The Higher Education Loans Board was established by the Higher Education Loans Board Act of 1995.
But its history goes back to 1952 when the then colonial government awarded loans under the then Higher Education Loans Fund to Kenyans pursuing university education in universities outside East Africa notably Britain, the USA, the former Union of Soviet Socialist Republics (USSR), India and South Africa.
Students who were pursuing university education in universities outside East Africa and were not on scholarships were advanced loans by the Government against securities such as land title deeds, insurance policies and other guarantees. However by 1974, provision of education had expanded dramatically as a result of the heavily subsidised primary and secondary education and the general yearning for education by most Kenyan families.
Consequently, the number of students seeking university education had grown to an extent that it was becoming increasingly difficult to adequately finance university education by providing full scholarships and grants by the Government. As a result, the government introduced the University Students Loans Scheme, which was managed by the Ministry of Education. Under the scheme, Kenyan students pursuing higher education at Makerere, Nairobi and Dar es Salaam universities received loans to cover their tuition and personal needs, which they would repay on completion of their education.
But the University Students Loans Scheme was plagued with a number of problems right on the onset. It lacked the legal basis to recover matured loans from loanees. In addition, the general public and university students wrongly perceived that the loan was a grant from the Government, which was not to be repaid. In order to address this problem, in July 1995 the Government through an act of Parliament established the Higher Education Loans Board to administer the Student Loans Scheme.
In addition, the Board is also empowered to recover all outstanding loans given to former university students by the Government of Kenya since 1952 and to establish a Revolving Fund from which funds can be drawn to lend out to needy Kenyan students pursuing higher education. The establishment of a revolving fund was also expected to ease pressure on the exchequer in ﬁnancing education.
Currently, the board derives its functions from the HELB Act Cap 213A, and undertakes disbursement of loans and bursaries and scholarships to university students in public and private universities .Its mandate has since been expanded to award loans and bursaries to Kenyan students’ in public TVET institutions and in universities Within the East African Community member states, Burundi, Kenya, Rwanda, Tanzania and Uganda.