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Kabarak High School students celebrate after the release of 2025 KCSE results with some of their top students at the institution on January 9, 2026.
Kenya’s university funding system is facing unprecedented strain following a record surge in students qualifying for higher education.
Data shows that 270,715 candidates scored C+ and above in the 2025 Kenya Certificate of Secondary Education (KCSE) examinations, making them eligible for university admission. This figure far exceeds earlier projections and marks a sharp rise from the 246,000 qualifiers in 2024 and 201,000 in 2023.
The growing number of eligible students comes as public universities grapple with limited funding, raising concerns about whether the government and higher education funding agencies can accommodate the increasing demand.
Parliament’s Education Committee has warned of a looming financial crisis in the sector, with pending bills standing at Sh72.2 billion, as of May 2025.
MPs have also described Treasury allocations as “a drop in the ocean” compared to the scale of the funding challenge.
Private universities are also under pressure, with outstanding payments amounting to Sh58 billion, underscoring the financial strain across the entire higher education system.
Higher Education Loans Board (HELB) Chief Executive Officer Geoffrey Monari said the increase in the number of students qualifying for university education falls within the agency’s projections but cautioned that sustained growth could stretch its loan portfolio, unless funding keeps pace.
Higher Education Loans Board CEO Geoffrey Monari.
The board estimates that most of the eligible students – about 90 per cent – will apply for loans and the agency is coordinating the process closely with the Treasury to ensure cash flow matches demand.
“We had projected that the numbers would rise, and this has come to pass, putting more pressure on our loan portfolio. We are working closely with the National Treasury to ensure timely disbursement, while encouraging repayment so that more students can access loans without delay said,” Mr Monari.
He said HELB prioritises disbursements based on university opening schedules and continuously seeks additional funding.
“So far, no student has been left out in the last three years of funding,” Mr Monari said.
The board has also put measures in place to manage funding gaps, he said, adding that when resources are constrained, HELB prioritises disbursements according to university calendars while reinvesting recovered loans.
“Loan recovery remains a key strategy to sustain funding. Last year, we collected Sh5.2 billion and are targeting Sh6.2 billion this year. The more we recover, the more students we can fund,” said Mr Monari.
Charlotte Ivy who scored an A in the 2025 KCSE examinations is carried by students Alliance Girls High School at the school on January 9, 2026.
Universities Fund CEO Edwin Wanyonyi said the current cohort aligns with historical trends noting that most qualifying candidates (about 90 per cent) typically apply for university admission.
“Based on past data, we expect about 240,000 new students to join universities. We are projecting to allocate approximately Sh11 billion to cover the scholarship component for this group,” said Dr Wanyonyi.
The surge comes as public universities are already operating under strained budgets raising questions about whether the Universities Fund and HELB can sustain rising enrolment.
According to the Universities Fund, a total of 577,526 students are currently receiving government support. Of these, 320,003 are funded under the Differentiated Unit Cost (DUC) model, and the rest through the Student-Centred Funding Model (SCFM).
In the 2024/2025 financial year, the government disbursed Sh23.1 billion to public universities under the DUC framework, while private universities received Sh564 million. An additional Sh16.9 billion was released under the new funding model.
Dr Wanyonyi said funding for the incoming cohort will fall under the next financial year starting in July, allowing room for negotiations with the Treasury.
Support scholarships
He said additional fiscal space is expected as the final cohort under the DUC model exits, freeing resources to support scholarships under the student-centred funding framework.
“These students will join in the next financial year, not the current one. We are already in budget discussions with the Treasury. With the exit of the last DUC cohort, funds previously allocated there will support scholarships,” said Dr Wanyonyi.
While acknowledging continued growth in student numbers, he said no immediate funding gap has been identified.
“At this point, based on our projections and engagements with the National Treasury, we do not see a significant mismatch between available funding and student needs,” he said.
The Universities Fund also clarified that it does not independently prioritise courses for funding. Programme costs are determined through guidance from the Commission for University Education, with science, technology, engineering and mathematics (STEM) programmes receiving higher allocations due to laboratory, equipment and practical requirements.
As enrolment rises, the fund said discussions are ongoing on how universities can expand more efficiently. Proposed measures include boosting research income, strengthening industry partnerships, adopting technology to reduce costs and exploring cost-sharing arrangements.
“University funding is a shared responsibility between government, households and institutions themselves. We are engaging at multiple levels on how universities can generate income and manage costs better,” said Dr Wanyonyi.
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