Private Universities Offer Middle Ground Proposals On Funding Model

They Want Key Agen­cies Merged To Form The Nation­al Stu­dents Finan­cial Aid Cor­po­ra­tion (NSFAC), Sig­nif­i­cant Pol­i­cy And Legal Reforms

By James Wakahiu

Pri­vate uni­ver­si­ties in Kenya have pro­posed that stu­dents in both pub­lic and pri­vate uni­ver­si­ties be sup­port­ed through inclu­sive loan prod­ucts cov­er­ing tuition fees, books and upkeep.

The insti­tu­tions have also pro­posed sig­nif­i­cant pol­i­cy and legal reforms to the uni­ver­si­ty fund­ing mod­el, call­ing for the estab­lish­ment of a state agency to over­see stu­dent financ­ing.

Their umbrel­la body, the Nation­al Asso­ci­a­tion of Pri­vate Uni­ver­si­ties in Kenya (NAPUK) has advo­cat­ed for merg­ing key agen­cies involved in uni­ver­si­ty edu­ca­tion to form the Nation­al Stu­dents Finan­cial Aid Cor­po­ra­tion (NSFAC). This is in con­trast to the new uni­ver­si­ty fund­ing mod­el, which lim­its stu­dents in pri­vate uni­ver­si­ties to loans.

How­ev­er, the NAPUK idea aligns with rec­om­men­da­tions from the Pres­i­den­tial Work­ing Par­ty on Edu­ca­tion Reforms, approved by the Cab­i­net last month on Jan­u­ary 21, at State Lodge Kakamega.

This comes days after the new­ly intro­duced uni­ver­si­ty fund­ing mod­el was declared ille­gal and uncon­sti­tu­tion­al by the High Court. The High Court deci­sion has been pos­ing a fresh headache to uni­ver­si­ties to a point that it was com­pelled to revert to the old fund­ing mod­el for two cohorts of stu­dents.

The gov­ern­ment is grap­pling with the new uni­ver­si­ty fund­ing mod­el, adjust­ing the Means Test­ing Instru­ment (MTI) fol­low­ing a High Court rul­ing that annulled the mod­el in Decem­ber 2024, cit­ing dis­crim­i­na­tion con­cerns. As a result, the gov­ern­ment revert­ed to the old Dif­fer­en­ti­at­ed Unit Cost (DUC) mod­el to dis­burse funds to first- and sec­ond-year stu­dents affect­ed by the rul­ing, which also has weak­ness­es.

How­ev­er, pri­vate col­leges  says  the cri­sis affect­ing more than 250,000 uni­ver­si­ty stu­dents could be resolved via the estab­lish­ment of an inde­pen­dent body to over­see the high­er edu­ca­tion fund­ing and move away from reliance from the strain­ing Exche­quer.

In a let­ter to the Edu­ca­tion Cab­i­net Sec­re­tary Julius Migos, NAPUK chair­man Prof. Simon Gicharu who is also the Mount Kenya Uni­ver­si­ty (MKU) chair­man and founder, has rec­om­mend­ed that Uni­ver­si­ties Fund and the High­er Edu­ca­tion Loans Board be merged into a sin­gle, pro­fes­sion­alised body with the man­date to fund both study and research.

“The con­text, togeth­er with the legal chal­lenges fac­ing the new fund­ing mod­el present the min­istry with an advan­ta­geous oppor­tu­ni­ty to rethink the whole ques­tion of fund­ing of high­er edu­ca­tion. Con­cep­tu­al­ly, it is pro­posed that the mod­el should depart from a social-wel­fare ori­en­ta­tion and move towards greater sus­tain­abil­i­ty by fund­ing stu­dents through loans that would be recov­er­able in future,” he not­ed.

“The focus of the gov­ern­ment should be on pro­mot­ing access by reduc­ing the finan­cial bur­den on the stu­dents and the par­ents, while also ensur­ing that it retains the abil­i­ty to pro­vide the same kind of sup­port for the stu­dents seek­ing oppor­tu­ni­ties in the future,” Prof Gicharu says.

