Auditor General report exposes flaws in university funding model

Auditor General Nancy Gathungu has exposed the ineffectiveness of the new university funding, highlighting various flaws in the model.

The Higher Education Loans Board’s model emphasises allocating resources based on financial need, addressing challenges such as affordability, inclusivity, and institutional sustainability. 

However, an audit report for the year ended June 2024 found that many of its aspects are not working.

The model shifts towards a student-centred funding approach and aims to make education more equitable, accessible and sustainable.

Means Testing Instrument (MTI) used for assessing the financial capacity of the students categorises them into five financial bands, 1 to 5. The instrument ensures targeted support through scholarships, loans and household contributions.

“However, a review of documents and interviews with the Fund Management revealed critical challenges the model is facing,” the report said.

Among the challenges are inaccurate data submission by applicants, leading to distorted MTI scores; limited public awareness, leading to information gaps to the intended beneficiaries; and delays in funds disbursement in the form of loans and scholarships, disrupting students’ ability to pay tuition fees, access accommodation and cover living expenses.

Additionally, the Auditor General flagged inclusivity concerns, whereby vulnerable groups, such as students with disabilities or those from marginalised regions, face difficulties accessing the funds they need.

There are also emerging concerns on unique challenges, such as those faced by Muslim students, who require sharia-compliant financial products, further hindering inclusivity.

“Loan repayment burden due to high unemployment and underemployment rates make it challenging for graduates to repay their loans, increasing default rates and threatening the sustainability of the revolving fund,” it said.

Another challenge highlighted is lack of coordination between the other government agencies dealing with the higher education students support, namely the Board and the State Department for Technical and Vocational Education and Training.

The model was also found to lack integration with the Kenya Universities Central Placement Service system to ensure seamless tracking of students from placements in the universities to funding.

“In the circumstances, the effectiveness of the new funding model for higher education in supporting students funding requirements could not be confirmed,” Gathungu said.

On December 20 last year, the High Court declared the fund unconstitutional for being discriminatory, finding that it violated students’ right to education.

The ruling also clarified the government's responsibility in funding public universities and passing the responsibility to parents was a violation of the Constitution as the legitimate expectation of the citizens was violated.

The ruling was, however, overturned by the Court of Appeal in March, clearing the way for its implementation.

In September last year, President William Ruto announced the establishment of the National Working Committee on the Review of the New University Education Funding Model to address the challenges.

The committee comprised sub-committees: one to handle the review and refinement of the funding model for universities and technical, vocational education and training institutions (TVETs), and another to deal with appeals arising from the categorisation of students into various eligibility bands.

The committee proposed changes to the contested funding model, including uniform allocation of funds, reduction on cost of academic programmes by 23 per cent and for parents to be represented in university councils.