The government has slashed by over Sh5 billion the funds it allocates to the Higher Education Loans Board in a move that will see over 140,000 miss out of the state loans.
According to the board, over 140,000 students would miss out on the HELB loans caused by the budgetary cuts targeting various government ministries.
This came as the board noted that the number of defaulters were on the rise, a move that was affecting other beneficiaries of the education system.
According to the board CEO Charles Ringera, over 500,000 students had applied for the loans but only 341,000 would benefit from the loans.
He said the board received Sh14.8 billion which was Sh5.7 billion less than their budgetary demands meaning a reduction in the number of beneficiaries.
“Due to the budgetary cuts, the number of students seeking HELB loans will drop this year but we hope that the number will rise in the coming year,” he said.
He added that over 107,000 graduates had delayed in servicing their loans with the numbers rising around July of every year.
“Currently the repayment rates stand at 68 per cent but this board is keen to make sure we raise it to 76 per cent by the end of the year,” he said.
The CEO noted that universities across the country were facing a financial crunch which had affected their operations and service delivery.
He said they were working closely with counties and corporates in resource mobilisation as part of addressing the current financial crisis.
Ringera was addressing the press in Naivasha after the launch of the HELB Mpesa app that empowers students to upkeep their portion of their loans.
He lauded Safaricom noting that the app would ease the process of receiving HELB loans and repayment for the students.
“Previously, students had to open accounts to access the loans but with the new partnership with Safaricom, things will be easier and faster,” he said.
Safaricom Chief Financial Officer Esther Waititu said the app could also be used to pay the HELB loans by the students.
Waititu termed the app as very secure, adding that the students would easily access the cash for their upkeep and to pay their fees.
“For years, students have suffered from seeking bank accounts to access their loans but under this app, the cash will be available on their mobile phones,” she said.
She was full of praise for the app noting that the students could easily get their statements and make their decisions faster.