How University Placement and Loans Will Work in New Funding Model Scrapping HELB

The government has introduced the Tertiary Education Placement and Funding Bill, 2026, which will significantly change how higher education is financed if passed by the National Assembly.

Among the proposals is the replacement of HELB with the Tertiary Education Funding Authority, which will not only issue loans to students but also create education savings schemes where parents and guardians can deposit money for their children’s future university education.

The new Bill is set to make university funding solely dependent on student loans, a move that will see beneficiaries take loans to fund 100% of their education.

Here is the breakdown of the new proposals for university funding

Also Read: Proposed Law Makes it Mandatory to Declare HELB Loan to Employers

Creation of Tertiary Education Funding Authority

The Bill proposes replacing the HELB with a new institution that will manage student funding across universities and colleges.

The new body will be responsible for issuing scholarships and loans, managing student funding applications, and recovering loans from beneficiaries.

“In performance of the functions under section 29, the Authority shall have powers to establish a savings scheme or product to receive deposits from any person for the purpose of saving towards tertiary education in respect of a specific child,” read part of the Bill in part.

However, details of how the savings scheme will work were not highlighted in the Bill.

Also Read: New Funding Model to Leave Graduates With HELB Loans of Up to Ksh1.2 Million

Student Loan Applications and Recoveries 

Similar to the current operations of HELB, students who qualify to join universities and colleges will be eligible to apply for loans to fund their education.

However, the new Bill provides a detailed structure on the repayment of student loans.

Beneficiaries will be required to begin repaying the loans a year after completing their studies.

Those who get employed will be obligated to inform their employers of their loan status to facilitate monthly deductions. Employers will be obligated to remit the deductions by the ninth of every month.

“The Authority shall charge an employer who, after making a deduction from the employee emolument, fails to remit the deductions to the Authority within the prescribed period, a sum equal to five per cent of the total amount of the repayment for each month or part of the month that the repayment remains unpaid,” the Bill proposes.

On the other hand, a loanee in informal employment shall enter into a payment plan with the Authority on the mode and frequency of payment. 

“In making deductions for loan repayment, the Authority shall deduct not more than twenty five percent of the loanee's emoluments,” reads the Bill in part.

Also Read: University Funding Model Proposes Parents Start Saving for Fees Via Govt Agency

How University Placement Will Be Done

The Kenya Universities and Colleges Central Placement Service (KUCCPS) will be responsible for placing students to universities and other tertiary institutions.

The placement body will also be mandated to set a framework to facilitate placement of students and trainees in tertiary education institutions.

KUCCPS will also be mandated to offer coordinated career guidance to persons intending to pursue tertiary education and advise the Cabinet Secretary on matters relating to students and trainees.

The Bill by the government has been tabled in the National Assembly and is set to be debated in Parliament.

President William Ruto had asked MPs to fast-track the Bill so that it can be implemented with the candidates joining universities and colleges in September.

“We tried the differentiated model; I think the vice-chancellors here know, it didn’t work because it made most of our universities almost close down. Because while we promised 80% funding, we went down to 40%, and most universities suffered. We have worked on what we thought was equity, where we said parents will contribute a small portion, we will give a portion of loan, we will give a portion of scholarship, but it is not good enough. We are moving to universal”, he stated.

“I want to implore Parliament to expedite amendments to the Higher Education Loans Board so that beginning September we can make sure that any child who qualifies for medicine does not fail to study medicine because their parents cannot afford to pay the household contribution,” he said.