The Higher Education Loans Board (HELB) is set to be abolished and replaced by a newly proposed Tertiary Education Funding Authority under the Tertiary Education, Placement and Funding Bill, 2026.

Introduced in the National Assembly by Majority Leader Kimani Ichung’wah, the bill aims to consolidate student admission, loans, and scholarships into two main state agencies: the Tertiary Education Funding Authority and the Kenya Universities and Colleges Central Placement Service.

Centralized Placement and Funding

The new Placement Service will assume responsibility for placing eligible students into public tertiary institutions, maintaining updated data on accredited programs, institutional capacity, and approved costs. Admission and government financing will be closely linked, with funding available only to students placed by the service.

Deputy President Kithure Kindiki emphasized the reform's goal: "We are working to ensure every student who qualifies for university entry is fully funded regardless of their background." The Placement Service will also provide coordinated career guidance to prospective tertiary students.

Expanded Eligibility and Funding Sources

Unlike the current system, the bill proposes that all Kenyan students admitted to public or private tertiary institutions qualify for education loans, provided they meet legal requirements. The new authority will manage loan issuance, scholarship administration, and maintain a central database on funding and repayments.

To reduce reliance on government budget allocations, the authority will be empowered to raise funds through various channels including Treasury bills, bonds, concessional loans, and partnerships with commercial entities. It can also mobilize private capital from pension funds, investment schemes, sovereign wealth funds, and climate finance initiatives.

Loan Repayment and Enforcement

Students will be required to start repaying loans within one year after completing their studies, including principal and accrued interest. Formal sector borrowers must disclose loan status to employers, who will deduct repayments capped at 25% of salary. Employers must remit deductions promptly or face penalties.

The authority will have powers to recover unpaid loans as civil debts and can inspect businesses and request data to ensure compliance.

Institutional Transition and Governance

  • The new Tertiary Education Funding Authority will take over functions from HELB, the Universities Fund Board, and the TVET Funding Board.
  • The Placement Service will replace the existing placement board.
  • Staff from the existing agencies will be absorbed into the new institutions.
  • Both bodies will be governed by boards appointed by the President and Education Cabinet Secretary.

If enacted, the bill will repeal several existing laws, including the Higher Education Loans Board Act and relevant sections of the Universities Act and TVET Act, marking a significant overhaul of Kenya's tertiary education financing framework.