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Did you know how the HELB loan process works in Kenya? From the application requirements, the processes, the disbursement and distribution. Read on to find out more.
Many countries invest in higher education to improve the future workforce. Some go as far as improving the equality of opportunity among needy students through student loans.
Kenya is one of the countries in Africa offering a higher learning student loan, popularly known as HELB. This article tackles the basics and details of HELB and its impact on students.
The Higher Education Loans Board (HELB) is a statutory state corporation in the Ministry of Education. The Board was established by an Act of Parliament, ‘Higher Education Loans Board Act’ Cap 213A.
The Board manages the funds to give loans to Kenyan students who want to obtain higher education at recognized institutions within and outside Kenya. Kenyan citizens often use the term ‘HELB’ to describe loans received from this Board.
The Technical, Vocational & Education Training (TVET) loan is given to students pursuing Certificates, Diploma, and Higher National Diploma courses in select Public Universities, University Colleges, Public National Polytechnics, and approved TVET Colleges under the Ministry of Education.
The TVET loan comes with a ledge fee of Ksh.1000 per year and an interest rate of 4% per annum. Once students have met the application requirements on the HELB portal and been approved, the Board disburses the funds within 14 days before the start of the semester.
Loan repayment starts within one year of study completion. However, it can also begin when the Board recalls the loan. Students can make voluntary payments before or after their studies to reduce their loan balance. Additionally, TVET loans are repayable for a maximum of 48 months.
The Undergraduate Loan is awarded to students strictly pursuing a bachelor’s degree. So, Certificate, Diploma, Pre-University and Postgraduate students do not qualify for this loan.
The student has to be in a Public or Chartered Private University within East Africa, placed through KUCCPS (Kenya Universities Colleges Central Placement Service), self-sponsored, or Parallel and Module II.
The Undergraduate loan has a set of requirements, dependent on the type of application. And like TVET, funds are given 14 days before the semester begins.
The loan has an interest rate of 4% per annum and Kshs. 1,000 ledger per year. Repayment starts within one year of completion of studies or such a period as the Board decides to recall the loan. The loan is repayable for a maximum of 120 months.
Jielimishe loan is eligible to employed or working students pursuing Professional Courses, Higher National Diplomas, Bachelors, Postgraduate-Diploma, and Masters or PhD degrees in Kenya. The loan is available in variations, depending on the student's employment.
Similarly, there are various requirements for loan applicants. Like the other HELB loans, the Jielimishe loan has an interest rate of 4% per annum and ledger fees of ksh.1000 per year.
However, repayment is due a month after receiving the loan. The Board has a monthly check-off system from the employer’s payroll. The loan is repayable for a maximum of 72 months.
HELB loan allocation happens twice yearly at the beginning of the first and second semesters. Applicants are, however, encouraged to start the HELB loan application one month prior for quick processing and a better chance at winning the loan. The Board releases the funds two weeks before the start of the semester, not sooner.
The Board advises students to manage their HELB loans well to pay for tuition, books, stationery, accommodation, and subsistence. Therefore, a student can use a single HELB loan for more than one semester, depending on the amount and with proper management.
TVET loanees can borrow up to ksh.40,000 with Ksh. 26,420 going directly to tuition and Kshs. 13,580 to the student’s bank account as upkeep.
The maximum undergraduate loan awarded is ksh.60,000 for secondary and first-time applicants. The loan is split to cater for tuition fees and upkeep for students placed by KUCCPS. However, self-sponsored students get all the money directly transferred to the university once a year as tuition fees.
The Jielimishe loan allows students to borrow up to 90% of the program fees, with a limit of Ksh. 600,000. Under this loan is the Civil Servants Training Revolving Fund, awarded strictly to civil servants who can borrow between Kshs. 30,000 and Kshs. 500,000. In addition, KRA staff have access to the KRA Staff Training Revolving Fund, where they can borrow up to Kshs. 500,000.
The issue that many students face with HELB loans is repayment. The Ksh.5,000 fine charged on every defaulted month increases the total month payable. Many defaulters complain of total amounts exceeding the initial loan. As such, some students opt for other loans, including:
● KCB Masomo Loan. Students with an active KCB account for 3 months, salaried or have a guardian qualify for this loan. It has an interest rate of 13% per annum, negotiation fees of 2.5%, and an excise duty of 20% of negotiation fees. The loan has a ksh.100,000 to 4 million limits and is repayable for up to 24 months.
● AMREF Sacco Higher Education Loan. Students in university and college qualify for this loan. The maximum loan application is 3.5 times a member’s deposit. Interest is charged 1% p.m. on reducing balance (6.5% p.a.). In addition, the loan is repayable for up to 24 months.
It is worth noting, however, that The High Court has prohibited HELB from demanding fines that exceed the prior borrowed amount. It comes after three students sought the court’s help to stop their fines after the loan status significantly exceeded their principal borrowing amount.
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