The government is banking on the new higher education funding model to revitalize institutions struggling with financial instability due to mounting unpaid bills.

According to Education Cabinet Secretary Julius Ogamba, 23 out of 35 public universities are technically insolvent, a situation that has raised concerns among students and stakeholders. These universities have collectively accumulated Sh75 billion in pending bills owed to various statutory bodies.

For instance, the University of Nairobi (UoN) has outstanding debts totaling Sh13 billion, accrued over 12 years. The debt breakdown includes Sh4 billion owed to the Kenya Revenue Authority (KRA), Sh7.7 billion in pension contributions, and Sh25.6 million each for the Housing Levy and the National Social Security Fund.

Financial turmoil

Additionally, UoN owes Chuna Sacco Sh20.8 million, Sh4.5 million to insurance companies, and Sh351.8 million in bank loans.

The Technical University of Kenya (TUK) also faces financial turmoil, with liabilities amounting to Sh12.9 billion—meaning that the debts of these two universities alone have surpassed their total assets.

Despite this grim reality, President William Ruto has painted an optimistic picture of the state of higher education. While awarding a charter to Rara University at State House, he stated that the phased-out funding model had helped some universities recover financially.

“I am pleased to report that both Moi University and the Technical University of Kenya are now on the path to financial recovery,” President Ruto said.

Speaking at the Huawei ICT competition award ceremony, Education CS Ogamba clarified that there was no contradiction in the government’s messaging. He reiterated that without immediate intervention, many universities would face insolvency.

Aligning statement

“There is no contradiction at all on this subject. What we told Parliament last week is correct: the Auditor General has found that 23 of our public universities are technically insolvent. That is precisely why the new higher education funding model was introduced—to help reduce these financial challenges,” he explained.

Interestingly, Ogamba has now aligned his statements with those of the President, despite their seemingly contradictory remarks last week.

“Our universities are now on an upward growth trajectory following the introduction of the new funding model,” he said.

To further support the recovery of higher education institutions, President Ruto announced the creation of a new State Department for Science, Research, and Innovation under the Ministry of Education. This initiative is expected to help universities develop technology-driven solutions for long-term sustainability.