About 843,623 students risk discontinuing their university education following underfunding of the higher education sector by Sh119.8 billion.

Documents tabled before MPs who sit on the education committee chaired by Tinderet MP Julius Melly show a shortfall of Sh37.09 billion in grants and scholarships to needy students.

Only Sh40.49 billion has been allocated against a total requirement of Sh77.58 billion for the New Funding Model (NFM) known as the student-centred funding and the Old Funding Model known as Differentiated Unit cost (DUC)

The Sh77.5 8 billion required comprises  Sh44.468 billion for scholarships under the University Fund (UF) known as the student-centred funding model required to support 483,481 students, Sh31.34 billion for continuing students under Differentiated Unit cost (DUC)  required to support 260,489 students and Sh 1.77 billion required to support 67,600 students in Private universities.

This amount excludes the monies required to offer loans to students under the Higher Education Loans Board (Helb).

Funding gap

Helb, the documents show, requires an additional 34.4 billion to support nearly 474,814 students.  The agency has only been allocated Sh46.9 billion against a total requirement of Sh 81 billion.

Higher Education Principal Secretary Beatrice Inyangala regretted that the funding gap not only threatens equitable access to university education but also undermines the financial stability of the institutions that rely on the said funds to sustain operations.

 Said Inyangala: “For the 2025/2026 Financial Year, the total requirement for scholarships and grants under the New Funding Model (NFM) and the Old Funding Model (DUC) is estimated at Sh77.58 billion. However, the allocation is Sh40.49 billion leaving a funding gap of Sh37.09 billion.”

 She added: “To sustain accessibility and quality in higher education for thousands of deserving students, an additional Sh37.09 billion will be needed to bridge this funding deficit. Addressing this deficit is critical to ensuring the success of the new funding model and safeguarding the future of higher education in Kenya.”

In her brief before the MPs, Inyangla insisted on the need to have adequate funding to support students’ access and retention in universities on the grounds the total number of students placed has grown from 173 to 127 in the 2023 cohort (KCSE 2022 now third years), to 204,465 in the 2024 cohort (KCSE 2023 now second years) and further increasing to 246,391 in the 2025 cohort (KCSE 2024, first years in 2025/2026.

 She also stressed on the need to have the money available on grounds that the Kenya Association of Private Universities (Kapu) has threatened to sue the government over outstanding arrears totalling Sh47.1 billion for the period since the 2016/17 financial year which she regretted could further strain the government’s education budget, disrupt funding allocations.

 She said: “This upward trend highlights the increasing demand for university education in Kenya, reinforcing the need for adequate funding to support student access and retention. However, despite the higher placements, the number of students receiving scholarships remains significantly lower than those placed, leading to financial strain on students and institutions alike.”

 The move comes at a time when Auditor General Nancy Gathungu has raised concerns over the Means Testing Instrument (MTI) used for assessing financial capacity of the students categorizes them into five financial bands, 1 to 5 to determine whether the students will get funding through scholarships, loans, and household contributions.

 Already, the High Court has declared the NFM unconstitutional for being discriminatory as it violates students’ right to education as well as clarified that it is Government’s responsibility to fund public universities and passing the responsibility to parents was a violation of the Constitution.

 In her latest report on State Department for Higher Education and Research for the year ending June 2024, Gathungu raised concerns over inaccurate data submission by applicants leading to distorted MTI scores, limited public awareness leading to information gap to the intended beneficiaries, delays in funds disbursement in the form of loans and scholarships thus disrupting students’ ability to pay tuition fees, access accommodation, and cover living expenses, inclusivity concerns where vulnerable groups, such as students with disabilities or those from marginalized regions face difficulties accessing the funds they need as well as emerging concerns on unique challenges, such as those faced by Muslim students who require sharia-compliant financial products, further hinder inclusivity.

 Others are loan repayment being too high due to unemployment and underemployment thus making it challenging for graduates to repay their loans leading to increased  default rates , lack of coordination between the other government agencies dealing with the higher education students support and the model not being integrated with the Kenya Universities and Colleges Central Placement Service (KUCCPS) KUCCPS system to ensure seamless tracking of students from placements in the universities to funding.

 Said Gthungu: “In the circumstances, the effectiveness of the New Funding Model for higher education in supporting students’ funding requirements could not be confirmed.”

 And in the documents tabled before the MPs, out of the shortfall of Sh37.09 billion required for grants and scholarships, the UF known as the student funding model, only Sh16.9 billion was allocated to cover 183, 977 students leaving 299, 504 students without funding.

Financial constraints

 For UF to provide scholarships to support all the 483,481 students from 2022, 2023 and 2024 the department requires Sh44.46 billion.

 Said Inyangala: “This means that these students risk missing out on higher education due to financial constraints.”

For continuing students under DUC, the document shows that while Sh31.34 billion is required to support 260,489 students in public universities, only Sh23 billion has been allocated which can only finance 191, 184 students leaving 69,305 students without funding.

The documents further shows that out of the Sh119.8 billion, Sh45.77 billion is required to settle Private Universities pending bill,  Sh950 million relates to the Open University of Kenya, Sh500 million relates to Implementation of Competency Based Education and Training in universities where they have planned to  undertake retooling of 2,500 university staff, Sh135 million is for National Research Fund to enable it meet its obligation towards a collaborative Kenyan-German Post-Graduate Training Programme.

 Others are Sh 100 million required by Jaramogi university to upgrade its sewer system and Sh1.3 billion for projects promised by President William Ruto.