A first person account of how financial ignorance, economic pressure and student debt haunt graduates long after campus.
I appended my final signature and submitted the loan for approval. As I walked out of the building, I found myself humming Craig David’s “I’m walking away from the troubles in my life.” Little did I know that 6 years later, the consequences of that decision would come back to hunt me. Leading me straight into even deeper financial problems.
What would I do with Ksh 60,000? Do you even know what I could do with Ksh 60,000? I kept asking myself. Whoever said money talks wasn’t lying. This money hadn’t even hit my account yet, but I was already budgeting for it like it had. My life was about to change. Completely.
A few weeks later, I got a notification that I should check with my bank within 48 to 72 working hours, the funds were about to be disbursed. I smiled all the way to the bank, not to start my investment journey, but to consume. This wasn’t just any money. This was the HELB student loan!
Did I see the terms and conditions? Well, if I saw them, I didn’t read. And if I read, I definitely didn’t understand. So, what did I do with the money? Like my government, I ‘embezzled’ it.
Easy come, easy go.
I was a freshman. Young. Naive. I had straight A’s on everything from high school but an E when it came to my financial literacy. I was “new money”. The only financial advice I had ever internalized came from P-Square: “Chop my money, 'cause I don't care”
Marry in haste, repent in leisure. Campus life and the money faded faster than a TikTok Challenge. Fast and without warning. Three months after graduation, I landed a high-value girlfriend...but not a job. Another liability.
Like every other fresh graduate, I had dreams- big-paying jobs, fat cheques, the whole package. But what I am getting now? A whole lot of... reality checks. I started receiving constant notifications from them telling me that my loan was overdue. Just last week another threatening message popped up:
“Following the lapse of the 7-day notice, HELB is proceeding to engage your guarantors for the loan recovery”.
I have not refused to pay.
It’s just that finding a job has proven harder than fighting corruption in the country. So, like most unemployed graduates in my situation, I did the only logical thing... I ignored the message. But I find solace in knowing that my government and I share one thing in common: We’re both in debt, and the good thing is? We’ve not defaulted (yet) like some of our peers.
I checked my loan status and it was ...dangerously close to hitting Ksh 260,000. These days, I’m just surviving in the gig economy to make ends meet. Suppose I finally land an entry-level job earning 30,000 a month. Of course, give Caesar what belongs to Caesar, and by Caesar, I mean KRA. My pastor also demands 10 percent for God...But let’s be honest, he’s the one who’s going to eat it. Tough.
And let’s not forget, being an African Child is not a blessing. It’s an investment. There’s black tax to pay. So, tell me, how many years will it take me to walk out of this debt? And by then... how old will I be?
I know you still have a vendetta against your maths teacher. You got unresolved traumas and that’s why I won’t tell you to pick up the calculator. I already did the math for myself and I’ve made peace with one hard truth: when it comes to money, ignorance is not bliss.
The HELB loan interest rate is 4% per annum. At the time of writing this, my outstanding balance is Ksh 253,481. Now, let’s assume that after taxes, and after giving Caesar and my pastor their fair share, I decide to be more generous and start repaying Ksh 4,000 per month towards servicing the loan. How many years will I take to finish the loan? (assuming I will be consistent)
Press calclulator:
That would take me exactly 6 years to clear the loan. By then, I’ll be in my early thirties still broke, but debt-free.
That’s what pushed me to write this piece. I saw Kenya’s new funding model which was introduced to bail out public universities and TVETs from massive debts caused by ballooning enrolment and inadequate funding and honestly, I pity the students.
First of all, education is expensive now more than ever. It’s safe to say it’s meant for the privileged. Sorry. I meant the rich. The rest? Their parents will have to work even harder. Some will even borrow to finance their children’s education. The school fees figures are stratospherically high. Students are left with no choice but to borrow more loans. But the real question is: do they even know what they are signing up for? The devil, as always, is in the details. Have they actually taken time to go through the terms and conditions?
We were sold the dream “education is the only key to success.” But let’s be honest here...is the current education system even worth it anymore? Oops, I know we are not ready for that lecture. Most of you will probably lose interest (see what I did there?).
Honestly, I’d push the policy makers to make financial education be made compulsory in school. But if the system is engineered to shackle us in debt, that won’t be happening anytime soon. I knew something was deeply wrong when I saw my friend, an accounting graduate, CPA certified making the worst financial decisions I’ve ever witnessed. If even the “experts” are fumbling the bag, what hope is there for the rest of us?
If you’re a parent prioritise telling your children: that’s not free money. Sooner or later, the debt collector will come to claim what’s his. The time of reckoning is coming.
With the current unemployment crisis and so many living on the edge of poverty, most graduates are projected to carry debt for the better part of their lives. Getting in is easy. The real challenge is walking out.
As for me, I genuinely want to pay. I am cognizant that my repayment could help another struggling student. The spirit is willing but my pockets are weak. At this rate, I might just have to leave my girlfriend alone before she asks me for a loan. Because really, what’s the point of being in a relationship when you are broke? That’s a fast track to hypertension. For now, my guarantors will have to bear the burden. You signed the document too. What were you thinking?
By Arunga Denis
D.Arunga@africaupdates.com