund (AEF) to HELB said that the board started the current financial year having a deficit of Sh. 2.8 billion, hence causing the gap in funding.
HELB is intending to fund around 450,000 students in TVET and universities at a total cost of around Sh. 12.8 billion, which is around Sh. 3.2 billion less the amount the agency planned to spend.
“That means that about 95,000 students will go unfunded this year. They have just resumed their classes and we are worried about how we will be able to manage that situation but that is how it is. There are no revenues flowing into the country, people are unemployed so they cannot be able to pay their loans so we have to use what we have,” stated Ringera.
According to Ringera, TVET students will get Sh. 40,000 from HELB and capitation of Sh. 30,000 which brings the total to a figure of Sh. 70,000 out of which Sh. 13,600 is for upkeep while 56,400 will be for tuition.
“We have targeted 110,000 students from TVET institutions at a total cost of around Sh. 4 billion but now we will have to work with about 80,000,” said Ringera.
The HELB boss noted that 143,000 students qualified to join university this year but not all of them will need the HELB loan.
Normally, about 80 percent of them need the HELB loan to facilitate their studies.
“We will have to look at the number of applications received, how much money we have and appropriate it accordingly to the number that is very needy but definitely we will not be able to fund the entire 80 percent,” explained Ringera.