The Higher Education Loans Board (HELB) has dismissed claims that university students will be charged a 12 per cent interest rate on their loans and could graduate with debts exceeding Ksh4 million.
HELB termed the reports inaccurate and misleading, saying they misrepresented the country’s current student financing model, loan interest rates and the level of debt students are likely to accumulate.
The clarification was issued on Friday, August 7, following a front-page story published by The Standard under the headline Degrees of Debt.
According to HELB, the publication contained factual inaccuracies that had created unnecessary anxiety among current and prospective students, parents, institutions of higher learning and the general public.
“The publication contains factual inaccuracies regarding HELB’s student financing model, loan interest rates, and the level of indebtedness that students are likely to incur,” the board said.
HELB Says Student Loan Interest Rate Remains at 4%
One of the major claims disputed by HELB concerns the interest rate charged on student loans.
The board clarified that the interest rate for undergraduate university students, TVET trainees and KMTC students remains at 4 per cent per annum.
This contradicts claims that the government had increased the student loan interest rate to 12 per cent.
HELB said students should therefore not be misled by reports suggesting that the current financing framework has introduced a 12 per cent interest rate on their loans.
The board maintained that the applicable interest rate remains 4 per cent per annum.
HELB Disputes Ksh4.2 Million Medical Student Debt Claims
HELB also rejected reports suggesting that medical students could graduate from university with debts exceeding Ksh4.2 million.
According to the board, the maximum cumulative HELB funding available to a medical student is Ksh2,308,116.
HELB explained that the amount is subject to several factors, including a student’s eligibility, the duration of their programme and annual means testing under the Student-Centred Funding Model.
The board said the Ksh4.2 million figure reported by The Standard does not represent HELB financing available to students under the current funding framework.
“The figure of Ksh4.2 million published by the newspaper does not represent HELB financing and does not reflect the actual funding available to beneficiaries under the current model,” HELB said.
Reports Raise Concerns Over Future Student Debt
The HELB clarification follows reports suggesting that the government was planning to abolish undergraduate scholarships and replace them with loan financing carrying an interest rate of 12 per cent.
The reports sparked concerns about the potential financial burden that students could face after completing their studies.
There were also concerns that graduates could leave university with very large debts, particularly students pursuing programmes that require several years of study and significant financial resources.
The reports further suggested that such changes could discourage students from low-income families from pursuing higher education.
There were fears that increased student debt could also undermine efforts to promote equitable access to university education in the country.
HELB Says Its Mandate Is to Promote Access to Higher Education
Despite the concerns raised by the reports, HELB maintained that its mandate remains focused on ensuring that deserving Kenyan students are not denied access to higher education because of financial difficulties.
The board said it continues to implement the government’s Student-Centred Funding Model, which provides financial support based on the individual financial needs of students.
According to HELB, the model is intended to promote equitable access to higher education by ensuring that financial circumstances are taken into consideration when providing student funding.
The board maintained that its role remains to support students who require financial assistance to pursue higher education.
HELB Urges Public to Rely on Official Information
HELB has urged students, parents and institutions of higher learning to rely on verified information when seeking clarification about student financing.
The board said any future policy or operational changes affecting student financing would be communicated through its official channels.
This means that students should verify reports concerning changes to loan interest rates, scholarships, funding amounts and other aspects of student financing before acting on them.
HELB’s clarification is intended to address concerns arising from the reported changes and provide clarity on the current student financing framework.
Conclusion
HELB has rejected claims that undergraduate students are now subject to a 12 per cent loan interest rate and that medical students could graduate with HELB debts exceeding Ksh4.2 million.
The board maintains that the interest rate for undergraduate university students, TVET trainees and KMTC students remains 4 per cent per annum.
It has also clarified that the maximum cumulative HELB funding available to a medical student is Ksh2,308,116, subject to eligibility, programme duration and annual means testing under the Student-Centred Funding Model.
HELB has consequently urged students, parents and institutions to rely on its official communication channels for accurate information regarding student financing and any future policy changes.
