Education stakeholders in Western Kenya have called for the removal of the proposed 4 per cent annual interest on student loans under the Tertiary Education, Placement and Funding Bill, 2026.

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The stakeholders argued that charging interest on loans taken by students from low-income households would increase the financial burden on graduates after completing their studies.

The proposal was made before the National Assembly Departmental Committee on Education during a public participation exercise on six education-related Bills in Bungoma and Busia counties.

Stakeholders at Alupe University in Busia said student loans should instead be interest-free, arguing that many beneficiaries depend on the loans to meet tuition, accommodation and upkeep costs.

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“The current loan interest of 4 per cent per annum on the outstanding balance, in addition to a KES 1,000 ledger fee, is detrimental. Most students who apply for these study loans come from low-income households and rely on the financial support to cover tuition, accommodation and upkeep,” youth leader Harriet Opoma told the committee.

The proposed financing framework has also attracted scrutiny over when graduates would be required to begin repaying their loans. The Bill provides for repayment to commence within one year after completion of studies, together with applicable interest and other charges.

Stakeholders at Kibabii University in Bungoma proposed that repayment should instead begin after a graduate secures employment, arguing that completing studies does not guarantee that a graduate will find work within one year.

Kibabii University Deputy Vice Chancellor for Academics and Student Affairs Joseph Ogendo proposed that the provision be amended to require repayment within one year of being employed, including where there is proof of gainful employment.

The stakeholders also opposed a provision allowing the authority to deduct up to 25 per cent of a loanee's emoluments when recovering the loan.

Kibabii University proposed reducing the maximum deduction to 10 per cent, with Ogendo describing the 25 per cent ceiling as excessively punitive.

📰 Source: Kenyans.co.ke