The national government has been asked to consider waiving all interest accrued on HELB loans for individuals who are still jobless.
The Universities Academic Staff Union (UASU) University of Eldoret branch Secretary General Phillip Chebunet argues that it is unfair for the government to keep piling interest on loans to graduates who are yet to secure jobs.
HELB loans accrue an interest of four per cent every month a beneficiary fails to repay irrespective of whether one is employed or not.
According to Chebunet, the interest should only apply to an individual who has secured a job but fails to make repayments.
“Those who received the loans and are yet to get jobs is not their problem that they are unemployed. It is the way the economy is,” the UASI official told Uasin Gishu News on Wednesday, September 6, 2023.
“Why are they punishing the jobless? They should waive the loans the way they are waiving loans for the sugar companies like Chemilil, Mumias and Muhoroni,” he added.
Chebunt further noted that should the government allow the interest to accrue on the HELB loan for the jobless, some may never be able to repay.
Lower interest rate
Calls for the waiving of the HELB loan for the jobless come at a time when there has been a push from Members of Parliament to reduce the interest rate from four per cent.
The Helb (Amendment) Bill, 2023 introduced in April proposes the rate to be lowered to a maximum of three per cent so as to cushion the jobless.
A similar proposal was rejected by the Higher Education Loans Board noting that lowering the interest rate would see them lose about Sh693 million every year.
As of February 2023, Loan defaulters owed Helb Ksh8.45 billion, up from Ksh6.7 billion in June 2020.
The government recently introduced a new funding model to replace the current one.
Students joining universities and colleges this September will get funding through the new model.
According to Chebunet, as much as the new system will ensure every student benefits, it will take time before it is effectively implemented.
However, he expressed his support for the model that provides loans and scholarships to students depending on the level of neediness.
“I believe with the leadership of President William Ruto, all will be well under this government,” said the UASU official.
“Those joining this year will bear the consequences of this model but it will be okay after 1 or two years. The experimental group will be the one to suffer,” he added.
