NAIROBI, Kenya — The Higher Education Loans Board (HELB) is seeking new powers that would allow it to access and freeze the bank accounts of loan defaulters, as it struggles to recover Sh35 billion owed by more than 316,000 former university students.
Appearing before the National Assembly’s Public Investment Committee on Governance and Education, HELB Chief Executive Officer Geoffrey Monari warned that the high rate of default is threatening the sustainability of the fund, which has for nearly three decades supported students from low-income backgrounds.
“Only Sh66 million is being repaid by 464,000 former beneficiaries—over an extended period of 10 years,” Monari told lawmakers. “Meanwhile, 316,000 graduates have not started repaying their loans. If we can get them to comply, it would significantly improve our cash flow.”
New Legal Powers Sought
Monari called on Parliament to amend existing laws to allow HELB to freeze the accounts of defaulters—especially those with stable income sources—much like the Kenya Revenue Authority does when pursuing tax evaders.
“My request is for legislation that allows us to freeze accounts of former students who are doing business but not repaying their loans,” he said. “This would encourage compliance and unlock funds for current university students.”
HELB estimates that with stronger enforcement tools, it can improve its recovery rates and reduce its overreliance on Treasury allocations.
Lawmakers Question Recovery Strategy
Members of the committee, however, questioned HELB’s recovery approach, expressing concern that the board lacks effective mechanisms to track defaulters.
“Are you saying all 316,000 defaulters are unemployed and unable to repay?” posed Embakasi West MP Mark Mwenje. “Do you have a system to track these funds?”
Committee Chair Francis Sigei (Sotik MP) added, “Are you aware of employed graduates who are reluctant to pay? What about those in successful businesses?”
In response, Monari said HELB’s inspectorate department works to ensure compliance, and that employers who fail to remit deductions are penalised Sh3,000 per month for each affected employee.
Diaspora and Gig Economy Challenges
Monari admitted that recovering funds from defaulters living abroad or working in the informal gig economy remains difficult.
However, HELB is collaborating with embassies and the State Department of Immigration to better track individuals using their ID and passport records.
“We are also running online campaigns and encouraging voluntary repayment by those in the diaspora,” he said.
To pressure self-employed graduates, Monari noted that defaulters are blacklisted with the Credit Reference Bureau, limiting their access to credit.
Still, enforcement in informal sectors—especially for digital freelancers and gig workers—remains a blind spot.
“We appeal to these graduates to repay their loans, as it is the right thing to do and ensures future students can benefit,” Monari added.
Broader Funding Strategy Urged
Lawmakers urged HELB to diversify its revenue streams to reduce dependence on government funding.
“As time goes on, you must realise the Treasury is not a reliable source of funds. You need to work harder to recover your loans,” the committee advised.
The committee has summoned Education Cabinet Secretary Julius Ogamba and Higher Education Principal Secretary Beatrice Inyangala to appear before it on June 18 to explain HELB’s financial challenges and respond to MPs’ concerns.
