The Higher Education Loans Board (HELB) is seeking legal amendments that would allow it to freeze the bank accounts of more than 316,000 former university students who have yet to repay their loans a debt load now topping KES 35 billion ($270 million).
Appearing before Parliament’s Public Investments Committee, HELB CEO Geoffrey Monari urged lawmakers to revise the HELB Act to give the agency powers similar to the Kenya Revenue Authority (KRA), which can freeze business accounts to recover unpaid taxes.
“We’re calling for legal backing that lets us lock accounts of former students with steady incomes who refuse to repay,” Monari said. “This would not only promote compliance but also strengthen our ability to fund new students.”
While over 464,000 former beneficiaries are currently repaying their loans, HELB collects just KES 66 million ($510,000) monthly far below what’s needed to sustain the program. A growing portion of its budget is now propped up by Treasury allocations.
The agency says that even partial repayment from the 316,000 inactive accounts could significantly improve cash flow, allowing it to support more students amid surging university enrolments.
Employers are legally required to deduct and remit loan repayments on behalf of their staff, with penalties of KES 3,000 ($23) per defaulting employee each month. But enforcement remains a challenge, particularly for graduates working abroad or in Kenya’s informal and gig economy, where incomes are often irregular and difficult to track.
To tighten the net, HELB says it is collaborating with Kenyan embassies and the Immigration Department to trace defaulters abroad. Domestically, the agency continues to rely on blacklisting defaulters with credit bureaus, a strategy with mixed results.
Despite these hurdles, Monari is optimistic that stronger legal tools will enable HELB to claw back billions and secure the future of the student financing system.