Funding Strain Deepens as Record Number of Learners Qualify for University
Kenya’s university education financing system is under growing pressure following a record surge in students qualifying for higher education, raising concerns over whether existing funding mechanisms can sustain rising enrolment.
Data from the 2025 Kenya Certificate of Secondary Education (KCSE) examinations shows that 270,715 candidates scored C+ and above, making them eligible for university admission. The figure represents a sharp increase from 246,000 qualifiers in 2024 and 201,000 in 2023, far exceeding earlier projections.
The surge comes at a time when public universities are already grappling with severe financial constraints, prompting warnings from Parliament’s Education Committee of a looming funding crisis. As of May 2025, pending bills in the public university sector stood at Sh72.2 billion, with MPs describing current Treasury allocations as “a drop in the ocean” compared to the scale of need.
Private universities are equally strained, with outstanding government payments amounting to Sh58 billion, underscoring the systemic nature of the challenge across the higher education sector.
Higher Education Loans Board (HELB) Chief Executive Officer Geoffrey Monari said the increase in qualified candidates was anticipated but cautioned that sustained growth could stretch the board’s loan portfolio unless funding expands in tandem.
“We had projected that the numbers would rise, and this has come to pass, putting more pressure on our loan portfolio,” Mr Monari said, adding that about 90 per cent of eligible students are expected to apply for loans. HELB, he said, is working closely with the National Treasury to ensure cash flows align with demand while prioritising timely disbursement.
Mr Monari noted that HELB has put mitigation measures in place, including prioritising disbursements based on university opening calendars and reinvesting recovered loans. Loan recovery, he said, remains critical to sustainability.
“Last year, we recovered Sh5.2 billion, and this year we are targeting Sh6.2 billion. The more we recover, the more students we can fund,” he said, adding that no eligible student has been left unfunded in the past three years.
Universities Fund Chief Executive Officer Dr Edwin Wanyonyi said the current cohort aligns with historical trends, noting that roughly 90 per cent of qualifying candidates typically enrol in universities. Based on projections, he said about 240,000 new students are expected to join institutions of higher learning.
“We are projecting to allocate approximately Sh11 billion to cover the scholarship component for this cohort,” Dr Wanyonyi said.
According to the Universities Fund, 577,526 students are currently receiving government support, with 320,003 funded under the Differentiated Unit Cost (DUC) model and the remainder under the Student-Centred Funding Model (SCFM). In the 2024/2025 financial year, the government disbursed Sh23.1 billion to public universities under the DUC framework and Sh564 million to private universities, alongside an additional Sh16.9 billion under the new funding model.
Dr Wanyonyi said funding for the incoming cohort will fall under the next financial year beginning in July, providing room for negotiations with the Treasury. He added that fiscal space is expected as the final cohort under the DUC model exits, freeing resources to support scholarships under the student-centred framework.
“These students will join in the next financial year, not the current one. We are already in budget discussions with the Treasury,” he said, adding that no immediate funding mismatch has been identified based on current projections.
The Universities Fund also clarified that it does not independently prioritise courses, noting that programme costs are determined by guidance from the Commission for University Education, with science, technology, engineering and mathematics (STEM) programmes receiving higher allocations due to their resource-intensive nature.
As enrolment continues to rise, the fund said discussions are underway on how universities can expand more efficiently. Proposed measures include enhancing research income, strengthening industry partnerships, adopting technology to reduce costs, and exploring cost-sharing models.
Source: Daily Nation