Abstract

University student loans were introduced in Kenya with the aim of easing the burden of public expenditure in higher education. In the initial years the loans were to benefit all students enrolled at University irrespective of their socio-economic backgrounds. The beneficiaries were expected to repay the loan later upon getting into employment. This mode of funding eventually became unpopular both to the government and the international donor community because of the inherent negative social implications. Consequently, the higher Education Loan Board (HELB) was formed through an Act of Parliament in 1995 and was mandated to disburse loans and recover the same from the former beneficiaries. However, HELB has severally been attacked of inability to consider the genuinely deserving cases. It is in the light of these criticisms that this study was carried out to determine the level of inequalities in the allocation of HELB loans to the recipients. Besides helping the researchers to develop insights into research work, this study uses the Lorenz Curves and Gini- coefficients as tools for determining inequalities in student loan allocations. This study was guided by the theory of socialist economics of education, propounded by Louis Blanc in the 19^th century. This theory underlines the need to create an economy that redistributes income from the rich to the poor, so as to create equality of well-being. The study was carried out in Bungoma district and it involved 161 undergraduate loan recipients in the 2000/2001 first year undergraduate cohort from the six public universities, 161 parents, 2 academic registrars in the public universities and the manager of the loan Disbursement and recovery at HELB. Samples for the study were selected using purposive and quota sampling techniques. The population of the study comprised of; 275 undergraduate loan recipients in the cohort, 275 parents, 6 academic registrars and the loan disbursement and recovery manager at HELB. Data was collected using questionnaires and interview schedules. The data collected were analyzed by both the descriptive  and  inferential statistics.  The income share tables, Lorenz curves and the Gini coefficients were used to determine the level  of inequality in the provision of loans to the recipients. The findings to this study revealed the following; the amount of HELB loan allocation increased over the four academic years.  The number of male students who benfitted from the HELB loan was higher than that of the female students. Majority of the loan recipients in the district were from the medium socio-economic background. There were small inequalities  in the provision of the loans, however, these inequalities tended to reduce as the students in the cohort progressed through the four academic years. Recommendations considered essential with regard to ameliorating inequalities in the public universities were made and areas for further research were suggested. 

Key words: Access, bursary, efficiency, equity, public subsidy, socio-economic background, student loan.