Emerging key issues in new university funding model

On September 16, President William Ruto appointed a 129-member committee to address problems fueling resistance to the new university funding model.

The committee, chaired by Professor Japheth Meshini Ntiba – former Principal Secretary, was tasked with reviewing the new funding model, analyzing student appeals, assessing the structure of student loans and evaluating the cost of programmes.

The appointment of the committee comes after a wave of resistance from various stakeholders, including university students, employees and parents.

The Mean Model Test Instrument (MTI), which uses family income and socioeconomic factors to classify applicants into five bands, has been criticized for misclassifying students. This has resulted in less funding being allocated to many students in need.

Under the new model introduced in May 2023, student funding at public universities is a mix of government grants, loans and family contributions. The proportion of each component varies between student teams.

During the launch, President Ruto hailed the new model as student-centric and capable of fixing the ongoing financial crisis in public universities.

The new model replaces differentiated unit costing (DUC) implemented in 2016/17. Under DUC, the Government of Kenya provided crowdfunding to public universities based on student enrollment and programs offered by the university.

The programs were grouped into 14 groups to determine costs, which were set at Sh144,000 to Sh600,000. The government was to provide 80% of the cost, while 20% would come from student payments, research and other income-generating activities.

Data from the University Funding Council reveals that since 2018/19, there has been a persistent shortfall in funding for public universities by the government. The deficit increased from 13.6% in 2019 to 30.49% in 2022/2023. This occurred despite student enrollment rising by more than 50 percent during the same period.

The funding shortfall was exacerbated by the cessation of self-funded programs following the government’s decision in 2017 to enroll all students who met the minimum university entry requirements. In contrast, in 2015, only 40% of eligible students were placed at public universities, forcing others to either apply as self-funded students or attend private institutions.

In my view, guaranteed funding is more crucial to access to higher education than the complexities of scopes. Article 26.1 of the Universal Declaration of Human Rights requires that higher education be equally available to all on the basis of merit.

Therefore, all applicants for funding should have access to 100% of the program costs, split between scholarships and/or student loans, based on level of financial need.

For example, applicants who receive a scholarship equivalent to 30 percent of the program cost must be guaranteed a loan that covers the remaining 70 percent of the program cost.

Second, funding for applicants in Group 1 (extremely needy) should be 100% scholarship funding to enhance access to education for poor families.

There is no rationale for requiring students from families who declared earning less than Sh72,000 per annum to pay family contributions, which in some cases exceed their annual income (eg for a medicine course of Sh122,400).

Furthermore, fully paid merit-based scholarships should be initiated to meet the needs of a certain number of high performers selected to join disciplines considered strategic for national development. This is to enhance merit while ensuring the development of scarce skills in key areas.

Third, family contributions from students within the same range should be equal regardless of programs. Linking household contributions to program costs places a heavy burden on low-income earners accepted to study expensive courses, depriving them of equal access to the programs of their choice.

For example, a student with a Bachelor of Medicine who is listed in Band 1, is required to pay a take-home contribution of Sh122,400 per annum. This is not only 1.7 times higher than the recognized annual household income of Sh72,000, but also 2.5 times higher than the Sh48,960 paid by a Bachelor of Arts student in Category 5 (High Income).

Fourth, program costs must be rationalized in order to enhance transparency and fair pricing. Due to high acceptance rates, many programs accept more than their capacity, enabling universities to benefit from economies of scale. This should translate into lower program costs.

While the government expects the new model to solve the financial crisis that has been ongoing for more than five years in public universities, it is unrealistic to expect it to be achieved in less than three years. For example, universities may resort to charging high tuition fees to pay off old debt, unfairly burdening current students.

Fifth, MIT was cited for misclassifying students, suggesting that the tool’s criteria do not accurately capture households’ financial capabilities.

More scientific studies can be conducted to evaluate its predictive ability. This will help identify components that need to be modified.

Overall, the Commission has an opportunity to redeem the new funding model, but success will also depend on the government’s commitment to fully and promptly transferring allocated funds to both students and universities.