The High Court has barred the Higher Education Loans Board (HELB) from imposing interest, penalties or fines that exceed the principal amount of the loan one owes the agency.
Following a petition filed by Anne J. Mugure, Davis Nguthu and Wangui Wachira, justice Alfred Mabeya termed the move unconstitutional.
The three argued that HELB was charging exorbitant interest penalties which often grew beyond double the principal amounts owed thereby making repayment of the loan a tall order for them.
The petitioners had taken a HELB loan on diverse dates to support their undergraduate studies but the hefty interest and penalties the loan had accumulated made repayment difficult.
“It was therefore contended that the debts had doubled the principal amounts. That the interest rates and penalties were exorbitant and contravened the beneficiaries’ socioeconomic rights as enshrined in the Constitution and made it difficult for them to repay the loans,” stated Judge Mabeya.
He further noted that the board denied issuing clearance certificates to loanees who couldn’t service their loans because of the hefty interest and penalties thus denying them employment both in the public and private sector yet the youth are considered vulnerable pursuant to Article 55 of the Constitution.
He further declared section 15(2) of the HELB Act unconstitutional to the extent that the interest rates and fines exceed the principal amount advanced.
In November 2019, HELB threatened to publish the names and photos of loan defaulters in newspapers, a move the body used to encourage loan defaulters to pay their loans.
In March 2022, the body announced a 100 per cent Covid-19 penalty waiver dubbed #KamilishaMalipoYaHELB to encourage loanees to repay their loans after the effects of the Covid-19 pandemic on the economy.
This article was first published by Capital News.
