Private universities have suggested important policy and legal changes to the university funding model, advocating for the creation of a state agency to manage student financing.
The institutions promote the consolidation of essential agencies engaged in university education to create the National Students Financial Aid Corporation (NSFAC) through their umbrella organization, the National Association of Private Universities in Kenya (NAPUK).
NAPUK suggests that students from both public and private universities should be backed by inclusive loan products that cover tuition, books, and living expenses.
This contrasts with the new university funding model, which restricts students in private universities to loans, while those in public institutions benefit from both loans and scholarships
.NAPUK suggests that the universities fund and the Higher Education Loans Board (HELB) should be merged into one professional entity tasked with funding both study and research.
This is in accordance with the suggestions made by the Presidential Working Party on Education Reforms, which were sanctioned by the Cabinet on January 21, 2025, at State Lodge Kakamega.
NAPUK declared in its proposal to Education Cabinet Secretary Julius Ogamba, “The funding body should have the legal capacity to ensure sustainability.”
The proposal arises as the government fine-tunes the new university funding model, making adjustments to the Means Testing Instrument (MTI) after a High Court ruling in December 2024 that annulled the model due to discrimination concerns.
The government therefore returned to the model of Differentiated Unit Cost (DUC) for allocating funds to first- and second-year students impacted by the ruling.
Nonetheless, DUC encountered difficulties as well.
DUC, which was launched in 2017/2018, had the goal of having the government cover 80% of the costs associated with university education, while parents and universities would be responsible for the remaining 20%.
This target was never achieved, however. Public universities reached a maximum of 66.4% (2018/2019), whereas private universities only reached 18%.
NAPUK stated in a letter signed by Mount Kenya University founder Simon Gicharu, “The gradual reduction of DUC funding was a significant factor in the financial crisis affecting universities, which led to the implementation of the New Funding Model.”
Gicharu stressed that their proposal shifts from a social welfare model to a more sustainable system, funding students through recoverable loans.
He pointed out that this is in accordance with the government’s legal mandate regarding tertiary education.
NAPUK recommends performance-based scholarships to ensure sustainability. These scholarships will be limited to the government’s financial capacity for a given fiscal year and will be in line with national priority programmes.
He added, “Students in public and private universities alike should receive support through inclusive loan products that cover tuition fees, books, and living expenses.”
NAPUK is calling for the creation of a new legal framework to establish NSFAC as an independent and professional funding organization to assist students in public and private universities, as well as TVET institutions, in order to tackle the funding crisis.
NSFAC will seek funding beyond government allocations by leveraging education bonds, unclaimed financial assets, and training levies from employers in sectors such as hotel and catering and industrial training.
The proposal will also require NSFAC to create an endowment fund aimed at ensuring long-term sustainability.
NAPUK stressed, “The mechanisms for recovering loans must be effective and efficient.”
Private universities suggest establishing a strong information management system to enhance repayment. This system would facilitate precise budget forecasts and loan distributions, as well as evaluations of students’ financial requirements beyond their admission applications.
Additionally, it will monitor students’ financial backgrounds from basic education onward.
Private universities stated, “The government could utilize national administration officers and education ministry officials to improve this system.”
Private universities suggest that NSFAC be modeled on South Africa’s National Student Financial Aid Scheme (NSFAS), which provides funding for both university and TVET students.
“NSFAS, a government body under the Department of Higher Education and Training in South Africa, was created by the NSFAS Act of 1999.”
NSFAS obtains its funding from government sources, donors, and private contributions. It supports targeted initiatives like the Funza Lushaka Bursary Programme to draw young people into the teaching profession.
Additionally, there are the Agriculture and Rural Development Bursaries that provide support for agriculture, fisheries, and forestry.
In South Africa, loan allocations are divided into 70 per cent for STEM programs and 30 per cent for humanities/social sciences.
NAPUK argued, “Our proposal is that funding should also be aligned with government programs that are highly prioritized.”
Private universities emphasized that the legal challenges related to the New Funding Model offer the Ministry of Education a chance to reconsider how universities are financed.
“Loan repayment by students should be income-based, guaranteeing a recovery process that is equitable and adjustable to the financial circumstances of beneficiaries.”
The objective of this proposal is to create a sustainable and fair funding system for higher education that serves the interests of both institutions and students.
