HELB Seeks Powers to Freeze Bank Accounts of 316,000 Loan Defaulters

The Higher Education Loans Board (HELB) is pushing for legislative changes that would give it powers to access and freeze bank accounts belonging to over 316,000 loan defaulters in a bid to recover a staggering KSh 35 billion.

Appearing before the National Assembly’s Public Investment Committee on Governance and Education, HELB Chief Executive Officer Geoffrey Monari said the increasing number of loan defaulters is threatening the sustainability of the fund. For nearly three decades, HELB has been instrumental in supporting students from financially challenged backgrounds.

Monari disclosed that while 464,000 former students are actively repaying their loans, the board only manages to collect KSh 66 million—a figure he says is too low to sustain the revolving fund that finances current students.

“Only KSh 66 million is being repaid by 464,000 students over a typical 10-year period. Meanwhile, the 316,000 defaulters have not begun repayments. If we can recover from them, it would drastically improve our liquidity and support ongoing university education,” he said.

HELB is now seeking approval from Parliament to amend existing laws, proposing powers similar to those of the Kenya Revenue Authority (KRA), including the ability to freeze accounts of individuals who are doing business or employed yet fail to repay their loans.

“We need legislation allowing us to freeze bank accounts of self-employed former students who have the means but choose not to repay,” Monari said. “This would mirror the enforcement powers given to KRA and motivate compliance among defaulters with steady incomes.”

However, MPs on the committee questioned HELB’s current recovery strategies and called out its heavy reliance on Treasury funding as unsustainable.

Embakasi West MP Mark Mwenje asked, “Are you telling us all 316,000 defaulters are jobless? Where is your tracking system?”

Committee Chair Francis Sigei added, “We know there are many employed graduates and business owners. What mechanisms do you have to follow up with them?”

In response, Monari explained that HELB operates an inspectorate department tasked with enforcing compliance. Employers who fail to deduct and remit loan repayments are fined KSh 3,000 per student per month. For those working abroad, HELB collaborates with Kenyan embassies and the State Department of Immigration to track defaulters using their ID numbers linked to passports.

He acknowledged, however, that enforcing repayments among graduates in the gig economy and informal online sectors remains difficult.

“Many of these individuals earn irregular and unreported incomes. We appeal to them to do the right thing and repay their loans to ensure future students can benefit,” Monari urged.

Defaulters are also blacklisted with the Credit Reference Bureau (CRB), restricting their access to loans and financial services.

In the wake of HELB’s financial woes, MPs urged the board to diversify its funding sources and not over-rely on Treasury support.

“The Treasury is no longer a reliable lifeline. You must enhance your recovery methods,” the committee advised.

To further address the situation, the committee has summoned Education Cabinet Secretary Julius Ogamba and Higher Learning Principal Secretary Beatrice Inyangala to appear on June 18 to respond to HELB’s financial crisis and offer solutions moving forward.

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HELB Seeks Powers to Freeze Bank Accounts of 316,000 Loan Defaulters