Students to ‘enjoy’ HELB loan as MPs propose half interest

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Higher Education Loan Board loans are yet to enjoy affordable repayment rates of loans.

The HELB students funding will be halved to two percent if MPs adopt a Bill that look set to cut the board earnings annually.

The amendments to the HELB Act seek to remove interest on student loans offered to women, youth and persons living with disabilities.

Gideon Keter

The interest cap at two percent will effectively leave HELB with a financing a hole of Sh543.5 million according to an analysis done by Parliamentary Budget Office (PBO), Business Daily reports.

“The aim of these proposals is to reduce the financial burden on recent graduates who are to pay large sums to the Higher Education Loans Board even before securing employment or becoming financially stable,” said nominated MP Gideon Keter who has sponsored the Bill.

The PBO estimates the number of students advanced loans every financial year is 50,000 with each getting an average of Sh200,000 by the time they complete studies.

The student financier gives loan beneficiaries a grace period of one year from the date of school completion, after which they are expected to start payments.

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Former CS Education Amina Mohammed

The outcry was staged when the former Education CS Amina Mohommed directed that loan defaulters to be arrested.

Students and graduates were protesting saying that unemployment was the root cause of not paying the loan.

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