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Government efforts to finance universities, critical for national development, have faced challenges in recent years. In 2017, Kenya adopted the Differentiated Unit Cost (DUC) model, which distributed funds based on the specific costs of academic programmes.

Though intended to provide more resources to high-cost programmes, the DUC model raised concerns over its ability to address funding disparities, support university operations, and improve access for low-income students.

In 2022, the Kenya Kwanza administration introduced a new funding model, called the Variable Scholarships and Loans Funding, blending government scholarships, loans, and household contributions. This model aimed to tailor financial aid based on students’ economic situations through a means testing instrument. However, the model faced a backlash from students, parents, and educational stakeholders, who argued that the the means testing often placed disadvantaged students in higher financial brackets, reducing their access to crucial funding.

In response to mounting discontent, the Ministry of Education formed a 129-member committee in September to assess and refine the funding model to ensure fair access to higher education. However, before the committee could proceed, the High Court suspended the model in October, following a petition from the Kenya Human Rights Commission, Elimu Bora Working Group, and the Students’ Caucus, who argued that the model was unconstitutional and had resulted in confusion in university funding. This suspension left universities, students, and administrators uncertain about future funding mechanisms.

The previous model, for all its ambitions, left lingering questions about its effectiveness. Did its calculations fairly address funding disparities across programmes? Was it sustainable and fair for universities? What alternatives existed to enhance funding without raising student fees? Did it improve access for low-income students? Was the government faithfully fulfilling its funding obligations under this model?

While well-intentioned, the abandoned model presented several issues. Funding disparities across programmes persisted, impacting low-enrolment yet essential fields for national development. Additionally, reduced government allocations led to a steady decline in the coverage of unit costs, dropping from the intended 80 percent to around 48 percent by 2022, while public-university enrolment grew from 233,218 in 2018 to 356,188 in 2023. With government support lagging behind increasing demand, universities faced tremendous pressure to manage operational costs.

Despite receiving billions in government allocations, universities struggled to meet financial obligations due to a combination of internal and external factors. Government funding often came with stipulations, such as earmarking portions for collective bargaining agreements negotiated with trade unions, assorted allowances, and constituent college support. For instance, by the 2022/2023 fiscal year, 21.44 percent of the allocated Sh44 billion for universities was dedicated to specific directives, leaving minimal funds for infrastructure development and other needs.

A lack of timely government remittances compounded universities’ financial woes, forcing them to rely heavily on tuition fees as their primary revenue stream.

To address the financial crisis in higher education, immediate improvements in financial management are essential. Suggested solutions include expanding public-private partnerships, offering targeted scholarships, and adjusting the HELB model to improve the amounts and flexibility in loan repayment. Diversifying revenue through research commercialisation, partnerships, and profitable asset investments could also help.

While the abandoned model was initially beneficial, it was ultimately undercut by delayed and declining government remittances. The new model, while robust, must overcome similar funding and disbursement issues to succeed. Sustainable financing for higher education will require clear commitments and timely funding to fulfill its mission of supporting national development.

— The writer is a Professor of Physical Chemistry and the University of Eldoret