How The New Tax Returns Will Determine HELB Loan From 2023 Onwards 

Learn about Kenya's new approach to determining qualifications for HELB loans and scholarships based on tax returns and other financial information.

Aug 10, 2023 - 10:51
How The New Tax Returns Will Determine HELB Loan From 2023 Onwards 
education, student loans, scholarships, funding model

The government's decision to hinge the allocation of Higher Education Loans Board (HELB) loans and scholarships on tax returns and other data sources marks a new era in education financing in Kenya. This move has stirred debates, concerns, and even warnings from economists and education experts. But what exactly does this mean for students and families? Here are the key takeaways you need to understand about this profound shift in policy.

Key Takeaways

  • Data from KRA and NHIF will determine the HELB loans.
  • Income brackets will be defined by carefully examining tax returns and other information.
  • Concerns include affordability, vulnerability assessment, and more public participation.
  • Critics warn of potential pitfalls, while proponents argue for a more realistic assessment of financial status.

The New Funding Model Explained

Universities Fund Chief Executive Geoffrey Monari has disclosed the government's strategy to lean on data from state agencies like the Kenya Revenue Authority (KRA) and the National Health Insurance Fund (NHIF) to decide students' qualifications for loans and scholarships.

READ: Understanding the New Higher Education Funding Model in Kenya: An In-depth Guide

Determining Income Brackets

Monari explained the approach by stating, "For example, if you are paying Ksh1,700 for NHIF, it means you are at a certain income bracket, or if we go to KRA and look at your returns, it means you are at a certain income bracket."

Carefully examining tax data, health insurance, and retirement contributions will lead to a categorization that aligns students and their families with corresponding financial aid.

Applications and Background Check

Applications will contain students' educational backgrounds and delve into family income, employment, and other financial information. This multi-layered process is set to change the dynamics of education funding, taking into account a more realistic picture of a family's financial state.

Concerns and Criticism

The new system has yet to escape scrutiny. Critics and experts have raised concerns over various aspects.

The Affordability Question

With education potentially becoming expensive, many families could find it unaffordable. Ephraim Njenga, an economist, remarked, "Now they will be classified as able hence liable to pay full university fees of over Ksh250,000 per year. If you have two students in the university, you will struggle even with a good salary. Only the very rich wouldn't feel the pinch."

Assessing Vulnerability

Given the substantial number of Kenyans working in the informal sector, how will the government evaluate the vulnerability of applicants? This concern lingers and has yet to be addressed comprehensively.

Lack of Public Participation

There needs to be more public participation in the decision-making process. The haste with which the changes have been implemented has led to an outcry. Njenga warned, "Every sane Kenyan should oppose the experimentation in our education sector. It doesn't matter whether you can afford the shenanigans or not."

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The shift to using family tax and NHIF records to define HELB loan qualifications is undoubtedly a monumental change in Kenya's education sector. While it promises a more accurate reflection of economic status, it also brings challenges and unanswered questions. This could have far-reaching implications for families, students, and the education system. Only time will reveal if this is a step forward or a hurried experiment that may backfire.

Disclaimer: The information provided in this article is based on current policies and statements from government officials and experts. Changes and updates may occur, and readers are advised to consult relevant authorities for the most accurate and up-to-date information. stands proudly as a preeminent Publication Blog in Kenya, dedicated to delivering an unparalleled wealth of informative content across a multitude of subjects that resonate with both the Kenyan audience and the global community at large. Our unwavering commitment to quality and accuracy has made us a trusted resource for readers not only in Kenya but also in the United States and South Africa.