Kenyan Students Could Be Freed from Interest on Government Education Loans
Nairobi, 26 May 2026
A growing push in Kenya’s parliament to scrap interest on student loans reveals a stark reality: unemployed graduates face debt that can double in just three years.
A Debt That Grows Before a Graduate Earns a Single Shilling
For many Kenyan university graduates, the journey into adulthood begins not with financial independence, but with a growing debt. Under the current terms set by the Higher Education Loans Board (HELB), undergraduate and TVET (Technical and Vocational Education and Training) students are charged a subsidised interest rate of four per cent per annum on outstanding loan balances [1]. On top of that, borrowers pay an annual administrative fee of Sh1,000 [1]. If a graduate cannot find work — a reality that is increasingly common in Kenya today — missed repayments trigger penalty charges of up to Sh5,000 per month [1]. For a young person who has not yet earned a salary, this is a debt that compounds rapidly. According to reporting from The Star Kenya published on 26 May 2026, unemployed Kenyan graduates can see their student debt double within just three years due to accumulating interest and penalties [1][3].
The Numbers Behind the Loans
The scale of HELB lending makes this policy debate nationally significant. Provisional data from Kenya’s 2026 Economic Survey shows that during the 2025/26 academic year, a total of 716,417 students received Sh62 billion in HELB loans [1]. To understand how much money that is per student on average, the calculation is: 86541.777. However, the system is showing signs of financial stress. Total capitation and loan repayments fell to Sh31.57 billion in 2025/26, down from Sh36.6 billion in 2024/25 [1]. That represents a significant drop, calculated as: -13.743. More specifically, loan repayments alone dropped by 21 per cent, falling from Sh5.2 billion in 2024/25 to Sh4.1 billion in 2025/26 [1]. HELB itself has acknowledged the mechanics of repayment, stating: “The good thing is, as you start paying your loan, the amounts reduce” [1]. Yet the critical issue is that many graduates are not in a position to start paying at all.
Lawmakers Move to Abolish Interest Entirely
Two prominent Kenyan lawmakers have now taken up the fight to eliminate HELB loan interest altogether. Narok Senator Ledama Olekina has called publicly for the scrapping of the four per cent annual interest rate, making a pointed appeal directly to President Ruto [1][3]. In his own words, reported by The Star Kenya on 26 May 2026: “We must scrap interest on Helb loans. Our youth deserve opportunity, not debt. When jobs are scarce, imposing a four per cent interest burden is unjust, especially on loans funded by taxpayers. President Ruto must act on this now” [1]. Senator Olekina’s proposal goes further than simply removing interest — he has also called for the removal of the requirement that graduates must obtain HELB clearance before applying for Public Service Commission (PSC) jobs, and for all education bursaries to be consolidated into a single fund [1]. As reported by the Hivileo news outlet on 25 May 2026, Olekina has specifically highlighted rising unemployment and broader economic pressure as the reasons graduates are struggling to repay their debts [3].
A Legislative Bill Already in Motion
Senator Olekina is not acting alone. On 4 May 2026, Embakasi East Member of Parliament Babu Owino introduced a formal legislative bill in Kenya’s parliament to scrap HELB loan interest entirely [1]. Owino framed his argument in stark terms about the role of government: “Helb interest should be scrapped off because the government’s role is to educate you, but the government gives you a loan. So, who should educate whom?” [1]. He went further, stating: “The government should educate you, not your parents” [1]. It is worth noting that Jielimishe loans — a separate HELB product aimed at a different borrower category — currently carry a much higher interest rate of ten per cent per annum, compared to the four per cent applied to undergraduate and TVET loans [1]. Any reform bill would need to clarify whether it applies to all HELB products or only to specific loan types [alert! ‘The source does not confirm whether Babu Owino’s bill covers all HELB loan categories or only undergraduate and TVET loans’].
What This Means for Students — Including Refugees in Kenya
For students currently receiving or planning to apply for HELB loans, understanding how the system works right now is essential — regardless of what reforms may eventually pass. HELB loans are available to Kenyan citizens enrolled in accredited higher education institutions, including universities and TVET colleges [GPT]. Applications are typically submitted online through the HELB portal at helb.co.ke, with application windows opening each academic year [GPT][alert! ‘Specific 2026 application deadlines were not confirmed in the provided sources — applicants should check helb.co.ke directly for current deadlines’]. Repayment is expected to begin one year after completing studies, and borrowers are required to obtain a HELB clearance certificate before taking up certain public sector jobs — a requirement that Senator Olekina has specifically called for the removal of [1]. For refugee students based in Kakuma and Kalobeyei who are pursuing Kenyan higher education opportunities — including DAFI scholarship placements and local university admissions — this debate carries particular weight [GPT]. While HELB loans in their current form are not directly accessible to non-citizens [GPT][alert! ‘HELB eligibility for refugee students has not been confirmed in the provided sources — refugee students should contact HELB directly or consult UNHCR Kenya for guidance’], any reform that makes Kenyan tertiary education more affordable or changes how funding structures are designed could indirectly influence the broader policy environment for refugee access to higher education [GPT]. With Babu Owino’s bill already tabled as of 4 May 2026, and Senator Olekina’s public campaign intensifying as of 26 May 2026, the coming parliamentary sessions will be critical to watch [1].