The Higher Education Loans Board (HELB) has issued a stern reminder to employers on the importance of complying with obligations related to student loan deductions. In a recent notice, the board highlighted the critical responsibilities that employers must observe to avoid financial and legal penalties.
One of the key obligations is that employers must notify HELB whenever they hire a new employee who is a student loan beneficiary. This step ensures that the repayment process starts promptly and helps maintain smooth loan management for the employee.
Additionally, employers are required to deduct the correct monthly repayment amount directly from the employee’s salary. These deductions must then be remitted to HELB by the 15th of the following month. Non-compliance with these obligations can attract severe consequences.
HELB has warned that employers who delay remittances will incur a penalty of 5% of the unpaid amount for each month the payment is overdue. Moreover, failing to inform HELB about a new employee with a loan can result in criminal charges. Section 17 of the HELB Act states that an employer who, without reasonable excuse, fails to notify HELB of a loanee in their employment is guilty of an offence and liable to a fine of no less than KSh 3,000 for each month of non-compliance.
To facilitate compliance, HELB has introduced an online Employer Portal. This portal is designed to simplify the process for employers and ensure timely and accurate loan deductions. Through the portal, employers can register their organizations, report new employees who are loan beneficiaries, access a billing schedule to determine the correct deduction amount, and remit payments directly to HELB.
By leveraging this digital platform, employers can streamline their obligations, avoid penalties, and contribute to the efficient management of student loans. HELB’s crackdown underscores the importance of accountability and timely remittance, reinforcing the board’s commitment to supporting students while ensuring compliance from employers across Kenya.