In the let­ter, Gicharu says the approach may be com­ple­ment­ed with a lev­el of per­for­mance- based schol­ar­ship grants, only to such a lim­it as the gov­ern­ment can afford in any giv­en finan­cial year but hinged on high­ly pri­or­i­tized gov­ern­ment pro­grams which are not nec­es­sar­i­ly mar­ket dri­ven.

Beyond this, he added that oth­er stu­dents, whether in pub­lic or pri­vate uni­ver­si­ties, can be sup­port­ed through appro­pri­ate and inclu­sive loan prod­ucts focused on tuition fees, books and upkeep. To this end, NAPUK has pro­posed the estab­lish­ment of a fund­ing body which they not­ed should be giv­en a legal capac­i­ty that sup­ports its sus­tain­abil­i­ty.

The new body, whose name they pro­posed to be the Nation­al Stu­dents Finan­cial Aid Cor­po­ra­tion (NSFAC), should be func­tion­al­ly inde­pen­dent and pro­fes­sion­al­ized. “The envi­sioned out­fit should be focus on sup­port­ing uni­ver­si­ty stu­dents and all oth­er stu­dents pur­su­ing high­er edu­ca­tion cours­es in ter­tiary insti­tu­tions,” says the NAPUK chair­man.

The idea comes from South Africa’s Nation­al Stu­dent Finan­cial Aid Scheme (NSFAS), which funds both uni­ver­si­ty and TVET stu­dents. “In South Africa, NSFAS is a gov­ern­ment enti­ty under the Depart­ment of High­er Edu­ca­tion and Train­ing, estab­lished under the NSFAS Act of 1999.” NSFAS sources fund­ing from gov­ern­ment, donors, and pri­vate con­tri­bu­tions, sup­port­ing tar­get­ed pro­grams such as the Fun­za Lusha­ka Bur­sary Pro­gramme to attract youth to teach­ing.

“In addi­tion, it should have the capac­i­ty to source fund­ing from oth­er sources beyond the exche­quer. The body should have the capac­i­ty to raise fund­ing both the local and inter­na­tion­al part­ners, and to explore rev­enue rais­ing mea­sures such as edu­ca­tion bonds and oth­er agen­cies such as unclaimed finan­cial assets as well as train­ing levy and the indus­tri­al train­ing levy,” he says.

The new asso­ci­a­tion should also adopt oth­er mea­sures includ­ing impos­ing levies on the prof­its of insti­tu­tions or indi­vid­u­als that ben­e­fit from spec­i­fied types of train­ing. “The pro­posed cor­po­ra­tion could also estab­lish an endow­ment fund and gen­er­al­ly, be able to invest with an eye to the future. More impor­tant­ly, the mech­a­nisms for recov­ery of due loans should be effec­tive and effi­cient,” Prof Gicharu says.

For effec­tive and effi­cient fund­ing and recov­ery of loans, NAPUK sug­gests the intro­duc­tion of a reli­able infor­ma­tion man­age­ment sys­tem which they stat­ed will help make depend­able pro­jec­tions for the bud­get pur­pos­es and for deter­min­ing the require­ment for each appli­cant.

“The cur­rent approach, by which a stu­den­t’s lev­el of need is deter­mined upon appli­ca­tion, may not be reli­able as it may not nec­es­sar­i­ly pro­vide an accu­rate his­tor­i­cal pro­file of the appli­cant. It also under­mines future plan­ning, as it is not easy to antic­i­pate the finan­cial require­ments,” stat­ed the asso­ci­a­tion in the let­ter.

NAPUK says the infor­ma­tion man­age­ment sys­tem should have a holis­tic his­tor­i­cal pro­file of the can­di­date, with back­ground infor­ma­tion that is sourced right from the basic edu­ca­tion lev­el as opposed to the cur­rent stu­den­t’s financ­ing appraisal sys­tem that is often acti­vat­ed when the stu­dents are admit­ted into var­i­ous insti­tu­tions.

