•MPs backed the proposal saying the current regime is infringing on the beneficiaries calling for a relaxed window period for the commencement of the repayment.
•However, the Bill was opposed by the Education Committee warning it risks weakening Helb in the face of reduced government funding.
Image: GERALD MUTETHIA
MPs have backed a proposed law to have recipients of university loans start repaying only after getting employed.
The Higher Education Loans Board (Amendment) Bill sponsored by Igembe South MP Paul Mwirigi wants to outlaw any penalty on defaulting beneficiaries who are yet to get a formal job.
The Bill is currently in the second reading.
The lawmaker describes as unfair the current arrangement where Helb beneficiaries are charged Sh5,000 per month in penalties for non-payment within a year of completing a course.
Luanda MP Christopher Omulele who chaired the session told the House how he paid Sh90,000 from the Sh2000 he owed to the loans board.
On Wednesday, Mwirigi billed his proposed amendments as necessary relief to thousands of jobless youths who find themselves listed by the Credit Reference Bureau for non-payment.
He said only a small percentage of graduates secure employment within one year after graduation.
“Currently it is very difficult for a graduate to secure a job without Helb clearance documents. This has made it more difficult for graduates,” Mwirigi said.
MPs backed the proposal saying the current regime is infringing on the beneficiaries calling for a relaxed window period for the commencement of the repayment.
Mumias East MP Benjamin Washiali said it is foolhardy for anyone to expect a jobless graduate to start servicing his or her loan.
The former National Assembly Chief Whip said most of the students demanding the loans are from poor backgrounds or orphaned and can only start repayment after securing a job.
“Sometimes we wonder if that student has not been employed, where do we expect him to get the money to pay that loan?” Washiali asked.
Tharaka MP George Murugara said the loans have become poison chalice to thousands of graduates who have remained jobless after graduation.
Igembe Central MP Kubai Iringo called for a way of turning the loan into a grant to enable students from poor families to access university education.
“The fund is meant to assist needy students but it has become a nightmare to them, currently we are having students who have done their degrees and have been floating for up to ten years and with the system activated to start paying, it becomes a big problem,” Iringo said.
However, the Bill was opposed by the Education Committee warning.
it risks weakening Helb in the face of reduced government funding.
The committee chairperson Florence Mutua told the House the loans board is yet to recover Sh10.5 billion from defaulters.
“Going by this trend, Helb is going to collapse and as a committee having considered the amendment clause by clause, the proposed amendments are objectionable as it will weaken the Helb,” she said
Edited by Kiilu Damaris