Reprieve for Beneficiaries as High Court declares HELB Penalties Unconstitutional
Aug 23rd, 2022

Reprieve for Beneficiaries as High Court declares HELB Penalties Unconstitutional

The High Court has found a petition against HELB to be merited and issued several declarations. Advocate Ben Njeru and other petitioners had moved to court to decry the punitive charges by The Higher Education Loans Board.

Higher Education Loans Board, as enacted under the HELB Act in 1995, was envisioned as a social protection fund, not a bank, its goal was never to make profits. It is a statutory body charged with social protection. Its mission is to enable healthy continuous access to credit for Kenyans pursuing tertiary education. Upon completion of school, loanees are expected to pay back the money owed so that subsequent generations of learners can acquire the same credit.

The quandary however is that this model is based on the serious assumption that once one graduates, they land a job and start paying back their HELB Loan immediately. In a country where the unemployment rate among youth stands at around 40%, this assumption is far-fetched. It is not practicable to expect graduates to start repaying the loan a year after campus or college.

The HELB Act charges a modest interest rate of 4% per annum and grants a maximum repayment period of 12 months on undergraduate loans. The bone of contention, however, comes in section 15(2) of the HELB Act which stipulates that loanees, who default on loan repayment, including those who are employed, shall be guilty of an offense and liable to a fine of not less than five thousand shillings in respect of each loan deduction that remains unpaid. 

This is the section of the HELB Act that the petitioners were hoping The High Court would find unconstitutional. It is unfair to impose such exorbitant fines on people still struggling to attain financial stability.

In a ruling delivered by Judge A. Mabeya on 19th August 2022, the following orders were given:

  • A declaration against HELB that by imposing interest and penalties or fines that exceed the principle amount, HELB is in contravention of Article 43(1)(e)(f) and article 27 of the Constitution of Kenya.

  • A declaration that section 15(2) of the HELB Act is unconstitutional to the extent that it leads to interest rates and fines becoming more than the principal amount advanced.


  • A declaration that HELB is not entitled to recover from the petitioners or its loanees an amount exceeding double the amount advanced in contravention of the in duplum rule.

This ruling is very much welcome, especially at such a time when recent graduates are glaring into the eyes of an economy on its deathbed. The unemployment rate is at its peak and neither is the sky-high inflation rate budging. Unfortunately, for those who are paying their HELB loans that already exceeded the principal amount, the law will not operate retrospectively.

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