Higher Education Loans Board Act

Section 1. Short title Section This Act may be cited as the Higher Education Loans Board Act.

Section 2. Interpretation Section In this Act, unless the context otherwise requires— "Board" means the Higher Education Loans Management Board established by section 3 of this Act; "Commission for Higher Education" means the Commission established by section 3 of the Universities Act; "eligible person" means any person, who being a Kenyan citizen, has attained minimum entry requirements and has been admitted to a recognized institution of higher education to a full time course of at least one year's duration; "Fund" means the Higher Education Loans Fund established by section 11 of this Act; "Higher education" means any course of education offered by an institution above the standard of Kenya Certificate of Secondary Education or any equivalent certificate approved by the Board; "Loanee" means any person granted an education loan either under the Higher Education Loans Fund Act, 1952 (Repealed) or any person granted an education loan by the Ministry of Education from 1974 through the National Bank of Kenya or any person granted an education loan by the Ministry of Education through the National Bank of Kenya and the Kenya Commercial Bank from 1989 until commencement of this Act, o...

Section 3. Establishment of the Board Section 3(1) There is hereby established a Board to be known as the Higher Education Loans Management Board which shall be a body corporate with perpetual succession and a common seal. Section 3(2)(a) suing and being sued; Section 3(2)(b) taking, purchasing or otherwise acquiring, holding, charging and or disposing of movable and immovable property; Section 3(2)(c) entering into contract Section 3(2)(d) borrowing and lending money; Section 3(2)(e) doing or performing all such other things or acts necessary for the proper performance of its functions under this Act, and which may lawfully be done or performed by a body corporate. Section 3(3) Spent

Section 4. Constitution of the Board Section 4(1)(a) a Chairperson appointed by the President; Section 4(1)(b) the Secretary to the Commission for Higher Education; Section 4(1)(c) the Principal Secretary, Ministry of Education or his representative; Section 4(1)(d) the Principal Secretary, Ministry of Finance or his representative; Section 4(1)(e) the Chairperson of the Vice-Chancellors Committee for Public Universities; Section 4(1)(f) a representative of Vice-Chancellors or Principals of the Private Universities; Section 4(1)(g) the Executive Director of the Federation of Kenya Employers; Section 4(1)(h) the Chairperson of the Kenya Bankers' Association; Section 4(1)(i) two other persons appointed by the Cabinet Secretary; and Section 4(1)(j) such other persons not being more than three, as the Board may co-opt from time to time. Section 4(2) The members of the Board referred to in paragraph (e) to (h) shall be appointed by the Cabinet Secretary. Section 4(3) The members of the Board other than ex officio members shall hold office for a period of five consecutive years and may be eligible for re-appointment. Section 4(4)(a) if not being an ex officio member, he submits his resig...

Section 5. Secretary to the Board Section 5(1) There shall be a Secretary to the Board who shall be appointed by the Cabinet Secretary and who shall be the chief executive of the Board, and shall be responsible for the management of the day-to-day activities of the Board. Section 5(2) The Secretary shall hold office for six years and shall be eligible for re-appointment. Section 5(3) The Secretary shall be the head of the Secretariat and shall be responsible to the Board in ensuring that the Secretariat satisfactorily carries out duties and performs functions assigned to it by the Board. Section 5(4) The Secretary shall, be an ex officio member of the Board and shall have no right to vote at the meetings of the Board.

Section 6. Functions of the Board Section to formulate sound policies for regulating the management of the Fund;

Section 7. Committees of the Board Section 7(1)(a) the Loans Disbursement and Recovery Committee; Section 7(1)(b) the Finance, Staff and General Purpose Committee; and Section 7(1)(c) any other committee that the Board deems appropriate. Section 7(2) The membership of each Committee shall be five and the quorum shall be three members present Section 7(3) Each Committee shall elect its own Chairperson. Section 7(4) All Committees of the Board shall have powers to co-opt such members not exceeding two as necessary. Section 7(5) Subject to this Act, the Committees shall regulate their own proceedings.

Section 8. Delegation of powers Section 8(1) The Board may delegate to any of its Committees such of its powers and duties as it may deem necessary. Section 8(2) Except with the written authority of the Board, no act of a Committee shall be binding on the Board until it has been approved by the Board. Section 8(3) Any person aggrieved by a decision of a Committee, may appeal to the Board within sixty days from the date of such decision and in every such appeal, the decision of the Board shall be final and not subject to a further appeal in any court.

