The Treasury has proposed to reduce the budget for the Higher Education Loans Board (Helb) by Sh3.7 billion in the financial year starting in July, which could affect thousands of beneficiaries of the loans.
The Treasury seeks to allocate Sh33.3 billion to Helb to fund thousands of needy students in universities and colleges in the financial year 2024–25.
If MPs approve the proposal, it will mark a 10 percent cut to Helb’s budget, down from the Sh37 billion it has been allocated in the current financial year that ends next month.
The budget cut is likely to worsen the delays students have been facing in recent years in receiving their disbursements from the Helb. The delays particularly hit needy students, who often rely on the Helb loans to sustain their stay in school.
Helb retained its role of disbursing loans to students under the new higher education funding model introduced by President William Ruto last year.
Under the old model, the loan entity funded needy students to the tune of between Sh35,000 and Sh60,000 per year.
However, due to the funding hitches, the average allocation to students has declined to Sh37,000 from Sh47,000.
In the new funding model, the University Fund was given the role of disbursing scholarships to needy students.
Demand for student loans has been growing steadily for years as the number of learners joining universities and Technical Vocational Education and Training (TVET) institutions continues to grow.
According to the Treasury, the combined enrolment in public and private universities increased by 11.72 percent, from 571,510 in the financial year 2020/21 to 638,479 in the financial year 2022/23.
This led to a rise in demand for university student loans, with the number of undergraduate students receiving Helb loans increasing from 229,727 in fiscal 2020/21 to 244,552 in 2021/22 before declining to 228,453 in 2022/23. At the same time, the number of students enrolled in public TVETs rose by 52 percent, from 250,733 to 380,638 during the three years.
