Graduates who are yet to find jobs should not wait until they get employed to start repaying their HELB loans, the Higher Education Loans Board has said.
In a notice issued on Wednesday, November 11, the board said all beneficiaries are expected to begin repayment within one year of completing their studies. This applies to those in formal employment as well as Kenyans who are self-employed or earn a living through small businesses.
HELB asked graduates without regular incomes to pay what they can afford, recommending Ksh1,500 as a starting monthly amount for those in informal employment and low-income groups.
The board said graduates running kiosks, selling clothes or doing freelance work can also make payments towards their loans instead of waiting to secure salaried jobs.
“Your hustle is valid, and so is your repayment plan. Whether you’re selling jeans, running a kiosk, or freelancing, you can still repay your HELB loan,” the board said.
Borrowers can also make voluntary payments while still studying or after completing their courses to reduce the amount they owe.
However, the Ksh1,500 figure is a recommendation for informal and low-income earners. The amount a borrower pays may be higher depending on their outstanding loan and repayment circumstances.
For example, some of the Kenyan workers who earn formal employment receive a deduction of around Ksh 5,000 per month. The borrowers with huge balances, like those who borrowed loans both for undergraduate and postgraduate studies, could have to make additional payments to offset their debts.
Those graduates who for many years have not been paying could also be subjected to higher deductions when they start paying their loans.
HELB can compel the employer of the graduate to deduct extra money from the earnings to settle the backlog and charges accumulated during the period.
Another category of people prefers to pay more than the recommended to offset the debts earlier.
The calculation of the interest is based on reducing balance, which means the amount of interest depends on the balance.