The Higher Education Loans Board (HELB), once the backbone of university financing for thousands of Kenyan students, is facing a paralyzing cash crisis. With the 2025 academic year underway, HELB has admitted it simply doesn’t have the money to issue fresh student loans. For many learners from low-income backgrounds, this signals not just an academic pause—but a total shutdown of their dreams.

Last year, HELB needed KSh 48 billion to meet its obligations. It only received KSh 26 billion. The result? Over 100,000 students were either underfunded or completely left behind. Some scraped by with upkeep funds but received nothing for tuition. Others got nothing at all.

Universities Are Quiet—But They're Bleeding

HELB CEO Geoffrey Monari painted a grim picture. To avoid widespread campus unrest, the board prioritized upkeep disbursements over tuition payments. The result? Students aren’t protesting because they’re eating—but universities are choking.

Starved of tuition remittances, public universities and TVET institutions are now on the brink. Essential services have stalled. Salaries are delayed. Operations are thinning out. And the long-term sustainability of Kenya’s higher education system has never looked shakier.

Default Culture: Alumni Lavish While HELB Suffers

As if that weren’t enough, HELB is being suffocated by its own alumni. Thousands of former beneficiaries—some now driving luxury vehicles and working white-collar jobs—have simply refused to repay their loans. With debt recovery mechanisms stuck in the 1990s, HELB’s efforts have largely been reactive and ineffective.

To fight back, the board is now demanding access to real-time data from government agencies like KRA and NTSA. By plugging into tax and vehicle registration systems, HELB hopes to expose defaulters and reclaim lost billions.

Monari is pushing for new legislation to enable these linkages. According to him, it’s the only way to build an intelligent enforcement mechanism in an era of digital finance and personal luxury.

A Radical Proposal: VAT-Fueled Education Fund

Beyond debt recovery, HELB wants structural reform. At the heart of its proposal is a 3% education levy pulled directly from VAT collections. Modeled after Ghana’s 2.5% education VAT allocation, the idea is to create a ring-fenced, predictable source of funding for tertiary education—one not tied to annual budget politics.

Additionally, HELB has proposed a long-term savings scheme where parents can voluntarily deposit money towards their children’s higher education. Managed like a mutual fund, this initiative would pay dividends and allow contributors to access low-interest loans when needed.

A Grim September: No Loans, No Learning

But all these ideas remain just that—ideas—unless Parliament and the Treasury act now. With the September university intake fast approaching, thousands of qualified students are at risk of missing out on education simply because the money isn’t there.

The HELB funding crisis isn’t just a budgetary issue—it’s a generational crisis. Every year lost pushes Kenya further away from building a skilled, competitive workforce. Unless immediate steps are taken, this collapse could unravel decades of progress in expanding access to higher education.