Universities in crisis as State suspends new funding model

Public universities are once again on the brink of financial collapse, with operations at risk of grinding to a halt and thousands of students facing exclusion from sitting end-of-semester exams.

This follows the government’s decision to freeze funding for over 200,000 students under the new funding model after a court order in September declared the new funding model illegal.

Consequently, scholarships and loans have been frozen, leaving thousands of students without financial support and institutions struggling to stay afloat.

The case is set to be determined on December 16, meaning universities will remain without funding until then.

And now, university students under the new funding model face potential exclusion from end-of-semester exams, as institutions require fee clearance before granting access to exams.

Multiple universities have revealed students have been given an ultimatum to settle outstanding tuition fees before the tests begin in December.

Geoffrey Monari, Chief Executive Officer of the University Fund Board, explained that they were compelled to halt the disbursements to universities in compliance with the court order.

“We are complying with the court order, and as long as the order is in place, implementation of the new funding model cannot go on, that includes disbursement of the funds,” he said, reflecting a stalemate that may be difficult to resolve.

Appeals halted

A report presented to the National Assembly’s Education Committee reveals that 234,811 students admitted to universities in 2023 and 2024 are benefiting from the new funding model. The data shows that 113,075 students applied for funding in 2023, while applications rose to 121,736 in 2024.

The Standard has established that only Sh2.8 billion of the Sh13 billion in scholarships has been disbursed. This means that the government owes universities Sh10.2 billion in scholarship funding. For loans, the government has disbursed Sh5 billion out of the Sh16 billion earmarked, meaning Sh11 billion is yet to be released.

READ: Uncertainty rocks varsities as court suspends new funding model

It has also emerged that the process of appeals under the new funding model has also been halted and disgruntled students now have to stick to the bands they were allocated.

Vulnerable students are also on the line as they miss out on the upkeep loan that is meant to meet their day to day activities.

With the semester set to end by December 12, Vice Chancellors are warning that universities may not meet the operational costs, and could face difficulties paying staff salaries, posing further risks to the already fragile higher education sector.

Last Friday, Daniel Mugendi, the chairman Vice Chancellor’s Committee, said that the institutions are nearing a standstill.

“Universities rely on these funds for operations, and without them, we won’t be able to pay staff. Students are also suffering, as some have yet to receive their upkeep funds,” Mugendi told The Standard in a phone interview.

Lecturers strike

The situation is further exacerbated by the ongoing lecturers’ strike, which has led to the closure of universities over the government’s failure to honour the 2012-2025 Collective Bargaining Agreement (CBA).

Entering its eighth day on Tuesday, the strike threatens to delay the completion of the semester after negotiations between the Ministry of Education and lecturers failed to reach an agreement. With no clear timeline for resolving the dispute, the future of thousands of students relying on government funding for their education is uncertain.

The suspension of funds has also halted the appeals process, locking students into their initially allocated financial aid bands and leaving no option for those needing additional support. This is particularly concerning as upkeep loans, essential for daily living expenses, remain undisbursed, forcing students from vulnerable backgrounds to struggle with their daily needs.

As a result, university vice-chancellors are considering pressuring parents to pay fees upfront before their children can sit exams. Some students may miss out on their end-of-semester exams as institutions demand full tuition fee payment before the tests begin later this month.

Internal communications from various universities, seen by The Standard, highlight the issue, with institutions insisting that students settle outstanding fees before exams. But Prof Mugendi stated that vice chancellors agreed to allow first-year students with outstanding fees, who have filed appeals, to sit their exams once they provide evidence of their appeal.

President William Ruto in September appointed a team to review the new funding model, which has faced opposition from various stakeholders.