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MPs have raised concerns over high operational costs at the
Higher Education Loans Board (HELB).
They have urged the institution to channel more resources towards financing needy students instead of administrative expenses.
The lawmakers questioned HELB officials over the growing expenditure on operations, arguing that the agency's core mandate is to provide affordable loans and scholarships to students pursuing higher education.
They said every shilling spent on administration reduces the amount available to support deserving learners.
Teso South MP Mary Emaase questioned the substantial amount the university funding board was using in operations and staff expenses at the expense of loaning the students.
“Your core function is to give loans to students, we expected that all the money goes to loans but if you look at expenses, they are substantial,” she said.
The lawmaker called on HELB to streamline its operations, cut unnecessary expenditure and improve efficiency to ensure more students benefit from the loan scheme amid increasing demand for higher education financing.
“We would like you to reduce expenditure so that you have more money for your core mandate,” she said.
The concerns emerged as the Education committee met with the university funding body to discuss the budget implementation status.
HELB team was led by chief executive officer Geofrey Monari.
HELB documents show the board spent Sh629.9 million on operating expenses during the 2025-26 financial year against a budget of Sh809 million, even as it grappled with a growing funding shortfall for student loans.
The board also spent Sh601.9 million on staff expenses.
The agency defended the expenditure, saying the operational budget supported the administration of student financing programmes that benefited 823,691 university and TVET students during the year.
HELB said it achieved an overall budget absorption rate of 102 per cent, aided by improved loan recoveries and other internally generated revenues.
The board warned that demand for higher education financing continues to outstrip available resources.
It also disclosed that the cumulative funding gap has risen to Sh29.27 billion, comprising Sh10.69 billion in the 2024-25 financial year and Sh18.58 billion in 2025-26.
The situation is expected to worsen in the current financial year, with HELB projecting that 1.2 million students will require financial support against an approved budget that leaves a projected funding gap of Sh57.65 billion.
“The projected financing position for FY2026-27 indicates continued growth in demand, with an estimated 1.19 students requiring support with a projected loan requirement of Sh114.3 billion against an approved budget of Sh57.6 billion,” Monare told the Ccmmittee chaired by vice chairperson Eve Obara (Kabondo Kasipul).
“HELB continues to work closely with the Ministry of Education and the National Treasury to mobilise additional resources to sustain equitable access to higher education financing.”
