At least 95,000 university and college students will miss out on education loans owing to budgetary constraints.
Worse still, lucky ones to receive funds from the Higher Education Loans Board (Helb) will have to make do with reduced amounts of Sh38,000, down from Sh45,000, because of budget cuts.
“We had improved our average at the university level to about Sh45,000 and this year, because of the supplementary budget cuts and a loan recoveries dip of Sh1 billion, the average per student had to reduce,” said Helb chief executive Charles Ringera.
The news is a big blow to thousands of university and college students , who solely depend on the loans to fund their education, coming at a time the economy is reeling from effects of the Covid-19 pandemic and the resultant loss of livelihoods for millions of Kenyans.
Ringera said the board, which offers loans to students in universities and Technical and Vocational Education and Training (Tvet) institutions, is grappling with a Sh5 billion deficit accrued from the 2019-2020 and 2020-2021 financial years, which has affected funding patterns.
“We have lost about Sh1 billion due to Covid-19 impact on loan recoveries, so in total this year, we are looking to a cut of about Sh3.2 billion, which we will not be able to get for purposes of funding student budget,” said Ringera.
He explained that the total budget was estimated at Sh15.5 billion but because of funding cuts by government, the board has been forced to reduce the student budget by about Sh3.2 billion.
Ringera, who made the remarks in Nairobi when USAid handed over the Afya Elimu Fund (AEF) to Helb, said the board started the current financial year with a deficit of Sh2.8 billion, hence the funding gap.
Overall, Helb seeks to fund about 450,000 students in Tvet and universities at a total cost of about Sh12.8 billion, which is Sh3.2 billion short of the amount the agency was to spend.
“That means about 95,000 students will go unfunded this year. They have just resumed their classes and we are worried about how we will be able to manage that situation but that is how it is… there are no revenues flowing into the country, people are unemployed so they cannot be able to pay their loans so we have to use what we have,” Ringera explained.
He said the Tvet students will still get Sh40,000 from Helb and a capitation of Sh30,000, which brings the total to Sh70,000 out of which Sh13,600 is for upkeep while Sh56,400 will fund tuition.
“We had targeted 110,000 students from Tvet institutions at a total cost of about Sh4 billion but now we will have to work with about 80,000,” Ringera stated.
Although 143,000 students qualified to join university this year, not all of them will require loan intervention, Ringera noted.
Ordinarily, about 80 per cent of them require some intervention and Helb will have to get into the budgeting mode as students pick their courses.
“We will have to look at the number of applications received, how much money we have and appropriate it accordingly to the number that is very needy but definitely we will not be able to fund the entire 80 per cent,” he explained.