Section 9. Officers and agents of the Board Section The Board may by a resolution either generally or in any particular case delegate to any member, officer, employee or agent of the Board the exercise of any of the powers or the performance of any of the functions or duties of the Board as authorized by this Act.

Section 10. Meetings of the Board Section 10(1) The Chairperson shall preside at all the meetings of the Board unless he is absent from a particular meeting in which case the members present shall elect one of themselves to preside at that particular meeting or part thereof. Section 10(2) The Board shall meet at least four times in each year, but the Chairperson shall, upon requisition in writing by at least five members, convene a special meeting of the Board at any time. Section 10(3) The quorum necessary for transaction of the business of the Board shall be five members: Provided that the quorum at any requisitioned meeting shall be any number of the members of the Board entitled to attend such meeting and the meeting shall be free to adopt any procedure thereat suitable in the circumstances. Section 10(4) All questions at any meeting of the Board shall b determined by a simple majority of the votes of the members present and voting. Section 10(5) The Chairperson shall, in case of equality of votes, have an original and a casting vote. Section 10(6) The Secretary shall cause minutes and proceedings of all the Board's meetings to be entered into the Minute-Book kept for that purp...

Section 11. Establishment of the Fund Section 11(1) There is hereby established a Fund to be known as the Higher Education Loans Fund which shall be managed and administered by the Board. Section 11(2) The object and the purpose of the Fund shall be to provide funds to be used for granting loans to assist Kenyan students to pursue higher education at such institutions within and outside Kenya, recognized by the Commission for Higher Education.

Section 12. Revenue and Expenditure of the Fund Section 12(1)(a) sums of money which may from time to time be voted by Parliament for that purpose; Section 12(1)(b) sums which represent the repayment of the capital and interest of any loan granted by the Board or any other loan made prior to the enactment of this Act by the Ministry of Education; Section 12(1)(c) income from any investment made by the Board; Section 12(1)(d) any sums of money borrowed by the Board with the consent of the Cabinet Secretary; Section 12(1)(e) any gifts, donations, grants and endowments made to the Fund. Section 12(2) There shall be paid out of the Fund any expenditure approved by the Board and incurred in connection with the administration of the Fund.

Section 13. Administration of the Fund Section 13(1) Every student wishing to be considered for the grant of a higher education loan shall make an application to the Board in the prescribed form. Section 13(2) Every student who has been awarded a higher education loan shall be issued with a Loanee Identification Personal Account Number by the Board (L.I.P.A.) Section 13(3)(a) in filling a loan application form, knowingly makes any false statement, whether orally or in writing, relating to any matter affecting his request for a loan; or Section 13(3)(b) being required under paragraph (a) to answer any questions, furnish any information or particulars or produce any document or paper, neglects to do so without reasonable cause; or Section 13(3)(c) is granted a loan based on false information,

Section 14. Conditions for grant of loan Section 14(1)(a) accept or reject any application for a loan; Section 14(1)(b) grant a loan to any student and in so granting impose conditions, demand security and require repayment in installments at such times and within such periods as the Board deems fit: Section 14(1)(i) the condition subject to which the loan was made; Section 14(1)(ii) any security given in relation to the loan; Section 14(1)(iii) any of the terms of repayment of the loan. Section 14(2) Where the Board has resolved to make a loan to any eligible student, the Board shall notify the applicant in writing, and require him within a specified period not exceeding six months to comply with any conditions and provide any security which the Board may have imposed or demanded. Section 14(3) Where any applicant fails to comply with the requirement of the Board notified to him under subsection (2) within the prescribed period, the application shall be deemed to have lapsed. Section 14(3A) The Board shall notify every applicant in writing whether the application for a higher education loan has been accepted or rejected. Section 14(3B) A student may appeal against a decision of th...

Section 15. Obligations of the Loanees Section 15(1)(a) to inform the Board of his contact address; Section 15(1)(b) to begin repayment of his loan together with any interest accrued thereon; Section 15(1)(c) if he is in formal employment, to authorize his employer to deduct the loan repayment and to remit it to the Board in such manner as the Board may direct. Section 15(2) Any loanee who fails or neglects to satisfy the requirements of subsection (1) within the stipulated time shall, in addition to any other action that the Board may take against him, be guilty of an offence and liable to a fine of not less than five thousand shillings in respect of each loan deduction that remains unpaid in accordance with provisions of subsection (1) and such fine shall be payable to the Board.

