Private universities have submitted a document to the Ministry of Education that proposes radical changes to funding of higher education.
If adopted, the proposal by the National Association of Private Universities in Kenya (Napuk) will see students funded more through study loans and only a limited portion going to scholarships for priority programmes and grants.
The proposal comes at a time when the sub-sector faces various challenges. It is addressed to Education Cabinet Secretary Julius Ogamba and received at the MoE headquarters on February 11 2025, Napuk calls for a major overhaul of the higher education funding model, arguing that the frameworks the government has attempted so far have been unsustainable and inequitable.
Napuk proposes a shift from what it terms a “social-welfare orientation” and a move towards greater sustainability by funding students through loans that would be recoverable in future. It proposes that scholarship grants should be performance-based to such a limit that the government can afford and based on highly prioritised government programmes.
“Beyond this, the other students, whether in public or private universities, are to be supported through appropriate and inclusive loan products focused on tuition fees, books and upkeep,” the proposal reads.
Among the measures recommended by NAPUK include exploration of a levy to fund higher education through initiatives like education bonds as well as utilisation of the billions of shillings held by the Unclaimed Assets Authority. Another proposed source of revenue is mandatory levies on employers of graduates similar to the hotel and catering levy and the industrial training levy.
Napuk Chairman Simon Gicharu says that the union proposes formation of a new funding body that is legally empowered to source funding beyond the Exchequer allocation. He proposes that it be styled as National Students Financial Aid Corporation.
“While potentially unpopular, other measures could include imposing levies on the profits of institutions or individuals that benefit from specified types of training. The proposed corporation could also establish an endowment fund and, generally be able to invest with an eye to the future. Importantly, the mechanisms for recovery of due loans should be effective and efficient,” the document reads.
Mr Gicharu who is also the founder of Mt Kenya University argues that the new funding body is in line with recommendations of the Presidential Working Party on Education Reforms (PWPER) and the recent Cabinet decision to merge the Higher Education Loans Board (Helb) and the Universities Fund (UF).
The government introduced a new funding model for universities in 2023 to deal with a ballooning debt crisis in public universities that is currently about Sh80 billion and also to create stability.
Under the model, students are meant to be financed through scholarships and study loans, all of which are allocated after evaluation through a Means Testing Instrument to determine the level of need of a student.
However, the model has faced challenges and was in December halted by the High Court. This has create4d a new crisis in universities as many students are unable to pay the tuition fees and also their wellbeing.
Mr Gicharu said that students in private universities had also been affected by the court decision since they also cannot access their Helb loans granted under the quashed model. He added that the proposed model should track a student’s economic background from secondary school rather than test them upon admission to university.
Napuk acknowledges challenges posed by rapid growth in the higher education sector. University enrolment has increased from 361,379 in 2013 to the 246,391 students who qualified for direct university admission in 2024.
“This growth in enrolment in tertiary institutions inevitably has implications on the funding of higher education including but not limited to supporting university operations and student’s fees and upkeep. Generally, such fundings are anticipated to be borne by the public Exchequer leading to consistent underfunding in a number of public and as well as in private universities where government-sponsored students are placed in selected programmes,” the proposal further reads.
Napuk observes that the Differentiated Unit Cost (DUC) model, which preceded the current funding structure, was struggling due to underfunding by the government.
"Public universities received a maximum of 66 percent of the required funding under DUC in the 2018/2019 financial year, while private universities received as little as 18 percent. These funding shortfalls have led to an accumulation of unpaid tuition fees, salary arrears, and unremitted statutory deductions, amounting to an estimated sh80 billion in spending bills,” Mr Gicharu said.
“The focus of the Government should be on promoting access by reducing the financial burden on the students and the parents, while also ensuring that it retains the ability to provide the same kind of support for the students seeking opportunities in the future.
The association has urged the Ministry of Education to rethink its approach to university funding, emphasizing the need for a data-driven and forward-looking financial model.
"Failure to address the ongoing financial crisis could lead to further instability in universities, affecting both students and staff," he said.
