The Higher Education Loans Board (HELB) has announced an 80 per cent waiver on outstanding penalties for borrowers who clear their loan balances in full, giving thousands of defaulters a chance to reduce the cost of settling their student debt.
HELB says more than 380,000 beneficiaries have defaulted on loans worth nearly Ksh42 billion. More than 120,000 borrowers have already been listed with Credit Reference Bureaus.
With penalties adding Ksh5,000 for every missed instalment, the new waiver could provide significant relief to borrowers who can raise enough money to settle their outstanding balances.
HELB 80% Penalty Waiver Targets Borrowers With Growing Student Debt
HELB announced the 80 per cent penalty waiver on Thursday, August 13, urging borrowers to clear their outstanding loan balances in full.
The waiver applies to accumulated penalties rather than the principal loan balance. Borrowers must therefore settle their full outstanding loan balance to qualify for the penalty reduction.
HELB described the offer as an opportunity for defaulters to clear their debts and improve their financial position.
The announcement comes as the loans board faces a major repayment challenge involving hundreds of thousands of former students.
According to HELB, more than 380,000 beneficiaries have defaulted on their student loans, with the affected borrowers owing the board close to Ksh42 billion.
More than 120,000 borrowers have already been listed with Credit Reference Bureaus (CRBs).
| HELB Loan Repayment Data | Figure |
|---|---|
| Loan defaulters | 380,000+ |
| Outstanding debt | Nearly Ksh42 billion |
| Borrowers listed with CRBs | 120,000+ |
| Penalty for missed instalment | Ksh5,000 per month |
| Penalty waiver | Up to 80% |
| Qualification | Full loan settlement |
The numbers highlight the scale of the repayment problem facing HELB and the financial pressure affecting former students.
For borrowers who have accumulated penalties over several months or years, the waiver could substantially reduce the additional amount they need to pay once they settle the principal and other applicable outstanding amounts.
HELB Defaulters Face CRB Listing and Rising Penalties
Borrowers who ignore their repayment obligations can face consequences beyond the growing loan balance.
HELB charges a Ksh5,000 monthly penalty for each missed instalment, meaning unpaid accounts can become increasingly expensive over time.
Persistent default can also lead to listing with Credit Reference Bureaus.
A negative CRB listing can make it more difficult for borrowers to access loans, mortgages and other forms of credit.
This can create another financial burden for graduates who already struggle with employment, business income or other household expenses.
HELB has previously warned chronic defaulters that it could publish their names and photographs in newspapers.
The board has also indicated that it works with employers and the Kenya Revenue Authority to trace borrowers who have failed to honour their repayment obligations, including people working in the informal sector.
The latest waiver therefore gives defaulters a financial incentive to address their outstanding obligations before penalties continue increasing.
However, borrowers should confirm their exact balances and eligibility directly with HELB before making large payments.
How Borrowers Can Repay HELB Loans
HELB provides several channels through which borrowers can check and repay their loans.
One option is the *642# USSD service, where borrowers can log in, select loan repayment and follow the instructions to make payments through mobile money.
Borrowers can also use the HELB Mobile App to confirm their details, check the amount owed and complete repayment through mobile money.
Another option is the Loanee Self-Serve Portal, where borrowers can access their accounts, select loan repayment, enter the amount and choose their preferred payment method.
Borrowers who settle their loans should also obtain official clearance from HELB.
The board remains responsible for confirming that a loan has been fully settled, meaning borrowers should not assume that an employer's records alone constitute proof of clearance.
The HELB 80% penalty waiver could therefore provide a valuable opportunity for thousands of defaulters, but the biggest benefit will go to borrowers who can raise enough money to settle their outstanding balances.
With nearly Ksh42 billion owed by more than 380,000 defaulters, HELB's latest move could also help the board recover significant funds while allowing former students to escape mounting penalties and the consequences of prolonged default.
