The Higher Education Loans Board (Helb) has released a report on its loan allocation for 2021 which reveals that 34,531 students were denied loans last year by the board after it cut funding by Kshs 1 billion.

HELB data shows that only 341,606 students were awarded loans compared to  376,137 applications that the board received in the year ending June 2021.

To further break down the numbers, a majority of those who have been facing tough times are drawn from public universities, with 55 percent or 19,259 students missing out on the state loans, and 6,361 from private universities while 8,911 were students from TVETs.

The loan board stated that it could only come up with Kshs 14.2 billion for loan allocations, a 6.6 percent decrease from Kshs15.2 billion which was the first dip recorded in four years.

The board blames the cash crunch on the Treasury which has slashed its allocations to the lender, as well as the mass defaulting on loans by former university students owing to the economic effects of the Covid-19 pandemic, that led to mass layoffs, business closures, and a freeze in hiring.

“This is linked to reduced activities in the education sector during the review period,” Kenya National Bureau of Statistics (KNBS) director-general Macdonald Obudho told a local publication.

To mitigate the crisis, the loans board has resorted to campaigns such as the KamilishaMalipoYaHelb to attract some 109,661 beneficiaries who according to their data defaulted on their loans after the pandemic, which has crippled the board's ability to cater to the 34,000 students.

HELB has introduced a penalty waiver for defaulters that has been extended to June 30, in a bid to motivate those who have not begun repaying their loans to do so.

“We acknowledge that unemployment and underemployment as well as a challenging environment for loanees to start and run a business, has affected Helb loan repayment,” stated Helb chief executive Charles Ringera in a statement announcing the extension of the penalty waiver.

Ringera in a previous statement had warned hardcore defaulters of legal action to have them forced to pay back the loans and stated that the loans board was working with state agencies to exchange crucial data that will aid in flagging those whose loans have not been serviced for ten years.