Nominated Member of Parliament Gideon Keter has proposed that the interest charged on Higher Education Loans Board (Helb) loans reduced from four percent to two percent.
The proposal has however received strong opposition from helb arguing that over 47,000 students will miss the privilege if the proposal is implemented. Currently, HELB loan defaulters are charged with four percent interest annually. The penalty generates Sh3.74 billion for the board every year.
HELB has stated that the ministry of finance will have to look for ways to cover up the gap that will emerge if the interest is slashed by half.
The national treasury will, therefore, be required to inject Sh1.87 billion shillings into the board’s budget every year if the bill will go through.
A proposal in the Helb Amendment Bill (2018), states that the interest to loans given to students be reduced by half from the current four percent.
The loans board has noted that about Sh1,00,907 Kenyans have benefited from helb loans where Sh113 billion shillings have been spent on students.
According to HELB, 492,227 students who have completed their studies owe the board Sh58.5 billion. Another 184,046 beneficiaries holding Sh27.9 billion are already paying their loans and they are free from the interest penalties.