The cor­po­ra­tion, they pro­posed should be man­dat­ed with not just dis­burs­ing grants and loans and recov­er­ing from ben­e­fi­cia­ries but also main­tain a data­base of infor­ma­tion on the ter­tiary edu­ca­tion sys­tem, includ­ing on the stu­dents and fund­ing; and fur­ther spear­head dynam­ic resource mobi­liza­tion mea­sures to aug­ment gov­ern­ment fund­ing, espe­cial­ly by spurring the involve­ment of the pri­vate sec­tor.

“Impor­tant­ly still, it will have to work with ter­tiary edu­ca­tion insti­tu­tions to prop­er­ly cost and price ter­tiary edu­ca­tion pro­grammes, to avoid pro­hib­i­tive and unjus­ti­fied costs while main­tain­ing qual­i­ty and rel­e­vance,” rec­om­mend­ed the asso­ci­a­tion.

The asso­ci­a­tion called on the gov­ern­ment in part­ner­ship with stake­hold­ers to explore the oppor­tu­ni­ties for cre­at­ing an enabling legal and pol­i­cy envi­ron­ment to facil­i­tate pri­vate sec­tor play­ers to com­pet­i­tive­ly enter the ter­tiary edu­ca­tion fund­ing mar­ket to not only pro­mote access to high­er edu­ca­tion but also ease over­bur­den­ing of the exche­quer which they said has worked in oth­er coun­tries.

Should the High Court orders declar­ing the government’s fund­ing mod­el as ille­gal remain, ques­tions linger about whether the gov­ern­ment will stick to the pre­vi­ous fund­ing mod­el.

The con­tro­ver­sial fund­ing mod­el which is Pres­i­dent William Ruto’s inven­tion sought to address finan­cial woes in uni­ver­si­ties but has since faced chaot­ic oppo­si­tion from stu­dents and some uni­ver­si­ty staff, who have been demand­ing for its dis­so­lu­tion.

The pro­pos­al comes as the gov­ern­ment refines the new uni­ver­si­ty fund­ing mod­el, adjust­ing the Means Test­ing Instru­ment (MTI) fol­low­ing a High Court rul­ing that annulled the mod­el in Decem­ber 2024, cit­ing dis­crim­i­na­tion con­cerns. As a result, the gov­ern­ment revert­ed to the old Dif­fer­en­ti­at­ed Unit Cost (DUC) mod­el to dis­burse funds to first- and sec­ond-year stu­dents affect­ed by the rul­ing, which also has weak­ness­es.

Intro­duced in 2017/2018, DUC aimed to have the gov­ern­ment finance 80 per cent of uni­ver­si­ty edu­ca­tion costs, with the remain­ing 20 per cent cov­ered by par­ents and uni­ver­si­ties. How­ev­er, this tar­get was nev­er met. Pub­lic uni­ver­si­ties received a max­i­mum of 66.4 per cent (2018/2019), while pri­vate uni­ver­si­ties peaked at just 18 per cent.

“The steady decline in DUC fund­ing sig­nif­i­cant­ly con­tributed to the finan­cial cri­sis in uni­ver­si­ties, prompt­ing the intro­duc­tion of the New Fund­ing Mod­el,” NAPUK says.

Prof Gicharu empha­sis­es that their pro­pos­al moves away from a social wel­fare approach toward a more sus­tain­able sys­tem, where stu­dents are fund­ed through recov­er­able loans. “This aligns with the government’s legal man­date in ter­tiary edu­ca­tion,” he not­ed.

To ensure sus­tain­abil­i­ty, NAPUK pro­pos­es per­for­mance-based schol­ar­ships, lim­it­ed to the government’s finan­cial capac­i­ty with­in a giv­en fis­cal year and aligned with nation­al­ly pri­ori­tised pro­grammes.

“Stu­dents in both pub­lic and pri­vate uni­ver­si­ties should be sup­port­ed through inclu­sive loan prod­ucts cov­er­ing tuition fees, books, and upkeep,” he added.