The number of former university students defaulting on HELB loans has risen sharply. Defaults have increased by nearly 40 percent, reaching 380,530 by October. Unpaid loans now total KSh 42 billion, putting the agency under pressure.
HELB reports that many defaulters are professionals. Lawyers, doctors, engineers, and accountants make up a large share. The agency warns that this trend weakens the revolving fund model. Loan repayments are meant to finance new students. When beneficiaries fail to pay, the next group of learners suffers.
In the financial year ending June 2025, over 163,000 students in public universities and TVET colleges missed funding. The agency faced a shortfall of KSh 13.7 billion. Out of 713,173 applicants, HELB supported only 322,338 university students and 225,048 TVET trainees. The total loan demand was KSh 48.18 billion.
HELB has grouped defaulters into three categories. The first group lacks income. The second is willing to pay but does not know how. The third has the means but refuses to pay. About 124,640 fall into this last category. Another 83,571 are “hard-core defaulters” who have not paid for over ten years.
The crisis comes as job creation remains weak. Most new jobs are in the informal sector, making loan recovery harder. Many graduates work in unstable or low-paying positions.
Officials warn that continued defaults could cripple the fund. If repayments remain low, fewer students will get loans in future. This could limit access to higher education for needy students.
Experts say the government must act quickly. They suggest increasing funding, restructuring the loan model, or enforcing stricter repayment measures. The future of HELB, they warn, depends on restoring repayment discipline.
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