The HELB Act Must Be Reviewed: Stop Punishing Unemployed Graduates
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Dr. Luchetu Likaka
The call to urgently review the HELB Act is long overdue. The current student loan model is becoming increasingly detached from Kenya’s economic realities.
Thousands of graduates leave university only to face prolonged unemployment or underemployment. They are expected to begin repaying loans almost immediately, despite having no stable source of income.
Penalizing unemployed graduates for failing to repay debts they have no capacity to service is neither economically rational nor socially just.
HELB continues to invest substantial resources in loan recovery, yet many of its targets simply do not have jobs.
A recovery strategy built on chasing unemployed graduates is inefficient, costly, and unlikely to improve repayment rates.
The real solution is not more aggressive enforcement; it is creating an income-contingent repayment framework that reflects graduates’ actual earning capacity.
Also Read: How You Can Help Your Poor and Unemployed Friends Repay Their HELB Loan
HELB Interest and Penalties
Equally troubling is the continued accumulation of interest and penalties, which raises legitimate concerns about compliance with the in duplum principle, a legal doctrine intended to prevent interest from exceeding reasonable limits on non-performing debts.
Kenyan courts have repeatedly affirmed the importance of protecting borrowers from excessive interest accumulation, yet concerns persist that HELB’s recovery practices remain inconsistent with this principle.
Student financing should expand opportunity, not create a lifelong debt trap.
Also Read: Common Mistakes That Cause HELB Loan Delays or Rejection
Modern Helb Act
A modern HELB Act should link repayment to employment and income, suspend interest during periods of verified unemployment, cap recoverable interest in line with established legal principles, and prioritize rehabilitation over punishment.
The objective of higher education financing is to produce productive citizens who contribute to national development, not to burden graduates with debts they cannot realistically repay.
Until the law reflects Kenya’s labour market realities, the current system will continue to punish unemployment rather than solve it.
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Dr. Luchetu Likaka PhD is a Distinguished Consultant Criminologist and Sociologist, Boasting over 15 years of Experience in the Field. PHOTO/ Luchetu Likaka
