HELB Loans Penalty and Interest Waiver in 2020

Once in a while the Ministry of Education announces the HELB waiver for all HELB beneficiaries in Kenya. This announcement is yet to be made in 2020. This announcement comes with a sigh of relief for many yet in real terms is not beneficial to many as expected.

First, for the sake ofclarity, a waiver is a voluntary removal of a certain charge or money owned.The HELB loan waiver is meant to reduce the amount of money required to be paidby a HELB beneficiary. At least that’s what most expect.

Annually the Minister ofEducation would announce a waiver on HELB loans. It comes in differentpercentages for instance 80% or 100%waiver that CS Amina gave in 2018. This waiver however usually applies topenalties only and not the entire loan amount.

Also, you are given thecondition to repay your entire loan in a lump sum over about 3 months to enjoythe HELB penalty waiver. Well, this doesn’t seem fair!

The idea behind thewaiver is to make it easier for HELB beneficiaries to repay their loans fromthe income they are making. How then can you ask a loanee to pay the entireloan which amounts to hundreds of thousands over such a short period?

If this approach is meantto be helpful to Kenyans most of whom are unemployed, then they need to extendthe waiver to the interest accrued besides the penalty and extend the time for paymentto 6 – 12 months.

Last year, HELB cameunder huge criticism for its attempt to publishnames and photos of loan payment defaulters in an attempt to shame andcoerce them into the payment of the loans. This move was considered absurd anda lazy way of its fund recovery strategy from a depressed young economy.

I don’t think the problemis beneficiaries’ unwillingness in paying the loans. The problem is a result ofseveral systemic factors that have to be considered to remedy the situation.

Most fundamental of allfactors is unemployment. Kenya’s government has been promising to createhundreds of thousands of jobs annually since I-can’t-remember-when, a promisethey have always fallen short of.

This happens whilehundreds of thousands of students graduate every year and join the job market. Besides,companies have been layingoff thousands of workers monthly which signifies the inevitable change in theworkforce in the future.

Secondly, the cost ofHigher education is rising rapidly while its quality falls across most of the intuitionsin the country. This comes as a result of the influx of students in certainprofessions resulting in exceeding of resources available for qualityeducation.

I think if we are tosolve these issues we need to change the education system into amultidimensional program that enables students to learn how to apply acquired knowledgeto create jobs, use their talents to earn a living, understand how to use the internet to makemoney and learn how to manage money.