Varsities shoulder burden of Ruto's failed funding model as freshers report

Public universities are set to shoulder the financial burden of more than 200,000 first-year students joining institutions this year, as President William Ruto’s university funding model struggles to stay afloat for the third consecutive year.

The Kenya Universities and Colleges Central Placement Service (KUCCPS) has placed 202,133 students in universities under government sponsorship, adding to the pressure on institutions already grappling with funding shortfalls and delayed disbursements.

The latest admissions come as uncertainty hangs over the future of student financing, with the government seeking to overhaul the funding system introduced in 2023 after it repeatedly fell short of the money required to support students.

But with the proposed changes yet to receive Parliament’s approval, the new cohort is expected to enter university under the existing Student-Centred Funding Model, leaving public universities to absorb another intake even as the system struggles to meet its financial obligations.

This leaves universities and students facing the immediate challenge of financing a growing student population while the government works on a new funding framework.

On Tuesday, the National Assembly, through a notice, invited the public and stakeholders to submit memoranda on the proposed Tertiary Education, Placement and Funding Bill, 2026, which seeks to establish a new framework for placement and financing of students in tertiary institutions.

The National Assembly has given the public and stakeholders until August 31, 2026, to submit memoranda on the proposed legislation.

The proposed law therefore comes at a critical point for university financing, with the government facing both the immediate cost of supporting the latest cohort and a growing backlog under the existing model.

With the loans funding model yet to take off, Beatrice Inyangala, the higher education principal secretary, told MPs in August that students will be admitted under the Student-Centred Funding Model.

However, data from the PS shows that the government is struggling to provide funding under the model introduced in 2023.

According to the government, it requires Sh47 billion to fund all students beginning September when they are admitted.

However, parliament has only approved Sh30 billion for the function in the 2026/27 budget.

The shortfall means that universities will get less money than they require for the effective running of programmes in the institutions.

This means that the institutions will continue bearing the burden of the shortfall.

But this is not the first year the institutions are facing a dent in funding under the model that is now in its fourth year.

In fact, the government only funded students fully under the model in the first year of implementation.

In 2023/24, the first year of implementation, 122,634 new students enrolled in universities.

The cumulative number of students on scholarship was also 122,634, while the resource requirement stood at Sh12.63 billion.

The government allocated the entire Sh12.63 billion required, meeting 100 per cent of the funding requirement and leaving no funding gap.

The position changed in the second year as more students entered the system.

In 2024/25, new student enrolment increased to 134,889, taking the cumulative number of students on scholarship to 257,523.

The amount required to finance the scholarships more than doubled to Sh26.55 billion.

However, the approved allocation was Sh16.92 billion, meaning the government met only 64 per cent of the requirement.

The resulting funding gap was Sh9.63 billion, marking the beginning of the deficit under the model.

The situation deteriorated further in 2025/26 when the new enrolment rose to 180,125 students, while the cumulative number of students on scholarship increased to 437,648.

The resource requirement increased to Sh29.55 billion, but only Sh16.92 billion was approved.

The allocation therefore covered only 57 per cent of the amount required, leaving another Sh12.63 billion funding gap.

This pushed the cumulative funding deficit to Sh22.26 billion.

The biggest funding pressure is being recorded in the current financial year, with Sh47.36 billion required to fund the students but with only an approved allocation of Sh30.92 billion.

The allocation therefore covers about 65 per cent of the required amount, leaving a funding gap of Sh16.44 billion for the year.

This pushes the cumulative funding gap to approximately Sh38.70 billion.

In August, Inyangala told MPs that one of the biggest challenges is that the mechanism used to finance higher education has not kept pace with the funding model itself, creating persistent deficits that have left universities struggling to meet their obligations.

The funding gaps have already translated into mounting debts across the public university system.

“The shortfall limits the Fund’s ability to fund universities at full levels, constrains university cash flows and increases the risk of pending obligations that may affect teaching, learning, research and institutional operations,” Inyangala said in a report to MPs.

The presentation now opens the lid on the financial pressure facing universities under the model adopted in 2023.

Previously, MPs have also questioned the sustainability of the government’s university funding model, saying vice chancellors had complained that institutions were receiving significantly less money than they required to support teaching and learning.

Nabii Nabwera, MP Lugari, told the committee that vice chancellors from several public universities had informed him that government had adopted a practice of releasing student upkeep funds ahead of tuition payments, leaving universities without adequate operational resources.

Nabwera questioned whether such a funding arrangement was sustainable and warned that institutions were being pushed back into the financial crisis that the new university funding model was meant to resolve.

Inyangala, however, defended the funding model, insisting that it remains functional.

“The model is functional,” she told the committee.

She argued that the real problem lies not with the model itself but with the mismatch between the resources required by the sector and the amounts eventually allocated through the national budget.

“The mechanism of funding has not aligned with the model. Even if this model was changed to another one, if the budgeting allocations are not aligned to the requirements, we will still have problems,” she said.

The PS explained that the Ministry submits its funding requirements based on the actual cost of student scholarships and loans, but Parliament eventually appropriates lower amounts than what is required.

“We have come very respectfully to this committee and presented our requirements, but what has been appropriated has not been equivalent to the requirements for loans and scholarships,” she said.

According to the report, public universities had accumulated pending bills worth Sh100.3 billion by January 31 this year.

The largest share of the unpaid obligations comprises statutory deductions amounting to Sh33.213 billion, followed by unpaid salaries and wages of Sh26.341 billion, unremitted SACCO deductions worth Sh18.632 billion, capital project obligations of Sh3.025 billion, unpaid suppliers owed Sh4.168 billion, part-time lecturers owed Sh4.688 billion, and other liabilities amounting to Sh5.507 billion.

The report shows that several institutions are also yet to remit deductions to agencies including NHIF, NSSF, NITA, HELB, banks and housing levy collections.