University debts drop by Sh3 billion in the last two years

University debts have dropped from Sh75 billion to Sh72 billion in the last two years, according to the latest data from the Universities Fund (UF).

There are however fears that the debts could rise again in the coming months following the move by the courts to suspend the controversial new university funding model.

This came as the Fund said that it was engaging stakeholders on the way forward in seeking an alternative funding model following the court’s decision.

Last year, the High Court declared the new funding model as unconstitutional though the UF and Higher Education Loans Board (HELB) have since appealed against the ruling by Justice Chacha Mwita.

According to the Fund CEO Geoffrey Monari, the new funding model had seen a Sh3B drop in university debts in the period before the courts banned it.

He said that there were fears the debts which have crippled universities could rise again as the Universities grappled with the way forward following the court's directives.

“In the last two years we have seen universities debts drop from Sh75B to Sh72B after the new funding model was introduced,” he said.

Monari was speaking to the press in Lake Naivasha Resort ahead of the Biennial Universities Funding Conference on Wednesday to be graced by the CS for Education Julius Ogamba.

He said they had suspended the disbursement of funds through the new model pending the determination of the court of appeal case but would continue to support enrolled cohorts affected by the case.

Monari said the government has in the last two years used Sh44 billion to cater for 247,000 university students through loans and scholarships.

 "We urge students affected by the suspension of the implementation of new funding by the courts to practice patience as the government puts in measures that will ensure that they pursue their studies", said Monari.

In addition, Monari said in partnership with Kenya University and Colleges Central Placement Service (KUCCPS), they are working to ensure over 246,000 learners apply for courses for the next financial year.

On the new model, the CEO said the move has also rendered independence to universities to commercialize their research and generate their source of revenue which had reduced pressure and reliance on the exchequer.

The conference, Monari said, which will be chaired by Education CS, would help unlock challenges facing the education sector in a sustainable funding model for universities.