The Higher Education Loans Board (HELB) has clarified that graduates must begin repaying their student loans within one year of completing their studies, regardless of whether they have secured formal employment.
In a notice issued on Wednesday, November 11, the Board said unemployed graduates, self-employed borrowers and those running small businesses are also expected to start servicing their outstanding loans.
HELB encouraged borrowers without formal employment to make payments based on their financial abilities, recommending a minimum monthly baseline of Ksh1,500 for informal and low-income earners.
HELB Recommends Ksh1,500 Monthly Payments for Unemployed Graduates
The Board urged borrowers to start with manageable amounts and maintain consistent payments rather than wait until they secure formal employment.
“Your hustle is valid, and so is your repayment plan. Whether you’re selling jeans, running a kiosk, or freelancing, you can still repay your HELB loan. Start small, stay consistent, and help the next student reach their dream,” HELB stated.
The Board reiterated that loan repayment obligations begin within one year of completing studies, whether a beneficiary is formally employed, self-employed or operating a business.
It also clarified that the Ksh1,500 figure is a recommended baseline for informal and low-income borrowers.
HELB Allows Graduates to Make Voluntary Loan Repayments
Borrowers can also make voluntary payments before or after completing their studies to reduce their outstanding loan balances.
According to the Board, graduates can make payments gradually as they work towards clearing their debts.
Those who are financially able can pay more than the recommended amount, potentially reducing the time required to clear their loans.
Why Some HELB Beneficiaries Pay Ksh5,000 Monthly
Although HELB recommends Ksh1,500 for informal and low-income earners, some borrowers, particularly those in formal employment, report making monthly repayments of up to Ksh5,000.
The amount a borrower is expected to pay can vary depending on their outstanding loan balance and repayment circumstances.
Beneficiaries who received substantial undergraduate and postgraduate loans may face higher monthly repayment requirements.
Similarly, borrowers who have spent several years in default may face increased deductions as HELB seeks to recover outstanding amounts, including applicable penalties.
In some cases, employers may be directed to deduct higher amounts from employees’ salaries to facilitate loan recovery.
Why Paying More Towards Your HELB Loan Can Reduce Interest
Some graduates also choose to make payments above their expected monthly deductions to clear their loans faster.
HELB applies a reducing-balance method when calculating interest. Under this approach, interest is calculated on the remaining loan balance.
Consequently, making additional payments can reduce the outstanding principal and lower the interest accumulated over time, subject to the applicable loan terms.
Borrowers who can afford higher repayments may therefore clear their loans earlier than those making only the minimum recommended payments.
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