Higher education at crossroads amid budget cuts, new funding model

Public universities are facing uncertain times in the wake of budget cuts and a new funding model that threatens the stability of the institutions currently drowning in debt. 

Tens of thousands of lecturers in the country’s public universities are set to go on strike tomorrow unless the government meets their demands. 

The University Academic Staff Union (UASU) says the government’s failure to implement a 2021-2025 collective bargaining agreement (CBA) has given them no choice but to down their tools. 

“We have noticed that the Salaries and Remuneration Commission, SRC has been taking us around in circles during our attempts to negotiate our CBA and have given the government until September 18th to address the issue or we’ll go on strike,” said UASU National Secretary-General Constantine Wasonga last week. 

University student leaders in some of the largest public universities have similarly threatened to take to the streets at the end of this month if the government fails to address their concerns regarding the new funding model instituted last year. 

The government has defended the new funding model as "student-centered," where the financial needs of each student are taken into account in determining how much financial support they will receive. 

This is a departure from the differentiated unit cost (DUC) model, where the government was supposed to pay 80 per cent of the cost of educating each student through direct capitation to their respective university, with parents topping up the remaining 20 per cent.

Under the new funding model, students are placed under five bands, with those from families earning less than Sh6,000 per month receiving up to 95 per cent in funding and those earning more than Sh120,000 per month getting 30 per cent. 

However, both students and their lecturers have come out in opposition to the new funding model, criticising it as inaccurate in assessing the level of students’ financial need.  

“We do not know where the funding model came from,” said Mr Wasonga. “You cannot use the background of a parent to determine the future of a student.”

The financial troubles facing public universities have been made worse by deep budget cuts in the higher education sector. 

According to the latest data from the National Treasury, the State Department for Higher Education and Research received the biggest budget cuts in the 2023-24 financial year. 

The State Department had sought Sh159.6 billion to run its operations in the just concluded financial year but only received Sh94 billion, a 60 per cent reduction. 

The Vice Chancellor of Meru University Romanus Prof Odhiambo says the new funding model is necessary to address the increased number of students recorded in universities in recent years. 

“The government had promised to pay 80 per cent of the differentiated unit cost (DUC) under the old model and the students pay 20 per cent and for a long time the tuition fees have been around Sh16,000,” he explained

“Over the years, due to the increase of students coming into universities and the rise in demand, the government has not been able to give the 80 per cent and the latest was at 48 per cent,” added Prof Odhiambo.

He said placing students under the five bands is not a new practice, and the bands were relied on under the DUC to determine the amount of upkeep the government would pay students with varying needs. 

According to Prof Odhiambo, the new funding model has the potential to ease the financial pressures experienced by public universities and the results are already evident.  

“Many public universities have done their financial statements and nearly all of them have indicated the possibility that for the first time, they are declaring a surplus instead of the deficit they have declared over the last five, six years,” he said.

Emanuel Manyasa, a developmental economist and executive director of Usawa Agenda, a non-governmental initiative to promote education justice, says that the new funding model is supposed to address equity in higher education access and not financial crises in universities.

“The problems that universities are facing are because of mismanagement of the past,” he explained.

“When universities were making a lot of money from self-sponsored programmes, the government asked them to declare how much they were making so that it could factor that in the capitation funds, but the universities refused.” 

According to Mr Manyasa, the government estimated how much universities were making and cut capitation by the same percentage. 

“Now self-sponsored programmes have dried up, and there is no income coming from that stream but the government has not reversed the capitation upwards,” he explains. “This has caused the problems that universities are facing and this cannot be solved by the new funding model.”

Principal Secretary at the State Department for Higher Education and Research Dr Beatrice Muganda Inyangala has defended the new funding model as appropriate and accurate in addressing the financial needs of students.

Dr Inyangala says students are placed in bands using a means testing instrument (MTI) that combines several data sets and mathematical computations to determine the allocation of loans and scholarships with a high level of success.

“Out of 112,741 students who applied and were allocated funding last year within the five bands, 9,720 students appealed, out of which 5,087 were successful in their appeals,” she told Parliament last month. 

The PS said the accuracy of the MTI relies heavily on the information provided by students, many of whom use cybercafes, where the attendants offer wrong or incomplete information regarding the requirements.

“Out of the 125,000 students from the KCSE (Kenya Certificate of Secondary Education) 2023 cohort who applied for funding, 80 per cent of them stated that they are from single mothers and 70 per cent have declared that their families earn less than Sh6,000,” she explained. “We are dealing with problems of accuracy of data.”

Kingori Ndegwa, head of lending at the Higher Education Loans Board (Helb) says the lender has received 146,000 applications for undergraduate students in the current academic year, all of which have been processed and students banded. 

“We have progressed into payments for the first years and the majority of them have received the funds and we are now in the appeals phase where we have about 12,000 appeals,” he explained. 

“Most of the appeals are from people who had information they were supposed to provide at the point of application but never did,” he said.

“When you ask them they are clear that they either did not see the information request or were misled by the cyber cafe agent, leading to them being banded wrongly.”