Starting September 2026, Kenyan students receiving higher education loans will have their salary deductions capped at 25 percent when repaying their loans, according to the Tertiary Education, Placement and Funding Bill, 2026.
The bill, set to replace the current Higher Education Loans Board (HELB) with the Tertiary Education Funding Authority (TEFA), stipulates that monthly deductions from graduates' earnings shall not exceed a quarter of their income. This measure aims to ease the financial burden on graduates entering formal employment.
Key Provisions of the Bill
- Full government funding for tuition and accommodation will be provided to all qualifying university and college students starting September 2026.
- Loan repayment begins within one year after completing studies, including accrued interest and charges.
- Graduates must disclose their loan status to employers upon employment.
- Employers are required to deduct monthly repayments from employees’ salaries and remit them to TEFA within nine days after each month ends.
- Employers who fail to remit deductions on time will incur penalties equal to 5% of the repayment amount for each month delayed.
This new framework is part of the government's broader strategy to make tertiary education accessible by removing upfront costs while ensuring sustainable loan recovery mechanisms.
