The Higher Education Loans Board (HELB) has taken a major step in tightening its hold on loan defaulters. This comes after the board introduced new penalties for both the employer and the former student who has not been making any payments towards their loan.
The board introduced a new notice on Friday, which stated that any employer who does not declare their employees who have HELB loans or who does not remit the deductions will face a Ksh3,000 fine per employee every month. Additionally, the board also stated that the fine will also be charged from the time the employee started working, which means some companies could end up paying huge amounts if they have not been compliant from the start.
The former students who have not been making any payments towards their loans will also face a Ksh5,000 fine every month. This comes as the board attempts to raise the Ksh100 billion it lost from defaulting borrowers.
The board also stated that there are more than 20,000 employers and 360,000 loan borrowers who are in default. This follows a 2025 directive that required employers to support loan recovery.
Under the rules, employers are supposed to submit records of their staff, deduct 15 per cent from the salaries of those with HELB loans, and send the money to the board.
However, HELB says many companies have not been following these requirements.
The board has also made it clear that there are no plans to write off any unpaid loans, insisting that the money must be recovered to support future students.
To make compliance easier, HELB is encouraging employers to use its online portal. Through the system, companies can register, declare employees with loans, calculate deductions, and make payments.
With the new measures now in place, both employers and beneficiaries are being urged to comply or risk facing growing penalties.
