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Explainer: Ruto's new university funding model & how it affects students

Ruto ends government funding of public universities and directs Education CS Ezekiel Machogu to take immediate steps to implement the new funding model.

President William Ruto during a media breifing at State House, Nairobi on May 3, 2023

President William Ruto has announced that the government will no longer fund public universities.

In an address to the nation on Wednesday, May 3, 2023, President Ruto said that the old funding model had occasioned the current cash crunch facing public universities.

He acknowledged that the annual Sh54 billion funding budgeted for public universities was less than 50% of what the tertiary institutions require.

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Universities have been forced to look for alternative funding methods, which have put the schools in debt.

The old model encouraged massive enrollments despite inadequate funding. Universities are currently indebted to the tune of Sh60.2 billion.

TVETs are also facing similar challenges due to the increase in enrollment.

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President Ruto said that his economic advisors led by David Ndii held many meetings with university vice-chancellors to craft a new funding model.

The new university funding model doesn’t increase university fees.

In the financial year 2022/23, Sh54 billion was allocated to university education as grants and loans.

Ruto said the budgetary allocation would be increased to 84.6 billion in the next financial year. TVETs will get an increment from Sh5.2 billion to Sh10 billion in 2023/24.

However, the budgetary allocation will not be disbursed to tertiary institutions but rather used to provide loans and scholarships to students directly.

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Universities and TVETS will no longer receive, under the new funding model, block funding in the form of grants based on differentiated unit costs. The government has resolved that university funding will henceforth be student-centred and be apportioned to individual students according to their level of need.

Funding to students shall combine scholarship loans and household contributions on a graduated scale, scientifically determined by means testing instrument. The means-testing instrument is an instrument that has been developed by higher education loans board over the last 20 years,” he said.

Students will be categorised according to three levels of need; vulnerable, less vulnerable, and able. All students shall be supported adequately to meet the cost of the program they choose to pursue and no student will be left behind.

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University students

  1. Vulnerable students: The government will fully fund the vulnerable students who comprise 29% of students joining university; 45,000 in universities and 42,000 students in TVETs.
  2. Less vulnerable students: Students from less vulnerable backgrounds will receive government scholarships of up to 53% and loans from the government of up to 40%, a total of 93%.
  3. 7% will be contributed by their households. 
  4. Able students: Students from able backgrounds will be funded through a government scholarship up to a maximum of 38% of the cost of the program and 55% in the form of loans. Their household will pay only 7%.
  5. Students in private universities will qualify for loans but not scholarships. 

TVET students

  1. Needy students will be fully funded. 
  2. Less needy students in TVETs will receive government scholarships up to a maximum of 50% and 30% loans while their households will pay 20%.
  3. Able students joining TVETs will be funded to the tune of 32% for government scholarships and 48% for government loans and their households will equally contribute 20%. 

Under the new funding model, needy students will get more scholarships and fewer loans, while able students will get more loans and fewer scholarships.

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Universities will therefore be required to declare and publicize the actual cost of their programs and no public university shall levy additional charges or raise its fees without the approval of the university funding board.

Students who are eligible shall apply for government scholarship and loans as well as bursaries from complimentary funding agencies including County governments and national government constituency development funds and private companies.

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The university funding board shall share information with students on the availability of sources of funding through its portal and streamline the application process.

The new model of funding higher education to be implemented effective this academic year 2023 2024 will commence with the new cohort of 173,127 students joining universities and 145, 325 students joining TVETs.

Continuing government-sponsored students shall be supported in line with the previous existing funding model.

Starting from the 2023/2024 academic year, the process of placing students in universities and TVETs shall not be linked to funding.

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All universities are to disclose and provide information on the cost of the academic program to the Kenya Universities and Colleges Central Placement Service (KUCCPS).

KUCCPS shall publish this information prior to the placement of students so that students can choose the universities they want to join.

Universities will be motivated to raise additional resources and to enhance the quality of education so as to attract more students.

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