The Higher Education Loans Board (HELB) is grappling with a massive KSh89.7 billion in defaulted student loans, raising concerns over the sustainability of the fund and its ability to support future generations of learners.
According to Auditor General Nancy Gathungu, more than 730,000 loan accounts had matured by June 30, 2025, carrying a total running balance of KSh115.4 billion. Of these, 563,949 accounts remain in default, covering unpaid principal, interest, ledger fees, and insurance charges.
“Included in the matured loans are five hundred and sixty‑three thousand nine hundred and forty‑nine (563,949) loan accounts with a running balance of KSh89,869,844,221. In the circumstances, the high default rate may affect the sustainability of the students’ loans fund, which may in turn limit loans availability to students in future,” Gathungu cautioned.
The Auditor General questioned the effectiveness of HELB’s debt recovery strategies, warning that the high default rate exposes the board to significant financial risks. She urged HELB to urgently strengthen its recovery mechanisms and reassess loan policies to safeguard the continuity of student financing.
ALSO READ:
KICD, Mizizi Elimu Afrika launch Values Based Education in schools nationwide
The report also flagged challenges with the New Funding Model (NFM), which was declared unconstitutional by the High Court on December 20, 2024. The court ruled that the model was discriminatory, violating students’ right to education by shifting the government’s constitutional responsibility to fund public universities onto parents. “The legitimate expectation of the citizens was violated,” the ruling stated.
A detailed breakdown of default rates by loan age paints a worrying picture. Loans issued within the last five years, held in 281,459 accounts amounting to KSh39.6 billion, recorded a 44 per cent default rate. Those aged five to 10 years, covering 191,766 accounts worth Sh33.4 billion, had a 37 per cent default rate.
Loans between 10 and 15 years old, spanning 32,608 accounts worth KSh8 billion, recorded a nine per cent default rate. Accounts aged 15 to 20 years, numbering 11,377 with a total of KSh2.9 billion, showed a three per cent default rate, while loans between 20 and 25 years, held in 8,118 accounts, were also reported.
Gathungu warned that unless decisive measures are taken, the ballooning defaults could undermine Kenya’s higher education financing framework, limiting opportunities for thousands of students who rely on HELB to pursue their studies.
By Masaki Enock
You can also follow our social media pages on Twitter: Education News KE and Facebook: Education News Newspaper for timely updates.
>>> Click here to stay up-to-date with trending regional stories
>>> Click here to read more informed opinions on the country’s education landscape
