Blow To HELB as it Faces Sh3.7bn Budget Cut
The proposal from the Treasury suggests a reduction of Sh3.7 billion in the budget allocated to the Higher Education Loans Board (Helb) for the upcoming financial year starting in July, potentially impacting numerous beneficiaries of the loans.
Under the proposed plan, Helb would receive Sh33.3 billion to support financially disadvantaged students in universities and colleges for the financial year 2024–25. This allocation represents a 10 per cent decrease from the Sh37 billion allocated in the current financial year, which concludes next month.
The anticipated budget cut is likely to exacerbate the existing delays in loan disbursements experienced by students, particularly those in financial need who heavily rely on Helb loans to finance their education.
Despite retaining its role in disbursing loans under the new higher education funding model introduced by President William Ruto, Helb has faced challenges in maintaining previous funding levels. Consequently, the average allocation per student has decreased from Sh47,000 to Sh37,000.
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In the revised funding model, the University Fund has been tasked with distributing scholarships to financially needy students, further reshaping the landscape of student financial assistance.
The demand for student loans has been steadily increasing over the years, driven by rising enrollment in both universities and Technical Vocational Education and Training (TVET) institutions. Treasury data shows an 11.72 per cent increase in combined enrollment in public and private universities from the fiscal year 2020/21 to 2022/23, resulting in a corresponding surge in demand for university student loans.
While the number of undergraduate students receiving Helb loans rose initially, reaching 244,552 in 2021/22 before declining slightly to 228,453 in 2022/23, enrollment in public TVETs experienced a significant 52 per cent increase over the same period, highlighting the growing demand for financial assistance across different sectors of higher education.
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Blow To HELB as it Faces Sh3.7bn Budget Cut
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