Landmark Ruling That Protects HELB Defaulters from Excess Penalties

For years, HELB defaulters watched their student loans grow into overwhelming debts, fueled by accumulating interest and penalties.

The situation was been worsened by a high rate of unemployment and tough economic times that made it hard for beneficiaries to make money to honour their debt obligations. Despite all this, HELB has been blacklisting defaulters, given that borrowers are expected to begin making repayments one year after leaving campus.

In 2021, a landmark ruling by the High Court fundamentally changed how far HELB loan interest and penalties can go.

At the heart of the decision is a legal principle known as the in duplum rule. Derived from the Latin phrase ‘in duplo’(meaning ‘in double’), the rule simply states that once interest and penalties equal the original loan amount, no further charges may be added. 

In effect, the maximum recoverable amount on a non-performing loan is capped at double the principal.

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The 2021 Case

The ruling arose from a petition filed by three former students who argued that HELB’s calculation of interests and penalties were unconstitutional. They showed how relatively small loans had ballooned due to accrued interest and monthly penalties.

Anne Mugure borrowed Ksh82,980 in July 2004 at an interest rate of 2%. By July 2016, the outstanding balance had climbed to over Ksh540,000. On the other hand, Davis Nguthu received Ksh146,090 in 2016 and owed more than Ksh335,000 by March 2021. 

Wangui Wachira also received a HELB loan of Ksh135,000, which grew to about Ksh336,000 within five years. In all cases, the amounts demanded were well beyond double the original sums.

The petitioners argued that this violated their socio-economic rights under Article 43 of the Constitution, their consumer rights under Article 46, and the right to equality and freedom from discrimination under Article 27.

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Does the in duplum rule apply to HELB?

In court, HELB argued that the in duplum rule applied only to commercial banks under Section 44A of the Banking Act. Previous court decisions had, at times, supported a narrow interpretation limited to banks.

However, Justice Alfred Mabeya disagreed and ruled that the in duplum rule is grounded in public interest, not merely banking regulation. It was introduced to tame lenders who allowed interest to accumulate endlessly, making recovery a “cash cow” while trapping borrowers in permanent debt.

“Through the aforesaid legislation, the state sought to ensure fairness and justice in matters of borrowing, even where the lender has a higher bargaining power. There is nothing to bar the extension of such relief and accommodation to the specific borrowers under the HELB Act. 37,” read the ruling in part.

“Accordingly, the court finds that the application of the in duplum rule to the loans borrowed by the petitioners is not discretionary by the respondent but as a matter of right and law.”

What this means for HELB borrowers: In practical terms, your HELB loan cannot legally exceed twice what you borrowed once it becomes non-performing. For example, if you borrowed Ksh100,000, the maximum recoverable amount,  including all interest and penalties, is Ksh200,000. 

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HELB’s position

Owing to the recent debate on social media, HELB stated on Wednesday, December 3, 2025 stating that it applies all loans to the duplum rule as directed by the court.

“Following the High Court judgement in Mugure & 2 Others v HELB (2021), we wish to clarify that HELB fully complies with the In Duplum Rule. This means that all the HELB loan accounts continue to be managed in line with the judgment.

 “HELB remains committed to fair, lawful, and transparent loan management for all alumni/beneficiaries,” read the statement in part.

As of November 2025, 380,530 HELB beneficiaries had defaulted in paying Ksh42 billion, with the biggest defaulters being lawyers, doctors, engineers, and accountants. According to HELB CEO Geoffrey Monari, teachers are among those leading in making loan repayments.