Section 16. Responsibilities of an employer Section 16(1)(a) upon the employment of any loanee to inform the Board in writing within a period of three months of such employment; Section 16(1)(b) upon confirmation by the Board that such a person so employed is a loanee, to deduct from the wages or remuneration of the loanee, the amount of any loan as instructed by the Board. Section 16(2) The employer shall pay every deduction from the loanee's wages or remuneration in the prescribed manner to the Board within 15 days after the end of each month.

Section 17. Penalties for delayed remittance Section 17(1) Where an employer fails to deduct or after deducting any loan repayment from a loanee does not pay such deductions to the Board within the prescribed period a sum equal to five percent of the total amount of the repayment shall be charged on the employer for each month or part of the month that the repayment remains unpaid. Section 17(2) Where an employer fails, without reasonable excuse, to notify the Board that he has in his employment a loanee within the specified period that employer shall be guilty of an offence and liable to a fine of not less than three thousand shillings for each month or part of the month that he fails to notify the Board of such employment.

Section 18. Annual returns Section On the last day of each calendar year the Board returns, shall send to all loanees an annual return form which every loanee shall be required to fill and submit to the Board before the end of the month of February of the succeeding year.

Section 19. Loan deductions Section In making its deduction for loan recovery, the Board shall not deduct more than one quarter of the loanee's basic monthly salary.

Section 20. General provisions Section 20(1)(a) recover from the person from whom the loan was made or his personal representative as a civil debt under the Debts (Summary Recovery) Act ( Cap. 42 ) the amount of the loan or the amount thereof then remaining unpaid together with interest thereon; Section 20(1)(b) enforce or realize any security relating thereto. Section 20(2) The Board may, in exercise of the powers conferred by subsection (1), engage the services of private legal practitioners.

Section 21. Board's discretion to waive loans Section death;

Section 16A. Responsibility of Kenya Revenue Authority Section Subject to section 125(3) of the Income Tax Act (Cap. 470), the Kenya Revenue Authority shall, at the request of the Board, furnish it with the name and address of a borrower or the employer of a borrower, if such information is known to the Authority. [Act No. 6 of 2005 , s. 42.]

Section 22. Officers of the Board Section The Board shall employ such officers, inspectors and servants as shall be necessary for the performance of their functions under this Act and shall pay out of the Fund to such officers and servants such salaries and allowances as the Board may from time to time determine.

Section 23. Inspectors of the Board Section 23(1) Every inspector appointed under section 22 shall Inspectorsofthe for the purposes of ascertaining whether the provisions of this Act have been complied with within any premises or place liable to inspection under this section have power to enter such premises or place at all reasonable times and to examine every person whom he finds therein. Section 23(2) The occupier of any premises or place liable to inspection under this section and any person who is or has been employing any loanee, and the servants and agents of such occupier or other person, and any employer shall furnish to the inspector all such information and produce for inspection all such documents as the inspector may reasonably require for the purposes of ascertaining whether loan repayments are or have been made or have been duly paid by or in respect of any loanee employed in such premises. Section 23(3)(a) wilfully delays or obstructs any inspector in the exercise of any power under this section; or Section 23(3)(b) refuses or neglects to answer any question or to furnish any information or to produce any document when required so to do under this section; Section 2...

Section 24. Powers of inspector to prosecute. Section An inspector appointed under section 22 or any other person authorized by the Board in writing, may, subject to the general or special directions of the Director of Public Prosecutions, prosecute in any court for all offences under this Act and for that purpose have all the powers conferred on a public prosecutor by the Criminal Procedure Code. [Act No. 19 of 2023, Sch.]

Section 25. General provisions as to offences Section Proceedings for an offence under this Act may, notwithstanding anything in any law to the contrary, be commenced at any time within the period of twelve months from the date on which evidence sufficient in the opinion of the Board to justify a prosecution for the offence comes to the knowledge of the Board.

Section 26. Court order on repayments Section 26(1) The court before whom any person is convicted of an offence under this Act, shall without prejudice to any civil remedy, order such person to pay to the Board, as the case may be, the amount of any outstanding loan repayments and interest or any other sum, together with any penalty thereon, found to be due from such person to the Board, and any sum so ordered shall be recoverable as a fine and paid to the Board. Section 26(2) All sums due to the Board shall be recoverable as debts due to the Board and without prejudice to any other remedy may be recovered by the Board summarily as a civil debt. Section 26(3) All criminal and civil proceedings under this Act may, without prejudice to any other in that behalf, be instituted by any inspector or other officer of the Board and where the proceedings are instituted or brought in a magistrate's court, any such inspector or other officer shall prosecute or conduct the proceedings. Section 26(4) All sums recovered by legal proceedings in respect of sums which should have been but were not paid to the Board shall be so paid to the Board.

