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 proposed significant policy and legal reforms to the university funding model, and called for the establishment of a state agency to oversee student financing.
Their umbrella body, the National Association of Private Universities in Kenya (NAPUK) advocated for the merger 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.
NAPUK’s idea aligns with recommendations from the Presidential Working Party on Education Reforms, approved by the Cabinet on January 21, 2025, at State Lodge Kakamega.
This comes days after the newly introduced university funding model was declared illegal and unconstitutional by the High Court.
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 said 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 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 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 said.
Prof. Gicharu said 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 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,” said the NAPUK chairman.
“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 said.
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 said 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 furtherspearhead 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.
Prof Gicharu emphasized 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 proposed 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.
