Key concerns about the new university funding model & possible solutions

How the new university funding model works (Bands & loan terms)

The new funding model categorises students into different income bands, determining the level of financial support they receive.

For instance, Band 1 students, who come from the lowest income households (earning between Sh0- 500 monthly), receive a loan covering 25% of their tuition costs, a scholarship covering 70%, and their households contribute the remaining 5%.

As household income increases, the government’s contribution decreases, and the household share increases.

READ: 7 ways new higher education funding system different from previous one

Under the new model, loans are offered at a 4% interest rate per annum on a reducing balance, with a repayment period of up to 10 years according to the head of Lending at HELB King'ori Ndegwa.

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Graduates are granted a one-year grace period post-graduation to secure employment, and they must update their status every three months if they remain unemployed.

Key concerns about the new university funding model

However, since its rollout, a section of students, parents, and educators have expressed concerns about its clarity and fairness, sparking a need for further discussions and possible adjustments.

President William Ruto explained the model during a town hall meeting at the Kenyatta International Convention Centre (KICC) on August 25, 2024.

Subsequent discussions, such as the town hall at Mount Kenya University on September 5, revealed there is still lingering confusion that needs to be addressed.

Lack of public participation

A student leader at MKU, Tony Ogembo, argued that there was lack of genuine public participation in the development of the new model. He pointed out that both teachers, parents and many of the up to 10.4 million university students were not involved in the process and thus remain largely unaware of how the model works.

Household income assessment

The model relies on categorising students into income bands, but this approach has raised concerns about its accuracy and fairness. For example, some families may appear to have sufficient income but struggle financially due to multiple dependents or irregular income streams, such as farming.

READ: CS issues directive to vice-chancellors on new funding model

Exclusion of private universities

Another significant concern is the exclusion of private university students from receiving government scholarships with students arguing that private university students are also Kenyan and deserve equal support.

If this stands as it is, the students fear that other students from poorer backgrounds might be limited in their choice of universities and courses, which could affect their career prospects.

Sustainability & equity issues

The students argued that the new model could deepen societal inequalities by creating distinct classes among students based on income bands.

"We are coming up with a model which supports students in terms of bands, gender, income, composition of the family, and etc. Are we going to bring an even development in society? Are we going to give rise to societal differences in the level of social classes?" Ogembo said.

Quality of education

According to Ogembo, the previous funding model had already strained universities, with many institutions accumulating large debts due to delayed government payments.

The concern is that the new model, while redistributing funds, may not adequately address the underlying financial challenges facing these institutions, potentially impacting the quality of education.

Proposed solutions for Kenya's new university funding model

To address these concerns, various stakeholders in the MKU town hall meeting proposed the following solutions:

Enhance public participation: To bridge the understanding gap, it is crucial to involve students, parents, and educators more actively in the implementation process.
Refine income assessment: There should be a more flexible and accurate way to assess household incomes, considering factors such as family size and seasonal earnings.
Include private universities: Extending scholarships to students in private universities would ensure fairness and equality across the board.
Consolidate education funds: Combining various education funds from MCAs, MPs, governors, and other sources into a single, well-managed pool could enhance the overall support provided to students, reducing financial burdens on households.
Establish centres of excellence: Creating centres of excellence in key universities, where specific high-demand courses are offered, could improve resource allocation and education quality according to the students.