The Higher Learning Education Loans Board is currently under pressure because of funds since students have not been able to pay back the loans given to them while in school session.
HELB has announced plans to float a Sh500 million bond even as it struggles to recover billions of shillings from defaulting beneficiaries.
The move is expected to boost cash-flow and ease pressure on the agency that relies on the Treasury, loan repayments, grants from development partners and deals with counties and constituencies.
HELB board chairman Ekwee Ethuro said the bond will be floated by 2022 after the agency tabled proposals to the Treasury last December.
The move comes as HELB seeks to increase the average amount of loans advanced to every student in the next three years.
HELB targets to increase the minimum loan to each student from the current Sh40,000 to Sh44,000 by 2022 while increasing the number of beneficiaries from 296,219 today to 375,986.