The Higher Education Loans Board is grappling with a growing repayment crisis, as its portfolio of defaulted student loans has climbed to Sh33.2 billion by the end of June 2025.

In a briefing to Parliament’s Education Committee, HELB revealed that over 292,000 loan accounts have fallen into default, with officials citing economic hardship and widespread youth unemployment as key drivers of the trend.

Out of the 1.03 million loan accounts that have matured so far, only about 245,000 have been fully settled, amounting to Sh31.6 billion in recoveries. Another 490,000 accounts are still active and being serviced, with a combined value of Sh69.4 billion.

The board noted that many graduates face difficulties repaying their loans due to limited job opportunities, rising inflation, and unpredictable incomes, which continue to erode their financial stability.

Further complicating recovery efforts, HELB pointed to technical issues with the eCitizen platform such as reconciliation delays, lack of automated payment solutions like standing orders, and the absence of repayment options for Kenyans living abroad.

Additionally, HELB raised concern over legal limitations that prevent it from accessing crucial third-party data, including from telecom companies, utility providers, and government health agencies. These restrictions, it said, make it harder to track borrowers or determine financial need accurately.

The board also warned that student numbers have surged in recent years without a matching increase in funding, creating further pressure on its financial capacity.

Despite these challenges, HELB says it is pursuing reforms and strategic partnerships among them sector-specific loan schemes in collaboration with ministries and development partners aimed at enhancing loan recovery and supporting national economic goals under Vision 2030.