Wednesday, December
03, 2025 - The High Court has ruled that the Higher Education Loans Board
(HELB) cannot demand repayment amounts exceeding twice the principal borrowed,
offering relief to thousands of Kenyans burdened by ballooning student loans.
The judgment, delivered by Justice A. Mabeya, followed a
petition filed by three former students who argued that HELB had imposed
excessive interest and penalties.
One petitioner revealed that a loan of Ksh82,000 had grown
several times over due to accumulated charges.
The petitioners claimed that this violated their
socio-economic and consumer rights under Articles 43 and 46 of the
Constitution.
While the Court did not strike down Section 15(2) of the
HELB Act, which allows penalties, it ruled that the provision must be read
alongside the in duplum rule.
This principle limits interest and penalties to a maximum
equal to the principal amount. Beyond that threshold, no further charges may
accrue.
Justice Mabeya noted that many graduates struggle to secure
employment immediately after school, making indefinite compounding of interest
unfair and contrary to HELB’s purpose.
He emphasized that borrowers remain obligated to repay their
loans, but only within the legal limits set by the in duplum rule.
HELB had argued that the in duplum rule applied only to
commercial banks, but the Court disagreed, ruling that the principle serves
public interest and applies to all lenders, including statutory bodies.
Justice Mabeya concluded that HELB’s practice of allowing
penalties to exceed the principal discriminated against borrowers, violating
Article 27 of the Constitution on equality and non-discrimination.
HELB, which operates a revolving fund to support current
students through repayments from past beneficiaries, has faced mounting
defaults.
CEO Geoffrey Monari recently disclosed that over 380,000
defaulters collectively owe Ksh42 billion, with professionals such as lawyers,
doctors, and engineers among the worst offenders.
Teachers, however, were cited as the most consistent in
repayment.
The board has intensified recovery efforts, listing 120,000
defaulters with Credit Reference Bureaus and seeking legal reforms to freeze
accounts of those unwilling to pay.
The Kenyan DAILY POST
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