Education Cabinet Secretary Julius Ogamba outlined several reforms designed to enhance the financial sustainability of universities and improve staff welfare.
He emphasised the government's commitment to implementing Collective Bargaining Agreements and increasing staff salaries to prevent future disruptions.
“The university sub-sector has faced various challenges in recent times, largely due to financial difficulties,” the CS told the Senate plenary.
A key pillar of the government’s strategy is the introduction of the student-centred university funding model, which replaces the previous differentiated unit cost model that many institutions had criticised for chronic underfunding.
President William Ruto launched the new model, dubbed the Variable Scholarship and Loan Funding, in May 2023.
Implemented through a collaboration involving the Universities Fund, Higher Education Loans Board, and Kenya Universities and Colleges Central Placement Service, the new model tailors financial assistance based on individual student needs.
It combines scholarships, loans and household contributions determined using a Means Testing Instrument that assesses household income.
Students are classified into different financial bands—such as vulnerable, needy, and less needy—based on their ability to pay.
However, the model has faced criticism, with some students from low-income backgrounds claiming they were wrongly placed in higher-paying bands, requiring their families to pay unaffordable fees.
CS Ogamba also revealed that the government is encouraging universities to develop alternative revenue streams to reduce over-reliance on the national budget.
Legal reforms are underway to improve governance in public universities, with the aim of ensuring efficiency, transparency and accountability in resource management.
“The ongoing law reform process is geared towards strengthening governance frameworks in our public universities to ensure prudent use of resources,” Ogamba said.
According to the latest national government expenditure report by Controller of Budget Margaret Nyakang’o (for the six months ending December 31, 2024), public universities and national polytechnics have accumulated Sh67.81 billion in debt.
Notably, the University of Nairobi, Kenyatta University and Jomo Kenyatta University of Agriculture and Technology carry the highest debt burdens.
Kenyatta University alone owes Sh12.38 billion, primarily to statutory bodies like NSSF, KRA and pension funds. The University of Nairobi follows closely with Sh12.22 billion in unpaid bills.
“Pending bills include contractor payments, supplier invoices, unremitted statutory deductions and pension arrears,” the report notes.
To curb industrial strikes, the government is implementing the 2017–2021 CBA, with a commitment to release Sh9.7 billion to finance salary increases of between seven and 10 per cent for academic and non-academic staff.
Ogamba said moving forward, the government plans to initiate CBA negotiations at the beginning of each cycle to allow for better planning and budgeting.
“Since CBA implementation is resource-intensive, we are also creating a legal and policy framework to ensure our public universities are financially sustainable,” he added.
INSTANT ANALYSIS
The new university funding model prioritises a student’s financial need and separates placement from funding. Under the model, universities and Tvet institutions will no longer receive block funding in the form of capitation. Instead, funding for students will be provided through scholarships, loans and household contributions.
