HELB: A Lifeline That Became a Razor for Many Graduates

By John Kimani

“Why did I apply for it?” For many Kenyan graduates, that question lingers long after university. Years earlier, the arrival of a Higher Education Loans Board (HELB) disbursement message felt like a miracle. For thousands of young men and women, the loan was more than just financial support.. It was hope. It meant rent could be paid, tuition settled and dreams kept alive.

On campus, the HELB notification often felt like a reward for academic effort, almost like a birthday gift after the struggle of KCSE exams. For many students from modest backgrounds, it was the difference between dropping out and continuing their education.

But for a growing number of graduates today, that lifeline has become a burden. The joy that accompanied the first HELB loan has gradually been replaced by repayment notices, penalties and financial pressure. What once represented opportunity now feels, for some, like a shadow hanging over their adult lives.

Lecture halls that once echoed with laughter have given way to quiet anxiety as graduates calculate how much of their salaries will disappear into loan repayments before they can even stabilise financially. HELB, once seen as a bridge to opportunity, increasingly feels like a razor, sharp enough to carve out a future, but cutting deeply into the very hands it was meant to lift.

The scale of the problem is difficult to ignore. By the end of 2025, HELB CEO Geoffrey Monari acknowledged a significant repayment crisis. According to the board, more than 380,330 loan defaulters collectively owed the government about Ksh. 42 billion.

What is striking is that many of these defaulters are not unemployed graduates struggling on the margins of society. A surprising number belong to Kenya’s professional class. Data released by HELB shows that 21,356 lawyers, 19,580 accountants, 16,065 doctors and 12,014 engineers have failed to repay their loans for over a decade.

But the question remains: Is this really negligence?

In a country grappling with rising living costs, stagnant wages and economic uncertainty, the answer is not straightforward. Even professionals with respectable careers face mounting financial obligations; rent, family support, school fees for siblings and daily survival in an increasingly expensive economy. Loan repayments, especially when penalties accumulate month after month, can quickly become overwhelming.

This reality contrasts sharply with the early years of HELB. When the loan scheme was introduced, a university degree almost guaranteed employment. Graduates often moved directly into stable jobs, salaries began flowing and loan repayment was manageable. Today, the landscape has changed dramatically.

According to a 2025 World Bank report, it now takes an average of five years for many Kenyan graduates to secure stable employment. Even advanced degrees such as master’s or PhDs no longer guarantee job security.

For many young professionals, the result is a painful paradox: they are highly educated but financially unstable, expected to repay loans without reliable income. Personal stories bring this reality into sharper focus.

Brian, a law graduate and someone close to me, began receiving HELB repayment notices even before he secured his first stable income. He often narrated how he handled legal matters for clients who never paid him, claiming they were simply helping him “gain experience in the field.” Meanwhile, HELB interest and penalties continued accumulating, slowly pushing him into a financial trap that felt impossible to escape.

Another story that caught my attention came from Jane Waweru, who shared her experience on TikTok. Jane began university in 2017 and received Ksh. 37,000 in her first year to cover both tuition and upkeep. She skipped applying in her second year but received Ksh. 45,000 annually from her third to fifth year, bringing her total loan to Ksh. 172,000.

After graduating in 2022, she started repaying the loan in July 2024. Within 16 months, she had already paid Ksh. 80,000. Yet her outstanding balance still stood at Ksh. 128,309, meaning she had reduced the original loan by only about Ksh. 43,691. More than Ksh. 36,000 had been absorbed by interest, leaving her shocked and frustrated.

Another social media user, @drngumba, shared a similar struggle. HELB asked him to begin monthly repayments of Ksh. 1,500. While the figure might appear modest, he admitted he simply could not afford it. His income was already stretched thin, covering food, rent and servicing a Ksh. 200,000 business loan that needed to be repaid within two years.

On top of that, his younger sister was preparing to join university and would likely depend on HELB support as well. The pressure, he admitted, had left him deeply anxious.

Stories like these reveal the complicated reality behind the statistics. Many graduates are not refusing to repay their loans—they are simply struggling to stay afloat.

A closer look at HELB’s policy framework reveals why the pressure can escalate quickly. Undergraduate loans attract 4 percent annual interest on a reducing balance, beginning immediately after funds are disbursed. Graduates are granted a one-year grace period after completing their studies before repayment becomes mandatory.

However, even if a graduate remains unemployed after that year, repayment is still expected.

Failure to comply attracts a Ksh. 5,000 monthly penalty, which continues accumulating until the loan is serviced. In addition, defaulters risk being listed with the Credit Reference Bureau (CRB), making it difficult to access other forms of credit.

For some graduates, the consequences can extend beyond finances.

I once watched a young woman recount her experience on YouTube, her voice trembling as she explained how CRB listing had locked her out of financial support, even when she desperately needed a loan to fund medical surgery. Listening to her story, it became clear that HELB debt is not only an economic issue; it can also become a matter of dignity and survival.

Interestingly, Kenya’s approach differs significantly from that of neighboring Tanzania. Tanzania’s Higher Education Students Loans Board (HESLB) operates under a comparatively softer framework. According to HESLB CEO Bill Kiwia, Tanzania’s system is interest-free, charging only a 6 percent annual value retention fee to account for inflation. Defaulters face a one-time penalty of 10 percent on the outstanding balance rather than monthly penalties. Graduates are also given a 24-month grace period before repayment begins, double the time allowed in Kenya.

This comparison raises an uncomfortable question: If Kenya arguably has a stronger economy than Tanzania, what prevents it from adopting a more graduate-friendly loan framework?

Kenya has considered reforms before. The proposed 2023 HELB Bill Amendment suggested reducing interest rates from 4 percent to 3 percent, removing HELB’s unilateral authority to set interest charges, and ensuring that penalties would only apply after graduates secured employment.

The bill also proposed exempting youth and persons with disabilities from repayment until they found their first job. However, HELB rejected the proposal, warning it would result in Ksh. 1.8 billion in annual losses. 

Still, economists believe reform is necessary.

“By adopting friendlier repayment models, Kenya could transform HELB from a razor that slices into ambition into a bridge that sustains opportunity without punishing vulnerability,” economist Kamau Wairimu recently wrote on his X account.

Ultimately, the numbers and stories surrounding HELB reveal a system with unintended consequences. With nearly 380,000 graduates in default, it is clear that many borrowers want to repay their loans but simply lack the financial capacity to do so. While HELB is designed as a revolving fund to support future students, its current structure risks undermining the very graduates it once helped.

The real question now is what HELB will represent in the future. Will it remain a financial razor cutting into the dreams of graduates, or evolve into the bridge it was originally meant to be? Because for many young Kenyans, the promise of education should open doors, not quietly lock them.

John Kimani is a Chuka University media student