The Higher Education Loans Board (HELB) in Kenya is now facing one of its worst financial moments. For many years, HELB has helped thousands of students pay for their university education.
But in 2025, the board is no longer in a position to support new applicants. The crisis started with two major problems severe budget cuts from the government and a growing number of loan defaulters who have not paid back their student loans.
This situation is now affecting over 150,000 first-year students who may miss out on joining university simply because there is no money to support them.
HELB’s budget was cut by Sh710 million for the financial year 2024–2025. This has left a huge hole of about Sh13.7 billion in its operations. On top of that, 293,122 former students have not paid back their loans.
The total amount HELB is trying to recover from these defaulters stands at KSh33.2 billion. This figure shows how serious the problem has become, and although the board has recovered KSh5.21 billion in the past 12 months after tracing 17,000 defaulters, it is still not enough.
The shortfall continues to grow, and the board is struggling to meet the demands of new students.
This lack of funding now puts many young Kenyans at risk. About 153,292 students who were placed by the Kenya Universities and Colleges Central Placement Service (KUCCPS) might not get the financial support they were depending on.
These students are scheduled to report to universities in September 2024, but without HELB loans, most of them might be forced to stay home. For many families, especially those from poor backgrounds, university fees are too high without help.
The impact of this crisis could last for years, limiting job opportunities for young people and slowing down Kenya’s development.
HELB has been under pressure to act quickly. They are now looking at new ways to handle repayments. Some of the ideas include creating income-based repayment plans where people pay back their loans depending on how much they earn.
They are also considering plans that allow informal workers to make weekly payments. These new models may help in the long run, but they are not ready yet.
A new higher education funding model is expected by September 2025, and many hope it will offer better solutions.
The government has responded by increasing HELB’s budget to KSh41.5 billion in the 2025/26 national budget. While this is a positive step, it does not erase the problems already caused.
Many students have already missed deadlines, and others remain unsure if they will be able to continue with their studies. The public is angry, with many blaming poor planning, weak recovery systems, and lack of job opportunities for graduates.
Some have called for more creative solutions like introducing a student education levy for employers or allocating a small portion of VAT to education.
The future remains uncertain for thousands of young Kenyans. HELB’s crisis has become a national concern, showing just how fragile the higher education system is when funds are not managed well and loans are not repaid.
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