The determinant of sustainability of students loan schemes: case study of higher education loans board

Abstract

The financing of Student loans schemes has been a major challenge to governments all over the world including Kenya where loans are administered through Higher Education Loans Board (HELB – hereafter referred to as the Board).This has resulted from reduced government funding, increased student population, overdependence on financing by students from the schemes, slow economic growth, increased education costs, the hidden subsidies in most schemes and the death of recipients especially resulting from HIV/AIDS pandemic. This has led to the board’s realization of challenges that must be put into account during its operations. These challenges include the need to achieve selfsustainability through mobilization of funds, increased recoveries through reduced default rate and entering into strategic partnerships that can assist in netting of defaulters. Over time, the board has made major achievements as it has embarked on an aggressive campaign and public education aimed at recovering the outstanding loans which has led to increased recoveries to over 55%. This has led to an increase in the number of students accessing the loans from both the public and private universities. The above notwithstanding, there is need for the board to identify new sources of funds to counter the ever rising demand for student loans. Lessons learnt from loan schemes in other countries can be used to enhance both the operational and financial sustainability of the board. The strategies so adopted by the said successful schemes can be replicated at HELB. The Project is therefore a Descriptive research on the operational and financial sustainability of the Higher Education Loans Board. The study’s main objective is to establish the operational and financial sustainability of the Higher Education Loans Board (HELB). A review of related literature was conducted, which comprises, background of student loan financing, loan default, success and failure of student loans schemes and other literature relating to issues on student loan financing. The researcher used secondary data. Secondary data was obtained from relevant literature from various sources including financial statements and reports at HELB. Conclusions, implications, limitations and recommendations were completed and statements were made on the findings.