
Impact of Ruto’s New Funding Formula on Universities and Student Loans in Kenya
Kenyan public universities may lose funding following the new funding formula that aims to help poor families while providing adequate support to all students.
The traditional giants that always got automatic huge financial allocations from the government and received the most significant number of students will now compete with other institutions, including private universities.
The new funding regime will create competitiveness, and smaller institutions could attract more students, which could impact their growth. Parents will have to select universities based on available learning facilities such as libraries, laboratories, other resources, and compare costs of academic programmes before making a choice.
Previously, parents had little choice after the Kenya Universities and Colleges Central Placement Service completed its placement exercise.
Under the new plan, a government-sponsored student at the University of Nairobi received the highest aid of about Ksh. 242,000 annually, while a student enrolled at Machakos University College got Ksh. 67,000, which was the lowest funding.
The government recently announced drastic changes in university funding by putting an end to the annual government sponsorship awarded to top KCSE performers.
Students will be categorized into four levels of need, including vulnerable, extremely needy, needy, and less needy. Under the Means Testing Instrument (MTI), local administration and religious leaders will help identify poor families.
The funding to students shall combine scholarships, loans, and household contributions on a graduated scale scientifically determined by MTI.
President William Ruto stated that students from needy households joining universities will receive government scholarships of up to a maximum of 53 per cent and loans of up to 40 per cent.
Those joining Technical and Vocational Education and Training (TVET) institutions will receive government scholarships of up to a maximum of 50 per cent and loans of up to 30 per cent.
Less needy students joining university are to be funded through a government scholarship of up to a maximum of 38 per cent of the cost of the programme and 55 per cent in loans.
For those joining TVET institutions, they will receive 32 per cent of government scholarship, 48 per cent for loans, and their households will pay 20 per cent of the costs.
The new arrangement could see a decline in the number of students in some public universities. More students from high-income households may opt for private universities because the facilities in public universities are not up to the required standards.
The changes could also result in more students dependent on student loans that are payable when they join the job market. Public universities that attract more students will have a higher chance of reviving the parallel program that has been struggling.
Private universities that received government funding will no longer get capitation, and they will also have to compete for the same students. Students who choose to enroll in private universities will have access to government loans.
“More and more students from high income households will opt for private universities because the facilities in the public universities are not to the required standards,” Wasonga said.
The new plan places all public institutions on a level playing field where competitiveness will be key. Private universities and public institutions will strive to attract students, which will result in quality education.
The government will fully fund the vulnerable and extremely needy students who make up 29 per cent of the students joining universities and TVET institutions this year.
The funding shall be through government scholarships, loans, and bursaries. The plan is to integrate all existing funding schemes under a single authority and provide one set of eligibility criteria applied across the board.
In conclusion, the new funding formula will create competition in the university sector, and it may impact the growth of traditional giants that always received a large number of students and automatic huge financial allocations from the government.
Parents will have to select universities based on available learning facilities, costs of academic programmes, accommodation charges, and available alternatives for their children before making a choice.
The government will fully fund the vulnerable and extremely needy students who comprise 29 per cent of the students joining universities and TVET institutions this year.
Impact of Ruto’s New Funding Formula on Universities and Student Loans in Kenya