Over 368,000 university students are at risk of missing out on funding for their education, after the government allocated about a half only, of the required funds in Budget Policy Statement for 2025 – 2026 to cater for their tuition.
The funding deficit affects students under both the old differentiated unit cost (DUC) and the new funding model that was outlawed by the High Court last year.
The details are contained in a report presented by the Principal Secretary for Higher Education and Research Beatrice Inyangala to the National Assembly Education Committee of the National Assembly.
“Without intervention, these students are at risk of discontinuing their studies, which could have long-term implications for both students and universities,” Dr Inyangala told the committee.
She revealed that the total resource requirement for scholarships (to students) and grants (to universities), is estimated at Sh77.58 billion but only Sh40.49 billion has been allocated, leaving a funding gap of Sh37.09 billion. The financing is through the Universities Fund.
The Higher Education Loans Board (Helb) which gives study loans requires Sh81 billion but has only been allocated Sh46.9 billion. The deficit will affect 474,814 students who are eligible for support in universities and technical and vocational education and training (TVET) institutions.
“Students and their families will face higher out-of-pocket expenses, especially those in middle and low-income. There is a possible rise in drop-out rates, undermining efforts to enhance access to education,” warned Dr Inyangala.
Addressing the committee, the PS revealed that Helb is gradually moving away from reliance on Exchequer funding and will instead adopt a social bond financing model.
"The National Treasury is working with Helb to design this social bond, which will involve some investors," the PS stated.
Committee members also raised concerns about a claim by private universities that the government owes them Sh45 billion. However, the PS clarified that the figure remains a claim submitted to the Pending Bills Committee for evaluation. The claim was submitted last year.
"We did not, in any way, admit that we owe this money. We are awaiting directions from the Pending Bills Committee," the PS told the lawmakers.
MPs expressed concern that such financial claims could be misrepresented and eventually be included in government estimates, leading to potential misallocation of public funds.
"The reason we struggle to fight corruption in this country is because we budget for it. Fraud is regularised through documentation," said Jerusha Momanyi, acting committee chair and Kisii woman representative.
Further, the committee questioned the government’s role in funding private universities, particularly some infrastructure projects.
Legislators pointed out that some institutions, such as Tangaza and Baraton universities, had received requests for project financing, raising concerns about taxpayer money funding private enterprises.
In response, Dr Inyangala admitted that the requests were not well-articulated and promised revisions.
"The request was to ensure that adequate capitation under the agreed funding model. If private universities receive their allocation in full, they can independently finance their projects," the PS clarified.
Lawmakers insisted that such budgetary allocations must be clearly defined to avoid misinterpretation.
“Had we passed this request as it was, it would have created a direct budget line for completing a project in a private university, which is unacceptable," Nabii Nabwire, Lugari MP stated.
The session also touched on concerns over increased university fees and the financial burden on students. Some lawmakers questioned reports that certain private institutions had backdated outstanding fees in their student portals. The PS assured the committee that this matter was under investigation, with the Universities Fund tasked with resolving the issue.
The PS reiterated the government’s commitment to ensuring university funding remains transparent and within established frameworks.
"We are guided and will revise any miscommunication to reflect the intended policy direction," the PS affirmed.
