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HELB Interest Rate, Penalties Unconstitutional: All You Need To Know
HELB Interest Rate, Penalties Unconstitutional: All You Need To Know
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HELB Interest Rate, Penalties Unconstitutional: All You Need To Know

Eddy Mwanza
August 24, 2022
Student loan beneficiaries at Helb offices in Nairobi. FILE PHOTO | NMG
Student loan beneficiaries at Helb offices in Nairobi. FILE PHOTO | NMG

On August 19, 2022, the Kenyan High Court ruled that some of the interest and penalties imposed by the Higher Education Loans Board (HELB) are a direct contravention of the Constitution of Kenya.

It went on to rule that HELB is not entitled to demand or recover from its loanees an amount exceeding double the amount advanced to the said loanees.

The petitioners – Ann Mugure, Wangui Wachira, and Davis Nguthu, shared the full ruling following his successful petition, which is set to change what HELB can and cannot do when it comes to recovering funds advanced to its clients.

Prior to the landmark ruling, students who took up the education loan often found themselves on the end of exorbitant interests and penalties, at times even more than double the amount they had initially borrowed to facilitate their studies.

For example, Anne Mugure disclosed that she had borrowed Ksh82,980 in July 2004, and by July 2016, her debt had accumulated to Ksh540,464 due to interest and penalties.

How HELB Works

The statutory body prides itself as the leading financier of higher education in Kenya. In March 2022, more than 75,000 university freshmen received their first disbursement of HELB loans.

The state corporation funds students in need to the tune of between Ksh35,000 and Ksh65,000 per year. Notably, the average allocation this year dropped from Ksh43,000 to the aforementioned Ksh35,000.

Read Also: HELB Loans Open for 2022-2023 First-time Applicants - How to Apply 

HELB Loan Process

This process is carried out via the HELB web portal ( However, an applicant would still need to download and print the filled forms for manual submission and signing by the relevant officers.

To be deemed a viable candidate for a HELB loan, one needs to be over the age of 18 and admitted to a recognized higher education institution within the East African Community on a full-time course.

The basic requirements in terms of documentation are:

  • A copy of the national Identity Card
  • Copies of the parent's national ID cards or death certificate if parents are deceased
  • Proof of parent’s retirement, if retired.
  • Names of at least two guarantors and copies of their identification documents
  • A copy of the university admission letter
  • KCPE and KCSE result slip/certificate
  • Colored passport-size photographs
  • A KRA pin number
  • Government-sponsored students may be required to provide a copy of their ATM/Bank card.

Once everything is in place, the rest is a pretty easy guided procedure on the HELB web portal. On the platform, one is required to create and follow the stipulated steps right up to the point where copies of the duly filled application forms can be downloaded and printed for submission.

HELB Interest Rate

Prior to the landmark ruling of August 19, 2022, HELB used to charge an interest of 4% per annum. For example, if you take a loan of Ksh37,000 for 5 academic years, the principal amount is Ksh185,000.

It is important to note that the interest rate varies depending on the level of education, for example, a continuing student seeking a master's or doctoral degree gets a 12% interest rate.

The interest is then charged on that amount.

Notably, all loanees are required to start their repayment after a period of one year on completion of studies or within such a period as the Board may decide to recall the loan.

In August 2021, the National Assembly rejected a Bill that sought to lower the interest rate on HELB loans to 3%. The Bill proponents argued that the move was geared toward cushioning jobless graduates from the harsh defaulter penalties.

On its part, HELB argued that if passed, the Bill would hinder its capacity to fund needy students.

Repayment Terms

Undergraduate loans are to be repaid within 120 months upon completion of studies while loans for salaried students are to be repaid within 48 months upon disbursement.

According to the HELB guidebook, applicants are advised to read and understand the loan agreement form as certain loan schemes have specific terms and conditions.

For loanees who are formally employed, the employer is expected to deduct the loan installments from the wages or remuneration as directed by the Board.

Employer Obligations

The Board further directs that in the case of salaried loanees, the monthly installments should not exceed 25% of their basic pay.

Employers have the responsibility by law to inform the Board in writing within a period of three months when a loanee is employed.

Notably, the employer is directed to remit every deduction from the loanee's wages within 15 days after the end of each month or risk being penalized for non-compliance.

HELB Penalties

In April 2022, HELB grabbed the headlines when it announced it was taking what it described as ‘hardcore defaulters’ to court.

