Disadvantages of helb loan for students in Kenya

Helb loan was introduced during Moi era when it was apparent that many Kenyans could not afford higher education because of lack of funds. President Daniel Moi ordered for the incorporation of a government body responsible for giving loans to needy students, that’s how helb was born.

Higher Education Loans Board has since helped minimize the education gap between children of poor background and those who eat life with big spoons. More than 100,000 Kenyans have directly benefited from the loans while thousands others are in the programme.

Though the programme has been praised, it has brought so many untold suffering. Many beneficiaries are complains of stiff penalties for loan defaulters.

According to helb, once the beneficiary completes undergraduate degree, he should start repaying their loans, whether they have a source of income or not. Failure to surface the loan, the individual will receive a monthly penalty of Ksh 5,000 plus the usual 12 percent interest rate. If you instance you fail to pay within your first year of graduation, the penalty will accumulate to Ksh 60,000.

The issue of the huge penalty has been contested by majority of beneficiaries, which prompted the Members of Parliament to think of introducing a motion to force helb reduce it to at least Ksh 1,000 per month.

Following what I have seen loan defaulters go through, I wish to caution whoever intends to take the loan to think twice, of course it plays a significant role in one’s education path but the damage it causes to the defaulters is huge.

One shocking thing about helb loan is that once you default, the institution circulates your details to all financial institutions such that when you intend to secure a loan, you are denied outright.

The good news though is that there is an amnesty, where helb requires one to pay the entire principal amount and receive up to 80 percent waive on the penalty.






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