Guarantors who stand in for students when applying for loans from Higher Education Loans Board (HELB) will be required to repay the loans incase the students default.
This is according to a report set to be tabled by the National Assembly Committee on Education that seeks to introduce penalties for loan guarantors for students who have defaulted or unable to repay their HELB loans.
The committee seeks fo to draft the report on the HELB Amendment Bill 2022, which seeks to amend several provisions of the HELB Act 1995.
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The bill which is sponsored by Machakos Woman Representative Joyce Kamene, provides that a student can request a guarantor to guarantee any loan issued to them.
This will therefore act as security in case the student defaults or is unable to pay his/her HELB loan, the guarantor is liable to pay the amount together with the interest accrued over the period.
However, if a guarantor is notified of payment and either fails or declines to repay the loan and interest after a student has defaulted, the guarantor shall be guilty of an offence with a jail term not exceeding three years or a Ksh10,000 fine in addition to the loan.
“Any person guilty of an offence under this Act shall, where no other penalty is prescribed, be liable to a fine not exceeding Ksh10,000 or to imprisonment for a term not exceeding three years.”
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The bill also seeks to scrap the age limit to allow students below 18 years to access financing for their education which will require the students to have their parents or guardians co-sign the loan agreement.
This comes as President William Ruto’s administration seeks to abolish HELB and replace it with the National Skill and Funding Council (NSFC) to improve the loan provisions in the education sector.
