Kenya Proposes New Deposit Mandate for HELB Successor Entity

The Kenyan government is proposing new legislative changes to restructure higher education financing across the country. Under a new legislative proposal, the state plans to replace the existing student funding framework with a body equipped with broader financial functions, including a deposit-taking mandate.

According to a Kenya Gazette Supplement containing the Tertiary Education, Placement and Funding Bill, 2026, the government aims to establish the Tertiary Education Funding Authority (TEFA). The proposed legislation outlines structural changes intended to oversee placement and financial support for students pursuing higher learning.

The draft bill proposes empowering the new fund to establish a savings scheme capable of receiving financial deposits. This mandate would allow any person wishing to save towards tertiary education to deposit funds directly into the scheme managed by the institution.

The legislative document, published in Nairobi on 24th July, 2026, was formally received by the Director of Legal Services at the National Assembly on 27th July, 2026. The proposed law introduces specific clauses governing the transition from current higher education funding structures.

Under Clause 64, the bill provides for the explicit repeal of the Higher Education Loans Board (HELB) Act, alongside adjustments to various sections of related legislation. This provision signals a clear legislative shift toward consolidating placement and funding mechanisms under a unified regulatory umbrella.

Additionally, Clause 65, Clause 66, and Clause 67 set out the framework for institutional succession, asset management, and personnel. Clause 65 provides for successors of former institutions, ensuring legal continuity during the restructuring process.

Clause 66 mandates the complete transfer of property, assets, and liabilities of former institutions to both the Kenya Universities and Colleges Central Placement Service (KUCCPS) and the new authority. Clause 67 specifically outlines the transfer of staff from legacy entities to the newly created funding service and authority.

The bill also contains legal provisions regarding liability, enforcement, and regulatory oversight. Clause 60 provides for the amendment of the Limitation of Actions Act to exempt the expiry of claims under the new legislation, securing long-term debt collection rights.

Clause 61 establishes liability for damages in cases of negligence during the performance of duties by officers within the service and authority. Meanwhile, Clause 62 specifies general penalties for offences where specific penalties have not been previously outlined.

Regulations governing the implementation of the act will be formulated by the Cabinet Secretary (CS) responsible for tertiary education, as provided under Clause 63. These rules will guide the operationalization of the savings scheme and the deposit-taking framework.

If enacted by Parliament, the law will officially be cited as the Tertiary Education Placement and Funding Act, 2026. The legislative proposal continues to move through parliamentary procedures for formal consideration by lawmakers.