HELB Amendment ACT Considers Waiving Interest on Jobless Graduates
A new attempt has been made in Parliament to amend the Higher Education Loans Board Act (1995) in Kenya, with the aim of waiving interest on loans for graduates and individuals living with disabilities until they secure their first employment.
The bill is being championed by Joyce Kamene, the Machakos Woman Representative, who is seeking support from the Kenya Kwanza Alliance. The alliance has promised in its Education Charter to restructure the Higher Education Loans Board (Helb) to offer interest-free loans.
If the bill successfully passes through Parliament, it will pose a test for President William Ruto. This is because his predecessor, Uhuru Kenyatta, had previously rejected attempts to amend the Act on two occasions, citing concerns about the sustainability of Helb as a revolving fund.
The proposed amendment seeks to provide relief for graduates and individuals living with disabilities who have taken loans from Helb to finance their higher education. The waiver of interest on these loans would be in effect until the borrowers secure their first employment.
This is seen as a way to ease the burden of loan repayment for fresh graduates who may face challenges in finding employment immediately after completing their studies.
Joyce Kamene, who is leading the effort to amend the Act, believes that the interest waiver will provide a much-needed incentive for graduates to seek employment without the added pressure of loan repayments.
She argues that this will also contribute to reducing the high levels of unemployment among young people in Kenya, as it will enable them to focus on job hunting and building their careers without the immediate financial burden of loan repayments.
The Kenya Kwanza Alliance, which has expressed support for the amendment, had included it in its Education Charter during the 2022 general elections. The alliance promised to restructure Helb to offer interest-free loans as part of its commitment to improving access to education and addressing the challenges faced by Kenyan students in financing their higher education.
However, the proposed amendment has faced some opposition, with concerns raised about its potential impact on the sustainability of Helb as a revolving fund.
Some argue that waiving interest on loans may reduce the revenue generated by Helb, which could affect its ability to provide loans to future students. Others argue that the focus should be on creating more employment opportunities for graduates, rather than waiving interest on loans.
President William Ruto’s stance on the proposed amendment remains to be seen. As the bill progresses through Parliament, it will be closely watched to determine whether it can garner enough support to pass into law.
If successful, it could potentially provide significant relief for graduates and individuals living with disabilities who have taken loans from Helb, while also addressing concerns about the sustainability of the revolving fund.
HELB Amendment ACT Considers Waiving Interest on Jobless Graduates