Section 27. Evidence Section In any proceedings under this Act, a copy of any entry in the accounts of or any extract from the records or register of the Board shall, if stated to be a true copy by a certificate purporting to be signed by the Secretary or a person authorized on his behalf by him, be received in evidence as prima facie evidence of the truth of the contents thereof.

Section 28. Financial Year of the Board Section The financial year of the Board shall be the period of twelve months commencing on the 1st of July and ending on the 30th day of June of the following year.

Section 29. Annual Estimates Section 29(1) The Board shall submit to the Cabinet Secretary an estimate of its income and expenditure during the succeeding financial year six months before the commencement of the financial year. Section 29(2) The Cabinet Secretary shall communicate to the Board his approval of the annual estimates at least one calendar month before the commencement of the financial year. Section 29(3)(a) the cost of administration of the Board including payment of salaries, allowances, pensions, gratuities and other charges whatsoever payable to the staff and members of the Board; Section 29(3)(b) the payment or reimbursement to the members of the Board of monies in respect of expenses incurred during the attendance of the meetings of the Board; Section 29(3)(c) the development and maintenance of any property vested in the Board. Section 29(4) Except with the approval of the Cabinet Secretary, no expenditure shall be incurred for the purposes of the Board except in accordance with the annual estimates approved under subsection (2).

Section 30. Books of accounts and audits Section 30(1) The Board shall cause to be kept all proper books and records of accounts of the income, expenditure, assets and liabilities of the Fund. Section 30(2)(a) a balance sheet showing in detail the assets and liabilities of the Board at the end of the financial year; Section 30(2)(b) a statement of financial activities, income and expenditure during the financial year; and Section 30(2)(c) other statements of accounts as may be necessary to fully disclose the undertaking, assets, liabilities and discharge of the functions of the Board. Section 30(3) The accounts of the Board shall be audited by the Auditor-General or an auditor appointed by the Board with the approval of the Auditor-General. Section 30(4) The employment of an auditor shall not be terminated by the Board without the approval of the Auditor-General. Section 30(5) The Auditor-General may give any general or special directions to an auditor appointed under subsection (3) and such auditor shall comply with those directions. Section 30(6) An auditor appointed under subsection (3) shall report directly to the Auditor-General on any matter relating to the directions given u...

Section 31. Annual report of the Board Section The Board shall, within three months after the end of each financial year, prepare a report on the operation of the Fund during that financial year and shall transmit such report to the Cabinet Secretary who shall cause it to be presented to the National Assembly together with the report of the Auditor-General and certified copies of the accounts referred to in section 30 .

Section 32. Secrecy, offences and penalties Section 32(1) Any person having an official duty or being employed in, or in connection with the administration of this Act shall regard and deal with all documents, information, returns and forms relating to applications for loans or to the granting of loans under this Act as secret and confidential. Section 32(2)(a) to any person other than a person to whom he is authorized by the Board to communicate it; or Section 32(2)(b) otherwise than for the purposes of this Act, Section 32(3) Any person guilty of an offence under this Act shall, where no other penalty is prescribed, be liable to a fine not exceeding ten thousand shillings or to imprisonment for a term not exceeding three years.

Section 33. Protection from personal liability Section No matter or thing done by the Chairperson or any member of the Board or any officer, employee or agent of the Board shall, if the matter or thing is done bona fide for the purpose of executing any provision of this Act, render the Chairperson, member, officer, employee or agent or any person acting on their directions personally liable to any action, claim or demand whatsoever.

Section 34. Liability of he Board for damages Section The provisions of this Act shall not relieve the Board of the liability to pay compensation or damages to any person for any injury to him, his property or any of his interest caused by the exercise of any power conferred by this Act or by the failure, whether wholly or partially of the exercise of such powers.

Section 35. Powers of Cabinet Secretary to exempt Section The Cabinet Secretary may by notice in the Gazette exempt any class of persons from all or any of the provisions of this Act, where in his opinion it is expedient in the public interest to do so.

Section 36. Act to apply to Government employees Section 36(1) This Act shall, subject to the provisions thereof relating to exempt persons, apply to persons in the service of the Government as it would apply if their employer were a private person or a state corporation. Section 36(2) All monies required to be paid under this Act by the Government in respect of loan repayments in relation to persons in the service of the Government shall be charged on and paid out of the Consolidated Fund without any further appropriations than in this Act.

Section 37. Regulations Section the receipt, processing and approval of applications for loans and the granting of loans to students;