Home  Legal Framework |
| |
| Legal Framework |
| The Higher Education Loans Board was established by an Act of Parliament. The statute known as The Higher Education Loans Board Act, 1995 was legally established as Act number 3 of 1995. It came into existence on the 21st day of July 1995 through Kenya Gazette Supplement (Cap 213A).
The Board derives all it’s functions from the Act. These functions may be categorised into three, namely: - |
 |
Short term. |
|
Medium term. |
|
Long term. |
| |
| The short-term functions include among other things: |
|
To set the criteria and conditions governing the granting of loans including the rate of interest to be charged; |
|
To receive and consider all loan applications from eligible persons (students) who wish to pursue higher education ; |
|
To approve and/or reject such applications in accordance with the provisions of the Act; |
|
To determine the maximum number of eligible persons to be granted loans in any one particular year; |
|
To grant loans; |
|
To recover matured loans. |
| The medium functions include: |
|
To establish a Revolving Fund |
|
To solicit for funds and other assistance to promote the functions of the Board |
|
To enter into contracts with financial institutions for the purpose of disbursement and recovery of the loans. |
| Long-term functions include: |
|
To invest any surplus funds not currently required for the running of the Board in any investment authorised by law; |
|
To establish links with other bodies and /or organisations within and outside Kenya as considered necessary for the purpose of realising the goals of the Board. |
| Obligations of Employers: |
| |
The provisions of the Act put a legal obligation on all employers who have beneficiaries of the loan scheme in their employment. Requirements of such employers are as follows:
Upon employment of any loanee, employers are required to inform the Board in writing within a period of three months that they have employed a beneficiary of the loan scheme. The information furnished should include particulars of each and every loanee so employed. These particulars are, name of the loanee as used at university, present name (if changed,) university attended, year of admission, year of completion, faculty/course pursued and identity card number; university admission No. |
| |
|
| |
Note: The above information enables the Board access the loanees’ personal details for purposes of billing them. |
| |
|
| |
|
On receiving the billing schedule from the board the employer is legally bound to deduct from the wages or remuneration of the loanee the amount of any loan as shall be shown on the billing schedule; |
| |
|
The employer is also bound to remit to the Board every deduction from the loanees’ wages or remuneration by way of crossed cheque or as the Board shall advise; |
| |
|
Remittance for each month should be received by the Board on or before the 15th day of the following month. |
| |
|
All employers are notified that deductions in respect of The Higher Education Loan Scheme are statutory deductions (deductions authorised by a written law.) An employer does not require the authority of the employee to effect any deductions which are authorized by a written law as such authority is derived from the law and not the employee, (section 6(f)) of the Employment Act. Chapter 226 of the Laws of Kenya refers. |
| |
|
| |
To inform the Board now click here |
|
| |
| Effects of non-compliance: |
| |
Where the employer fails to deduct or after deducting fails to remit to the Board within 15 days of the following month, then the Board shall charge such an employer an amount equal to 5% of the total amount outstanding against the employer. The 5% charged is a penalty for delayed remittance;
Should the employer fail to notify the Board of having loanees in his employment within the three month period as stipulated, an employer will be liable to a penalty of not less than three thousand shillings for each month that he fails to notify the Board of such employment;
The Board’s loans inspectors are empowered to visit any employer to ascertain whether the employers’ obligations have or have not been fully complied with. During such inspections, the inspectors have been granted unlimited access to any documents in the custody of the employer, which documents the inspectors deem relevant in ascertaining whether there is or there is no compliance by the employer. Any employer who obstructs any inspection shall be guilty of an offence of which he shall be charged accordingly. |
| |
|
Home