Benefits, Challenges, and Loan Consequences of HELB

A significant financial investment is made in higher education, and in Kenya, the Higher Education Loans Board (HELB) is essential in helping students with their financial needs. Aiming to increase access to education, the new funding model for higher education has a number of advantages. But HELB has a number of difficulties, and declining on a loan has serious consequences. These points will be covered in further detail in this guide, which will help in your understanding of Kenya's higher education funding environment.

Benefits of the New Higher Education Funding Model

Adequate Financial Support:  The new funding model ensures that all eligible students receive the financial assistance they need. This support reduces the financial burden on students and their families, making higher education more accessible. By receiving adequate financial support, students can focus more on their studies and less on financial worries.

Quality Education: With better funding, educational institutions can improve their facilities and resources. This leads to a higher quality of education as schools and universities can invest in better teaching tools, updated libraries, and modern laboratories. Enhanced resources contribute to a more enriching learning experience for students.

Equitable Support: The new model allocates funds based on each student's financial need. This means that students from low-income backgrounds are given priority and receive the necessary support to pursue their studies. By ensuring equitable support, the model promotes fairness and equal opportunities for all students.

Timely Disbursement:  One of the critical benefits is the timely distribution of funds to students through their institutions. This prevents delays in payment, allowing students to pay for their tuition, books, and living expenses on time. Timely disbursement reduces financial stress and helps students maintain their focus on academics.

Reduced Financial Barriers:  Financial barriers can prevent many students from accessing higher education. The new funding model helps reduce these barriers by providing loans and scholarships. More students can afford to enroll in universities and Technical and Vocational Education and Training (TVET) institutions, increasing overall enrollment rates.

Enhanced Accountability:  The new model encourages transparency and accountability in the disbursement and use of funds. By reducing the risk of corruption, it ensures that the funds are used for their intended purposes. Enhanced accountability means that more students benefit from the available financial resources.

Challenges Facing HELB

Despite the benefits, HELB faces several challenges:

1. Limited Resources: HELB often struggles with insufficient funds to meet the growing demand for student loans.

2. Unemployment among Loan Beneficiaries: Many graduates face unemployment, making it difficult for them to repay their loans.

3. Increased Loan Applications: The number of students applying for loans continues to rise, putting a strain on HELB’s resources.

4. Lack of a National Identification System: This makes it challenging to track loan beneficiaries and enforce repayment.

5. Emigration of Loan Beneficiaries: Students who move abroad may default on their loans, as it becomes harder to track and enforce repayment.

6. Poor Policy and Legal Frameworks: Inadequate policies and legal structures can hinder effective loan management and recovery.

7. Corruption: Instances of corruption among HELB staff and beneficiaries can lead to mismanagement of funds.

Consequences of Not Repaying HELB Loans

Repaying HELB loans late can have negative consequences. There is a penalty of Kshs. 5,000 or more for each month the loan is not returned. This can add up quickly, making the defaulter's debt load greater. Repayment of a loan can also have a negative impact on one's credit rating and financial security. Moreover, it may result in legal action, which makes it even harder for defaulters to get loans or other financial support in the future.

For students seeking loans for higher education, it is essential to understand the advantages and difficulties of HELB as well as the consequences of not repaying debts. Although there are many benefits to the new funding arrangement, it's crucial to use caution when handling it and to meet your payback commitments. To take advantage of the opportunities HELB support offers, if you meet the requirements, apply as soon as possible.

By Dorcas Kinya