Uhuru Denies HELB Powers To Recall Loans Within One Year From Graduation
President Uhuru Kenyatta stepped in to help beneficiaries of Higher Education Loans Board (HELB) funds after declining to sign the Higher Education Loans Bill (2020).
Uhuru, who refused to sign the Bill into law on Tuesday, June 21, at State House in Nairobi, returned it to Parliament with a memorandum citing stringent clauses in the Bill that would give Helb power over loanees.
According to the document, the Bill amends Section 15 of the Helb Act to allow the board to recall the loan before the one-year grace period expires.
In accordance with this, it requested that beneficiaries provide the body with their contact information.
“A loanee shall be required, within one year of completion of his studies or within such a period as the Board decides to recall its loan, whichever is earlier, to inform Helb of his contact address,” the Bill read in part.
The proposed law required students who had outstanding loans to begin servicing them within one year of finishing their studies, including the interest on the disbursements.
Graduands who find work within the same time frame would be required to instruct their employers to make Helb deductions and remit them to the parastatal. Failure to do so would result in significant fines.
A loanee who fails or neglects to satisfy the requirements within the stipulated time would be guilty of an offense and liable to a fine of not less than Ksh5,000 in respect of each loan deduction that remains unpaid in accordance with Subsection 1, and such a fine would have been paid to the Board.
The Bill was defeated after the Board declared that it was underfunded due to unpaid loans. On May 22, Helb CEO Charles Ringera announced that 75,000 students who rely heavily on state funding may be denied the funds.
Ringera explained that 107,000 beneficiaries, including those who left the country for better opportunities abroad, defaulted on loans totaling nearly Ksh10 billion.
He went on to say that the board would follow the law and fine unserviced accounts.
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Helb announced a 100% waiver on loans paid in full by June 2022 to encourage credit servicing.
Uhuru also refused to sign the ICT Practitioners Bill into law.
The Bill sparked outrage due to its stringent requirements, including one that required players in the sector to hold a Bachelor’s degree and serve on a national board.