A total of 59,500 new students joining universities this year will get loans from the Higher Education Loans Board (Helb).
Chief executive officer Charles Ringera said so far the agency has received applications from 23,200 students.
First time loan applications were opened from June 1 and will be closed on August 30.“To date 23,200 applicants have applied and printed the forms; and out of the 23,200 printed forms, 2,345 have been submitted for processing,” Mr Ringera said.
Out of the 615,773 candidates who sat for the Kenya Certificate of Secondary Education (KCSE) last year, only 70,000 made the cut-off grade of C plus to join university.
This year the government allocated Sh9.6 billion to Helb to support students. It was cut from the previous budget of Sh10.1 billion, making it the first cut in recent years.
Data from the Kenya National Bureau of Statistics (KNBS) shows university enrolment declined to 520,893 this year from 564,507 a year ago — making it the first drop since the government stated making public student numbers in the 1990s.
Admission to public universities of students who scored C+ and above over the past two years has reduced the pool of learners available for private varsities and parallel degrees.
The falling student enrollment looks set to ease pressure on Helb, which has struggled in recent years to cater for the needs of the students, many of whom are from poor families.
The allocation of Sh9.6 billion includes cash recovered from past loanees, meaning that the actual allocation from the Treasury is much lower.
Already Education Cabinet Secretary Amina Mohamed has extended defaulters waiver for one month after the agency raised Sh500 million by end of June.
Ms Mohamed said the waiver was extended because past beneficiaries were willing to repay their loans.“Based on enthusiasm that most loanees have shown its imperative that we extend the repayment period so that we give them an opportunity to repay,” she said.
Mr Ringera said Helb had recovered Sh508 million from 9,112 loanees who had paid within the amnesty period which started on May 3 and ended on June 30.
“A total of 5,881 loanees are holding Sh971 million and have expressed willingness to repay in lump sum but they have been unsuccessful in their quest to beat the set deadline,” Mr Ringera said in a letter to Ms Mohamed dated June 29.
According to Helb, it cannot trace 17, 000 defaulters while by last year 85,000 beneficiaries were owing the agency Sh9.6 billion.
A total of 169,909 graduates had fully repaid their loans worth Sh13.2 billion by September 2017, while some 136,783 beneficiaries were servicing loans worth Sh20.7 billion.
Since 1974, the loan scheme has supported over 645,000 Kenyans at a total cost of Sh72billion. Since 1974, 396,680 loan accounts worth Sh47.5 billion have matured for repayment; while 264,000 loanees holding Sh24.5 billion have not.
Of the 396,680 loan accounts, a total of 175,003 loanees have completed their loan repayment valued at Sh16.7 billion. In 2016/2017 alone, the Board recovered Sh4.1 billion which accounted for 40 per cent of the Helb student financing budget of Sh10.2 billion for the year.
HELB loans have been a big source of income for students from poor backgrounds. There has been lobbies from some quarters to have the loan increased to at least sh 100,000 from the current sh 60,000 which the highest student receives.
The rationale for the increment is to mirror the high cost of living in the country. Currently, most universities don’t offer accommodation to their students meaning the students have to pay rent from their pockets. Most fraudulent landlords hike rent due to high demand around the colleges.
Most of the students depend on the loans for their rent and also tuition needs. The loan is barely enough and the end results means a high number of dropouts.