Over 281,000 Kenyan Students Default on HELB Loans Totaling Nearly Sh40 Billion
The Higher Education Loans Board, known as HELB, has reported that more than 281,000 former students have failed to repay their education loans.
The total amount owed now stands at almost Sh40 billion. This large number of defaults has raised serious concerns about the future of the student loan system in Kenya. Many young people borrowed money to attend university or college with the hope of building better lives after graduation, but a growing number are struggling to make even the smallest payments on time.
The main reason for these widespread defaults appears to be the shortage of available jobs. In 2024, the country added only about 75,000 new formal jobs. At the same time, the number of graduates leaving universities and colleges has continued to rise each year. This gap between the number of young people entering the workforce and the limited opportunities available has left many unable to find steady employment. Without regular income, repaying loans becomes extremely difficult, even for those who are willing to do so.
The situation is putting extra pressure on both the students and the government. HELB relies on loan repayments to help fund new loans for future students. When so many borrowers fall behind, it affects the board’s ability to support the next generation of learners. At the same time, defaulting graduates face long-term challenges such as damaged credit records and difficulties in securing other financial services later in life.
Kenya’s leaders and education officials are now looking closely at ways to ease the burden. Possible steps include creating more job opportunities for young people, offering flexible repayment plans that match the slow start many graduates experience, and working with employers to provide better entry-level positions. Until the number of good jobs grows to match the number of graduates, the problem of loan defaults is likely to remain a major issue for the country’s higher education system.