According to the state corporation, at least 100,000 individuals had failed to service their loans for decades, some going as far back as 1979.

These loans usually attract a fine of Ksh5,000 for each month a loanee fails to honor their obligation to pay.

Impact of Lack of Payment

According to the Board’s guidebook, any loanee who fails in his/her obligations may be charged with a penalty added to the loan and where necessary, may be asked to pay the full amount, plus interest, as well as penalties in a lump sum on top of being negatively listed on CRB.

The Board also reserves the right to outsource the collection of loans to professional debt collectors at the loanee's cost.

Threats to Name and Shame

One of the agency's biggest problems has been loan defaults, which have almost completely crippled its ability to lend money at a time when more students than ever are applying for loans.

In line with this, HELB has on several occasions threatened to publish names and photos of defaulters on various media platforms. 

The latest HELB data shows unpaid loans standing at Ksh10.9 billion. The mounting defaults have weakened the agency’s ability to support university and technical college students, prompting allocation cuts.

Between May -June 2022, HELB ran a campaign - Kamilisha Malipo Ya HELB, which involved a 100% penalty waiver, in an effort to push its loanees to repay their outstanding loans.

What Next?

Loanees shared their relief following the August 19, 2022, ruling across various media platforms.

The historic ruling means if one borrows  Ksh100,000, the maximum amount they will pay at the end is Ksh 200,000.

This, coupled with the occasional incentives such as waivers are expected to boost the frequency of repayment, thereby freeing up more funds for needy students.


Here’s a look at some of the most frequently asked questions regarding HELB loans.

Loanees Frequently Asked Questions as Answered By HELB

Q. How often do you send loan statements?

A. To know your loan status visit our website: 

Q. What are the modes of repayment?

A. Check off system, Credit card, Standing order, Cash/cheque deposits to HELB Account. 

Q. How do I pay my loan from abroad?

A. You can pay online using “WAVE”. 

Q. What happens if I default?

A. You will be penalized. For each month that remains unpaid, you pay a fine of not less than  Ksh5,000

Q. Can I clear it in one installment?

A. Yes, without any extra charges.

Q. Why charge ledger fees?

A. For administration of your loan account.

Q. What happens when I clear my loan?

You will be issued a certificate of clearance.

Q. What happens if I overpay?

A. HELB shall refund the overpayment.

Q. How long does it take to get a refund?

A. A maximum of one month

Q. What if I die before clearing the loan?

A. Your next of kin is required to contact HELB

Q. What happens if I change employers?

A. Inform HELB and get a new repayment plan.

Q. Loans are not recoverable after six years. Is it applicable in your case?

A. No. HELB is governed by an Act of Parliament that dictates loan recovery.

Q. Do you repay the loan if you are on probation?

A. Yes. The loan is due for repayment upon the completion of studies or when HELB recalls the loan, whichever is earlier.

Q. How do you determine the monthly deduction rate?

A. Undergraduate loans are repaid within 120 months upon completion of studies while loans for salaried students are repaid within 48 months upon disbursement. Other loans have specific repayment periods. 

Please refer to the loan agreement form or contact HELB at

Q. My payslip balance reads zero, does that mean I have cleared loan repayment?

A. Not necessarily. Please confirm with your loan statement and seek clearance from HELB.

Q. Does my employer need authority from me to make loan deductions?

A. Like any other statutory deduction, authority is derived from the law (HELB Act 1995)

Q. Can I instruct my employer to start deductions without first consulting HELB?

A. Yes

Q. My employer stopped deductions from my pay, that’s not my mistake.

A. Loan repayment is your responsibility. Please keep track of your repayment until completion.

Q. What happens if an employer does not remit the deductions made?

A. A penalty of 5% per month is charged to the employer for every deduction that remains unpaid.

Q. How do I get a HELB compliance certificate?

A. Beneficiaries will be issued with a compliance certificate upon request at no fee.

No certificate will be issued to loanees in default. Non-beneficiaries will be required to pay an application fee of Ksh1,000. This service is available online at

Eddy Mwanza is Creative Consultant living and working in Nairobi, Kenya. His areas of focus are Content Creation, Creative Writing, Research and Photography. When he is not writing in his favorite coffee shop, Eddy spends most of his time reading, cooking, and traveling. He is also a sports fanatic. Connect with Eddy on LinkedIn.

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