ODOTE: Helb needs to be more innovative

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Helb needs to be more innovative

Sunday, March 3, 2019 22:00

By COLLINS ODOTE

The Higher Education Loans Board (Helb) has been in the news recently for the wrong reasons. At the heart of the disquiet relates to the loans granted to university students. Establishment of Helb has helped to provide a mechanism for government supporting students to access university education.

This is in addition to the direct payments that government already pays per student direct to the Universities. The difference is that the former is given out to students who apply and qualify for it as a loan, repayable after completing their studies.

The former Cabinet Secretary for Education kicked off the controversy with her reported announcement that students who fail to pay for their loans risked arrest and prosecution. The second was a media interview by the Chief Executive Officer of Helb. During the interview the CEO underscored why students must pay for their loans as soon as they complete their studies and that those who do not pay risk dire consequences.

The monies that Helb gives to university students is largely a loan and should be repaid. By not paying back beneficiaries are doing a disservice to the nation as they deny other deserving students the chance of accessing education through applying for and receiving loans to meet the cost of their university studies.

When the first report was covered by the media, threatening criminal sanctions for those who fail to repay their loans, I initially thought the reports were inaccurate. However, as the debate raged without any efforts to claim that either it was a rumour or a misreporting, my concerns grew.

When one receives a loan from Helb, they enter a contractual obligation. When they fail to repay the loan, the critical concern of the law should be to trace them so that they can be able to repay. While the Act makes failure to fail a criminal offence, two critical issues are worth mentioning.

Firstly, the overriding objective of the law is not the use of criminal sanctions. Instead it is administrative action to try and recover the money. The penalties for non-payment are a fine of Sh5,000. The sum involved is very little. This is to demonstrate that the focus should not be on punishment.

In fact, the fine is in addition to the other measures to recover the money. What the Cabinet Secretary should be dealing with is how to recover the money owed and not threats of criminal sanctions. In any case the failure to repay on its own cannot be an offence.

One must determine ability to pay first. It is only when one has the means to repay the loan and they refuse to pay that they may be in trouble with the law. Unless we deal with this latter aspect, we run the risk of criminalising poverty.

What stops law enforcement agencies for arresting youth who have not paid their loans even when they genuinely do not have a source of income and thus are not able to even meet their basic needs, leave alone repaying the loan. A policy pronouncement that focusses on arresting such people is creating as opposed to solving a problem.

The related problem is the grace period before one pays the loan. One is expected to start repaying the loan within one year of finalizing their studies.

The assumption is that one will have started earning an income within that period. Unfortunately, with the state of the economy, the number of young people who remain jobless is high. In addition, the time period is, according the CEO, calculated not from the date one graduates, but when they are expected to graduate.

The Helb Act requires to be amended to bring it in line with the current realities. The blanket offence for not repaying the loan should be removed. The grace period should be moved from one year to at least three years from graduation. Helb should liaise with universities so that they obtain information on those who graduate every year so that those students who either for medical, academic or disciplinary issues do not get to complete their studies on time do not get penalised twice.