Elected leaders contribute a big chunk of defaulters to the Higher Education Loans Board (HELB) crippling its operations and killing many student's careers.
HELB chief executive Charles Ringera told MPs that the Fund is struggling to collect money from honourable legislators, making it difficult for other needy students to advance their studies.
Ringera revealed that some 140,000 students in Universities and TVET colleges may miss out on the funding to a tune of Sh5.7 billion.
''At the moment we are cashless and anytime the money comes the following day it is auctioned to nine authorised banks for disbursement,'' Ringera said.
Ringera was speaking while appearing before the Public Investment Committee on Education and Governance on Wednesday.
''Even with this Parliament what I can complain about are the once who have failed to repay. The MPs are men and women of means and maybe what we need to encourage is for them to come and pay the loans,'' said Ringera.
Sotik MP Francis Sigei scoffed at legislators who fail to remit their loans saying they are setting a bad precedent to the public.
''MPs who do not pay their Higher Educations Loans Board loans are painting us in bad light. We should be leading by a good example,'' Sigei said.
Sigei reiterated that defaulting to pay the loans deny other needy students from accessing the loans urging the leaders to be forced to pay to enable the commission stay afloat.
''When you pay the money, you enable the board to lend to other deserving students to advance their education. Chair, you need to write to the National Assembly and the Senate on this issue so that you can be assisted to recover the money,'' Sigei said.
Ringera however said that in the recent past, there has been a high level of compliance across the market with some employers adhering to the implementation of loans submission.
He warned that the employers are equally liable for any loan default.
Ringera revealed that the waivers given through the credit policy has gone a long way in recovering money from the students citing the 100 percent waiver during the Covid-19 pandemic.
''During the Covid-19 waiver, we collected Sh800 million extra, making us in last year alone, a net a record of Sh5.2 billion,'' he stated.
Ringera noted that if the Parliamentary Service Commission fail to recover the loans, a penalty of Sh3, 000 per month on the loanee and also the employer will continue to be surcharged.
Ringera further said anytime the loanee fail to engage her account the system charges Sh5, 000.
The committee chairman Jack Wamboka, who is also Bumula MP, vowed to ensure all pending bills in government institutions are paid by all defaulters.
''This is a trend in most of our government institutions across the country and we must stop it. We will ensure we force them to pay,'' Wamboka said.
Ringera also blamed the government for existing gap of Sh4.5 billion last year to underfunding saying the board ran out of funds, from the supplementary budget presented to the national Treasury.
He said this year's budget of Sh14.8 billion requires the board to have at least Sh7.4 billion to disburse to learners in a half year when schools opens.
He said the government has always been releasing Sh3 billion in August, a month before institutions of higher learning opens for the first semester.
''The quarterly exchequer disbursement is Sh3 billion with our collection of Sh1.2 billion. This is far below the Sh7.8 billion required to service our loans demand,'' Ringera said.
To resolve this, the agency has signed a deal with the government to be releasing funds twice annually rather than four times to adequately meet the demands of learners.
''We are working on a programme with the Treasury to see how the cash flow will be released from the exchequer. We have emphasised to them that if it can be tied to the academic calendar of the universities and colleges it will be a good help for us,'' he stated.
Ringera noted that in September last year, the state released Sh5.6 billion, and with the Sh4 billion collection from loans, the agency was able to settle all its dues.
''What came in the second semester from the government of Sh2.5 billion was inadequate to meet the high demand of learners. Currently, fresh graduates are required to start repaying their loans one year after leaving the institutions," said Ringera.
