A deepening crisis in Kenya’s higher education sector is threatening the futures of thousands of students from low-income backgrounds. The Higher Education Loans Board (HELB) has confirmed it is unable to issue new student loans this year due to severe budget shortfalls — putting September’s university intake in jeopardy.

In the last financial year, HELB required Ksh.48 billion to support students, but only received Ksh.26 billion from the Treasury. As a result, over 100,000 students went without full support, with many receiving upkeep stipends but no tuition coverage.

“We paid upkeep for some, but not tuition. Second semester is worse — we haven’t paid tuition at all,” said HELB CEO Geoffrey Monari.

To avoid student protests, HELB prioritized basic upkeep over tuition. However, the decision has triggered a financial crisis across universities and TVETs, many of which are now struggling to operate without tuition remittances.

“Universities and TVETs are bleeding. We avoided protests, but the money is simply not enough,” Monari added.

Compounding the problem is the growing number of loan defaulters — past beneficiaries who, despite being employed or owning assets like cars, have failed to repay their loans. HELB is now pushing for access to data from institutions like the Kenya Revenue Authority (KRA) and the National Transport and Safety Authority (NTSA) to track and compel defaulters to repay.

“Some have bought cars but won’t repay their HELB loans — that has to stop,” Monari emphasized.

To stabilize the sector, HELB is proposing several long-term reforms, including:

• A 3% education levy from Value Added Tax (VAT), modeled after Ghana’s 2.5% allocation, to ensure sustainable education financing.
• A voluntary parental education savings scheme, allowing families to invest in their children’s education and earn dividends — reducing dependency on government loans.

Education Committee Chairperson Julius Melly supports the proposal: “Parents can save, earn dividends — and even borrow from it. It’s like any other investment fund.”

Despite these ideas, the clock is ticking. Unless immediate funding solutions are implemented, HELB warns that thousands of students may be unable to access university education in the upcoming September intake.

This looming crisis calls for urgent, collective action to safeguard the future of Kenya’s youth and the stability of its higher education institutions.