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By:
HARRISON MAINA | |||||||||
| Posted:
Sep,28-2015 21:22:54
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BOSTON--In a bid to recover overdue loans and close the gap in financing education for new college students in Kenya, the Higher Education Loans Board, (HELB), is offering a deal to Kenyans in the USA through an amnesty to repay the loans by October 31, 2015, and benefit from an 80% penalty waiver of penalties which have been accumulating on a monthly basis since January 2010. According to HELB officials visiting the USA for bilateral discussions with various institutions and Kenyans, the penalties, authorized by the HELB Act of 1995, Section 15 (1) and Chapter Six of the constitution of Kenya onLeadership and Integrity have been adding up rapidly for those students who are not repaying the loan. According to the Constitution, all Kenyans are expected to get a compliance certificate in order to get clearance to hold a public office in Kenya. A beneficiary is expected to be actively repaying the loan or has completed repayments. In addition, the officials said, two credit bureaus and three debt collection agencies have been engaged and are profiling all loan defaulters. Further, all beneficiaries who have completed repayments are positively listed by Credit Reference Bureaus to enable them get favourable repayment terms with financial institutions. The credit sharing initiative has seen HELB and all financial institutions share credit information. Speaking to Ajabu Africa News during a visit to Boston on Tuesday, the two HELB officials, CEO Charles Ringera and Board Chairman, Charles Wachira, said that Kenyans living in USA can repay their overdue balances, through several means including: anonline payment portal on the HELB website (www.helb.co.ke), MPesa, Credit/Debit Card, or direct bank deposits. There are several banks that are working with the educational financier to receive payments on their behalf, among them KCB, Co-operative Bank, Barclays and Equity Bank. The officials added that a Kenyan Embassy HELB account will soon be opened for those Kenyans who would prefer to remit the funds through our Embassy in Washington D.C. (They did not specify whether the account will be working before the deadline).
According to the officials, the Government of Kenya through the Higher Education Loans Board has spent Kshs 53 billion to fund the education of 482,000 students since the scheme was established in 1975. However, only 102,000 students have completed repaying their loans worth 9.9 billion to date, while another 111,630 are currently servicing their loans worth KES 16.7 billion. "This leaves about 74,500 students in complete default of their loan obligations to the tune of Kshs 8.6 billion.Some of these loans are more than 30 years old and have been outstanding since 1974." Mr. Ringera said that due to the increased demand for higher education in Kenya, the Board requires Kshs. 10 billion to fund 209,000 students currently enrolled in 68 Public and private Universities. He added that faced with the increased shortage in funding, HELB has stepped up measures to recover unpaid loans by offering a penalty amnesty to past beneficiaries who have not commenced repayments. He said that the first amnesty that waived 100% of the penalty took place for 60 days between Marchto July 2013, when more than Kshs. 1.2 billion was repaid. Following the success of the initial amnesty, HELB ran another 40 day amnesty in 2014 where another Kshs. 485 million was repaid, hence the need for the Board to extend the offer to Kenyans living in the Diaspora especially in the USA. A successful amnesty for Kenyans living in the UK was instituted in 2014, prompting the Board to now embark on recovering huge sums owed by beneficiaries residing in the USA. The HELB officials said that most defaulters owe HELB an average Principal Loan of Kshs. 70,900 excluding interest of 2%, ledger fees and penalties for those who graduated between 1974 and 1995, and between Kshs.110, 000 to156,000 excluding interest, ledger fees and penalties those who graduated from 1997 to 2014. The loans, popularly known as "boom" had been very popular with University students witha big chunk directed towards books, clothing, entertainment and other uses. However, the officials stressed that the main problem is not the money owed or the interest charged, but the penalty charged under the HELB Act which the Board has generously waived. "The Section 15 (a) of the HELB Act authorizes HELB to charge a penalty of Kshs. 5,000 ($50) per month from January 2010 to date for all inactive loan accounts." According to HELB data, the average penalty amount per graduate is around Kshs. 305,000 ($3,050) which, when added to the principal and interest, makes the total amounts owed range from 305,000 for those who graduated in 1974 to 461,000 shillings for 2014 graduates. "What we are proposing is to give Kenyans an opportunity to repay the funds by 31st October 2015and in return we will waive 80% of the accumulated penalties due. By doing so, you will enable us to have more money to advance loans to needy students back home who are right now waiting for college funding in order to get an education like you got," he urged. Ringera added that HELB is also willing to accept repayment plans where a defaulter can pay by instalments as long as a plan is put in place before the expiration of the amnesty period. He said that the Board was ready and willing to listen to Kenyans in USA willing to repay their debt as the patriotic and responsible thing to do. However, as a measure of last resort, HELB is also working to recover the funds through USA debt collectors to the extent allowed by the US law for those not willing to take the new amnesty offer. Ringera also revealed that HELB has just held talks with the US Secretary of education,Arne Duncan in Washington D.C during their current visit, in an effort to have the US government assist the Kenya government in ways to recover the loans.
"The US government is willing to help us find ways to recover the funds as a condition for them to continue assisting Kenya with education funding through USAID. USAID provides us some funds to educate students in many of our higher learning institutions especially technical institutes and nursing colleges. They are very keen on assisting students attain such education as a means of helping them get skills that can gain them employment immediately after graduation," said the CEO. He added that according to readily available data, over 90 % of students who graduate with technical certificates are more likely to get jobs within the first year of graduation as compared to degree graduates at 65% over the same period. The CEO also said that such technical certificate holders are the ones who create the most employment opportunities through many small businesses they start. "This is why our President is very keen on having many Kenyan youths attain certificates in various technical fields like nursing, carpentry, masonry, plumbing etc. It is the mission of the Jubilee Government to have at least one technical college in all the 47 counties in Kenya in the next few years." "Repaying the loans owed will also save you from the need to keep sending a lot of money to educate your relatives back home. The best and most prudent thing to do is to repay the funds so that we have money to give more loans to more students and relieve you the need to send money. This also clears the way for you to be in good standing with the law in case you might want to come back home to transact any investment business or run for public office," said David Wachira, HELB chairman and former Chairman of Dedan Kimathi University in Nyeri. Mr. Ndegwa Wachira also a former Managing Director at Consolidated Bank and a seasoned banker revealed that a memorandum of understanding is currently in the works between the Ministry of Foreign affairs and the Ministry of Education to enable HELB to fully engage defaulters in the USA in an effort to recover the billions owed. The two officials have been meeting Kenyans indifferent US cities and states including Alabama, Arkansas, Boston, New York, and Washington D.C. They urged Kenyans who would like to know their actual loan balances for the purpose of planning how to repay to contact HELB through email indicating their full names, National ID number, Institution and the year they graduated to:recovery:recovery@helb.co.ke "We will respond within 24 hours with what you owe, the interest accrued and the penalty charged. But we would prefer you to take advantage of the new US amnesty to repay before October 31, 2015 in order to avoid the penalty," assured Ringera, the CEO. The concerted efforts by HELB to recover unpaid loans owed by Kenyans in USA comes in the heels of strikes by University students in Kenya two days ago complaining of delay in disbursement of the much needed funds, which the students claimed was hurting their education while others languished at home for lack of tuition.(Read Here:Students protest over funds delay). While in the USA, the HELB officials can be reached at:(540) 630-1761. In Kenya, HEB can be reached at:+254 0711052000 For more information, visit,www.Helb.co.ke | |||||||||
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Source:
AJABU AFRICA NEWS
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