Higher Education Loans Board Chief Executive Officer Geoffrey Monari on May 14, 2025.
With less than a month to go until President William Ruto’s planned introduction of a universal funding model for university students, uncertainty surrounds the government’s transition from the current scholarship and loan system, with thousands of first-year students preparing to report to campus later this month.
This uncertainty arises because universities have already announced reporting dates for the 2026/2027 academic year, leaving little time for parliament to approve and the government to implement the new funding framework that President Ruto says will take effect in September.
“We now have in parliament the final version of how we are going to make higher education universal. It won’t matter what background any child in Kenya comes from; what will matter is how good they are. We have been thinking of how to fund higher education going into the future,” said Dr Ruto at State House.
The reforms are contained in the Tertiary Education Placement and Funding Bill 2026, which seeks to overhaul the higher education financing system, replacing the Higher Education Loans Board (HELB), the Universities Fund (UF), and the Technical and Vocational Education and Training Funding Board (TVETFB) with a single Tertiary Education Funding Authority (TEFA).
This new authority will administer government scholarships and student loans, creating a unified funding plan for universities, colleges, and TVET institutions.
The University of Nairobi will admit its first-year students on August 24, while Masinde Muliro University of Science and Technology has scheduled reporting for August 20. Kenyatta University is expecting its new students on August 26, while Jomo Kenyatta University of Agriculture and Technology will receive its first-year students from September 1.
Kibabii University will also admit its first-year students in September. These reporting dates mean thousands of students will join universities either before or at the same time as the new funding model is expected to take effect, thus raising questions about which financing framework will apply to this year’s intake.
Higher Education Loans Board CEO Geoffrey Monari.
HELB chief executive Geoffrey Monari confirmed they will continue to process student loan applications under the current legal framework until Parliament approves the proposed changes.
He confirmed that applications for student loans are still open.
“Applications have not been suspended. Applications are ongoing. You can’t wait. We just follow the law of the day. The president requested that parliament approve the changes. So as we wait for that, we will continue to process student loans,” he said.
“Once the new law is approved, we will adapt accordingly. If parliament passes it, then we will implement it. For now, we are operating under the current law,” he told the Nation.
On Wednesday, Mr Monari presented proposals to the National Assembly Education Committee to transform HELB into a government-backed development bank to finance universities and colleges across the country.
The Bill proposes the dissolution of HELB, the Universities Fund (UF) and the Technical and Vocational Education and Training Funding Board (TVETFB), to be replaced by a single institution: the Tertiary Education Funding Authority (TEFA).
The proposed funding model aims to raise Sh100 billion annually from the government, investors, parents, graduates, and development partners. These funds would be used to issue education bonds, which would be backed by an annual allocation of Sh100 billion, as well as a sinking fund to service interest payments and repay the principal.
Dr Edwin Wanyonyi, CEO of the UF, also said that scholarship applications for first-year students will continue to be processed under the existing legal framework until parliament passes the proposed legislation.
Universities Fund acting Chief Executive Officer Dr Edwin Wanyonyi during a past event.
“There is no vacuum. The law that is currently in place is what we are implementing, and we will continue to operate under that framework until parliament passes a new law,” he said.
Dr Wanyonyi added: “Once the bill has completed the parliamentary process and received royal assent, we will make the necessary adjustments. The process also allows stakeholders and members of the public to give their views before a final decision is made. Therefore, so for now we are proceeding with the current system.”
He said applications are progressing well. About 70 per cent of continuing students have already reapplied for funding.
“Applications are ongoing, and we have received an excellent response. We are at about 70 per cent for continuing students. Continuing students are required to reapply every year because funding follows the student. This means each learner has to confirm that they are still at university before funds are released,” said the official.
“As universities are opening from mid-August to early September, we will continue processing applications under the existing framework until there is a change in the law,” he said.
The programme will be managed through investment banking and treasury functions, overseen by a governing board and regulated by the Capital Markets Authority. Parents would also be able to save for education through an investment-based scheme listed on the Nairobi Securities Exchange, to enable them to earn interest on their savings.
Other proposed sources of funding are strengthened HELB loan recoveries, income-contingent graduate loan repayments and access to low-interest, long-term concessional financing from development partners.
Under the new bill, any Kenyan admitted to a recognised public or private university, college, or TVET institution will be eligible to apply for a government education loan, provided they meet the requirements set out in law. The new authority will also administer scholarships and establish a Tertiary Education Fund to be financed through parliamentary allocations, loan repayments, investments, grants, and donations.
The authority would also have the power to mobilise additional resources through treasury bills, bonds, pension funds, commercial partnerships, and other financing mechanisms, in an effort to reduce dependence on the Exchequer.
According to documents presented before Parliament, HELB is facing a funding deficit of more than Sh57 billion, with total funding requirements standing at about Sh114 billion against an allocation of Sh56.7 billion. The shortfall threatens financial support for hundreds of thousands of university and TVET students.
"We are still looking for money to bridge the funding gap. We have presented our budget proposals to Parliament, but as things stand, we are still facing a funding shortfall of Sh57 billion," Mr Monari said.
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