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Universities Fund calls for sustainable way of funding varsities as govt changes tune

Universities Fund calls for sustainable way of funding varsities as govt changes tune

Ezekiel Machogu, the Education Cabinet Secretary, has told colleges, universities, and other higher education institutions to find new ways to raise money.

Friday, November 4th, Machogu announced that the government could not continue to fund operations in higher education institutions.

Thus, the Education CS requested institutions explore new revenue-generating initiatives.

“I will move around every university in Kenya because most of our universities face problems, particularly finance.

“You get them complaining about underfunding, and we are encouraging that they must generate their own revenue because the exchequer as it is now, is not going to be able to continue funding more because, in Kenya, education takes 25.9 per cent,” Machogu stated.

Following the directive, parents may be required to spend more money on their children’s higher education.

CEO of Universities Fund Geoffrey Monari says universities and colleges’ Central Placement Service (KUCCPS) must place students with grades above C+ in institutions of higher education in accordance with the transition policy.

Over 80 percent of programs and units for government-sponsored students are funded by the government.

This was per the 100% transition policy set in 2018. The directive substantially expanded enrollment at educational institutions.

But most institutions, especially the University of Nairobi and Egerton University, have had trouble getting enough money or getting it on time.


Public and private colleges owed a combined sum of Ksh56 billion as of June 2022. This prompted other colleges to increase tuition and pass on more costs to parents.

The most recent rule from the government says that students should use Higher Study Loans Board (HELB) loans to pay for their education.

President William Ruto’s decision to establish a Presidential Working Group on Educational Reform in the country is clearly well-considered.

The current precarious state of university funding, which jeopardizes the efficacy of teaching and research, must be one of the team’s primary focuses.

As of June of this year, public and private institutions owed academics and parastatals like the Kenya Revenue Authority (KRA) and the National Social Security Fund (NSSF) a total of Sh56 billion.

The issue will worsen if prompt and well-considered answers are not developed. Universities are mired in a rut due partly to their shortcomings and external factors.

Since the national government started the 100% transition program in 2018, there has been a big jump in the number of college graduates.

Unfortunately, the acceptance rate has not been proportional to the amount of financing.

All students who receive a grade of C+ or higher are eligible to be put in universities by the Kenya Universities and Colleges Central Placement Service, according to the transition policy (KUCCPS).

The Universities Fund is required by law, among other things, to allocate cash to public universities. 

“The Fund thus developed a criterion for the allocation of funds and the issuing of conditional grants.” Says Monari.

According to the Differentiated Unit Cost (DUC), the government is expected to finance 80% of the unit cost of government-sponsored student programs.

However, this has not been the case because the Exchequer has disbursed insufficient monies.

Based on data from the 2018-2019 fiscal year, the DUC allocation began at 66 percent and will decrease to 48 percent by the 2022-2023 fiscal year.

Currently, a measly Sh47 billion has been set out to support the 434,631 students at public and private universities, compared to the recommended Sh87 billion. This results in a shortfall of Sh39 billion.

Inadequate finance has been the curse steadily destroying higher education’s benefits. Nonetheless, we must investigate viable strategies for rescuing institutions.

As the Universities Fund, we advocate for effective and prompt financial measures.

“To start with, we must target national priority areas envisioned in Kenya’s development blueprint Vision 2030.”

 Universities will thereafter be able to become centers of excellence. Consequently, they will be able to acquire money from industries operating in the region of interest.

Moreover, focusing on essential programs like agriculture will increase job development and make graduates employable.

“Secondly, we should get it right on data. Data is important in informing the allocations to students. We are working on acquiring a data centre that will be linked to KUCCPS to enable us map universities, get accurate information on student transition rates and the programmes they are pursing.”

For the future to be bright, universities must rigorously examine funding grant equity so that only the most deserving students receive money. There are ongoing discussions to make the model operational by next year.

“For the future to be bright, universities must critically look into equality in funding grants so that only the neediest students get funding. Discussions are underway to have the model operational by next year.”

The strategy will help improve the financial health of universities by requiring students to pay fees directly to their respective institutions.

This is preferable to increasing fees, which is unsustainable given the current economic climate.

Additionally, universities must collaborate with industries to receive the necessary assistance.

This synergy should be established so that the resulting cash can be routed to colleges, bolstering their finances.

The Fund has begun resource mobilization efforts to find other funding sources for university financing.

This is vital because it assists institutions in reducing their reliance on the Exchequer by supplementing their income.

We are reaching out to funders sponsoring sector-specific programs, such as mining and agriculture.

We must solve the funding issues plaguing our universities to restore them as hubs of innovation and excellence.

Universities Fund calls for sustainable way of funding varsities as govt changes tune

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