University funding crisis as student loans shrink

University funding crisis as student loans shrink

University funding crisis as student loans shrink

Mwangi was among the thousands of new university students who have suffered as Kenya immersed in a crisis caused by a shortage of biting government-backed student loans and spiral payment default by a former student loans.
For Dennis Mwangi, a student excitement quickly disappeared after he arrived at the University of Nairobi last month. Top performers are orphaned from a sleepy village in central Kenya should go without delay disbursement of money for student loans - and when the money finally hit his account, it is much lower than the proposed or expected.
Students who joined the college from the end of last year had to suffer without the funds for more than three months.
The state of affairs last week pushed College Loan Board, or HELB, to cut the maximum credit allocation for new students by at least US $ 115, citing the financial crisis and the growing number of applicants.

figures

More than 110,000 students applied for the loan at the end of last year, up from the 2013 figure of 65,000, while the government has increased capitation relatively slow.
HELB said in a statement Tuesday that the near doubling of new students has left the body with no other choice but to cut the maximum annual allocation per student to US $ 555 from US $ 666 today. This is a big knock to thousands of first-year students. However, the minimum allocation remained unchanged at US $ 380.
First 110,000 applicants, only about half - 65,000 - are eligible for the loan. But not all will get a loan, said Charles Ringera, chief executive at HELB. This means they have to do with the financial difficulties of life on campus.



Educators say that the amount allocated per student is too low - an average of US $ 411 - compared to the high costs charged by the university each semester, estimated at US $ 700. Inflation over the past year an average of 5%.
"This has been tried three weeks. I had to adapt to the new environment, get accommodation huge hassle and delay in disbursement means I can not anything to start my new campus life," said Mwangi who received US $ 555 as a loan.
In the current fiscal year, which ends in July, HELB have been looking for US $ 170 million from the government as a capitation but only received US $ 28.3 million, a skinny 15% of demand.
Youth unemployment remains a major headache for the government of Kenya with more than 60% of the youth said to get out of work.
"We still encourage HELB to be converted into a financial institution that can offer a better service and timely," said Secretary of Education Professor Jacob Kaimenyi.
"Council is not able to serve a high number of applications of new students for the debt. This figure is far beyond our capacity," Ringera said, adding that the beneficiaries before the agency owes over US $ 88 million. This amount is more than seven times the annual allocation HELB received from the government every year.
Loan Agency is targeting to raise student finance budget quadrupled from US $ 63.5 million currently to US $ 224.7 million in 2018.
This means that the family must give priority to the basic needs, both boosted demand for student loans and lead to lower payments HELB loan earlier.
Delays in disbursement of the loan last week angered students across the East African country. They have plans to hold the country Monday boycott to protest the delay, forcing HELB to release loans to their accounts.
In the current fiscal year 2014-15, HELB intends to fund 215 739 students with a budget of US $ 95.5 million. This is expected to increase to 307 984 students with a budget of US $ 141.3 million in the financial year 2015-16.

lack of funds

University education in Kenya, a 2009 World Bank report shows, including the most expensive in the region. With more than 50% of households are considered poor Kenya, most parents and carers need additional funds to keep their children in the classroom.

The crisis has exposed the soft under-belly Kenya higher education system, which continues to grapple with concern the lack of funds and poor quality.
Now thousands of students who can not afford to lose the opportunity to lending in countries where higher education is increasingly becoming difficult for households to buy.
It is estimated that 60% of household budgets in Kenya entered into spending for education, with university studies take the biggest chunk of this since free primary education for all and secondary education partially subsidized.
Government statistics show that the total amount disbursed for graduate credit increased from US $ 49.7 million in 2012 to US $ 68.5 million in the current fiscal year. During the same period, graduate loans also increased from US $ 2.6 million to US $ 4.5 million.
HELB have pondered various options to raise funds to allow it to keep up with the increasing demand and prevent the over-reliance on shaky state funding.
"The target is to ensure coverage of 30% of students at the university level and that they are adequately funded to cover at least 50% of the annual fee costs. However, this is not feasible given the scarcity of resources," said Department of National Treasury in a paper detailing the expenditure plan for Kenyan education sector for 2015-16.
The agency said it hoped both to increase the proportion of students who funded 36% by 2018 and to increase the average amount per student from the United States is currently $ 435.3 US $ 588 per year. Currently, the board only supports 18% of all students enrolled in the college.
"It will require the mobilization of alternative resources to cover the gap."
The current crisis is putting a strategic plan HELB test for the next five years, which has been billed by educators as a transformative and bold.